Countdown to the AI Driving Era! Morgan Stanley: Autonomous Driving Market to Hit $200B by 2030, L2+ Sales Surge 325%
Morgan Stanley (MS-US) recently conducted a comprehensive analysis of the autonomous driving market, projecting that global sales of L2+ vehicles will reach 26 million units by 2030, accounting for 28% of new passenger car sales worldwide—equivalent to the total light vehicle sales in the U.S. and Europe today. In 2023, L2+ vehicles represented about 8% of sales, rising to an estimated 11% by 2025.
The firm stated that the autonomous driving software and hardware market will grow to $200 billion by 2030 and $300–400 billion by 2035, with 70% of revenue coming from hardware. Based on these estimates, autonomous driving could contribute over $7.8 billion in global tax revenue by 2030 and more than $15.6 billion by 2035.
Morgan Stanley identified three key factors influencing adoption:
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Breakthroughs in generative AI and large language models.
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Competitive dynamics among major economies—China’s vast user base and cost-efficient supply chain, Silicon Valley’s dominance in AI computing and data, and the technological branding of Japan, South Korea, and Germany. The speed of tech diffusion will impact cost reduction.
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Industry standards and regulatory hurdles, a recurring challenge for emerging technologies.
Autonomous driving will extend beyond cars, reshaping transportation systems and accelerating advancements in humanoid robots, eVTOLs (electric vertical takeoff and landing aircraft), and new business opportunities, making it the auto industry’s most significant innovation in the next 5–10 years.
Though Xiaomi’s autonomous driving efforts are still catching up, progress is rapid. Since launching its first car in March 2023, the company has expanded its Highway and Urban NOA (Navigate on Autopilot) technologies, deploying 10 million clips of assisted driving data.
Founder Lei Jun prioritized autonomous driving early, acquiring Deepmotion in 2021 when Xiaomi entered the auto sector. Sales have fueled R&D, driving consistent revenue growth.
Morgan Stanley also highlighted key players in the autonomous driving supply chain, including Desay SV (partnered with NVIDIA on domain controllers) and Bethel (China’s top brake-by-wire supplier with mass-production expertise). The automotive supply chain is now expanding into robotics and beyond.
