A decades-old dream is on the verge of coming true. Autonomous vehicles (AVs) will hit the road as early as 2017, when several original equipment manufacturers (OEMs) and technology companies plan to launch pilot projects or roll out commercial vehicles with varying levels of self-driving capability. Mass adoption of self-driving technology will deliver tremendous economic benefits. But it will also disrupt business as usual for a wide variety of companies, including OEMs, mobility providers, and component makers. The coming AV era raises urgent questions for executives of these companies: What is the cost of these technologies and what are consumers willing to pay for them? How fast will mass markets adopt AVs and how might car sharing and societal shifts impact these introductions? What technological challenges must be overcome to enable fully autonomous driving? Where should OEMs and new entrants focus their R&D investments? And how should players in the AV market address consumer concerns around safety, lack of control, and the risks of faulty technology?

1. Back to the Future:
The Road to Autonomous Driving
Selected highlights for SlideShare
Excerpted from a press briefing in Detroit to preview an upcoming report
January 8, 2015

2. 1
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
BCG study focused on likely market development based on
technology options, cost dynamics, and consumer demand
Development of autonomous vehicles is receiving increased attention
• Major focus on technology development by OEMs, suppliers, tech companies, and academic
institutions
• Regulators in several countries are exploring approaches to address liability, certification, and
regulatory issues surrounding AVs
BCG's research focuses on the underlying economics and expected market adoption
• Required technologies, availability, and cost evolution
• Consumer demand in different use cases and willingness to pay
• Adoption rates on new technologies in automotive
Possible scenarios and their implications for key stakeholders
• Forecast penetration levels through 2035 under different adoption scenarios
• Deep dive on the impact of AVs on existing mobility modes
• Implications for modes of transportation and other stakeholders
Source: BCG

3. 2
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Our key findings and beliefs on autonomous driving (I/II)
Source: BCG analysis
I
The
autonomous
vehicle (AV)
is becoming
a reality
The road to autonomous vehicles starts now, with the first partially
autonomous vehicles coming on the market this year or next
II
Consumer demand is very high with 55% of U.S. drivers likely to consider
buying a partially autonomous vehicle and 44% a fully autonomous one
III
…and up to 20% are willing to pay an extra $5,000 or more for autonomous
driving features
IV
Similar levels of high interest for self-driving on highway, self-driving in traffic,
self-driving along a single route (commuting) and autonomous valet parking
V
Lower insurance and fuel costs, along with increased safety, are the main
reasons for purchasing

4. 3
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Our key findings and beliefs on autonomous driving (II/II)
Source: BCG analysis
VI
Our view,
with select
adoption
scenarios
Price to consumers is likely to start at or above $4,000 for one feature,
suggesting a gradual adoption, initially in the premium segment
VII
Based on market economics, we expect a 12-13% global penetration of
autonomous features by 2025, representing around a $42bn market for these
features
VIII
The first fully autonomous vehicles should hit the road in 2025 at an
increased sticker price of around $10,000
IX
Penetration of partially and fully autonomous cars should plateau around 25%
of the market, unless strongly supported by regulation
X
What it
means for
the industry
With full autonomy, shared cars in mega cities (like New York and Paris) will
be more economical than car ownership and will reduce traffic dramatically
XI
OEMs will have to carefully segment the market and adapt to new trade-offs
consumers will make between autonomy and other vehicle features

5. 4
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Note: n=1,510
Source: BCG U.S. self-driving cars survey, 2014
Customer willingness to buy autonomous cars is strong in
the U.S.
164159
354
451
382
0
100
200
300
400
500
# of respondents
Very
unlikely
UnlikelyNeutralLikelyVery likely
55% of respondents
306
221
318323
342
0
100
200
300
400
# of respondents
Very
unlikely
NeutralLikelyVery likely Unlikely
44% of respondents
Q: When you think about purchasing a vehicle in the
future (up to ~5 years from now), how likely are you to
consider purchasing a partially self-driving car?
Q: When you think about purchasing a vehicle in the
future (up to ~10 years from now), how likely are you to
consider purchasing a fully self-driving car?
55% say they would buy a partially
autonomous car
44% say they would buy a fully
autonomous car

6. 5
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Lower insurance, increased safety, and highway driving cited
as top 3 reasons to buy partial AVs in the next ~5 years
113
116
152
174
221
234
238
262
268
293
320
326
331
335
372
396
418
0 50 100 150 200 250 300 350 400 450
# of respondents
Can drop off my kids without me
Allows me to carpool more often
Allows me to save money through car sharing
Can drive around elderly people
Lower/more predictable maintenance costs than non-AVs
Novelty of driving in a SDC
Drops me off, finds a parking spot, and parks on its own
Helps environment by driving a car that has low emissions
Drives on dedicated lanes to SDCs where traffic is fluid
Is safer than non-SDCs
Lower insurance costs than non-SDCs
Allows multi-tasking/ productivity while vehicle drives
Switches to self-driving mode during traffic
Tax breaks are provided for purchasing a SDC
Has highest safety ratings from government agencies
Offers better MPG than non-SDCs
Switches to self-driving mode on freeways
Q: Which of the following are reasons why you
said you are [very likely/likely/neutral] to purchase
a partially self-driving car?
Note: n=1,187
Source: BCG U.S. self-driving cars survey, 2014

7. 6
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Q: Which of the following are reasons why you
said you are [very likely/likely/neutral] to purchase
a fully self-driving car?
Similarly, increased safety, lower insurance, and higher
productivity are top reasons to buy full AVs in the next ~10 yrs
103
113
131
164
204
212
214
237
251
271
273
274
275
281
292
323
337
0 50 100 150 200 250 300 350
Can drop off my kids without me
Allows me to carpool more often
Allows me to save money through car sharing
Can drive around elderly people
Lower/more predictable maintenance costs than non-AVs
Helps environment by driving a car that has low emissions
Novelty of driving in a SDC
Drops me off, finds a parking spot, and parks on its own
Drives on dedicated lanes to SDCs where traffic is fluid
Tax breaks are provided for purchasing a SDC
Offers better MPG than non-SDCs
Switches to self-driving mode during traffic
Switches to self-driving mode on freeways
Has highest safety ratings from government agencies
Allows multi-tasking/productivity while vehicle drives
Lower insurance costs than non-SDCs
Is safer than non-SDCs
# of respondents
Note: n=983
Source: BCG U.S. self-driving cars survey, 2014

8. 7
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Many customers are willing to pay over $5K for AV features
1. Represents responses to the question "The next time you plan to purchase a new vehicle, how likely would you be to consider buying the vehicle described?" with answers of "Very likely, likely,
neutral, unlikely, very unlikely."
Note: n=1,510
Source: BCG U.S. self-driving cars survey, 2014
6040200
Yes
53
50
51
54
57
0 20 40 60 80
Very
interested
Somewhat
interested
Searches for
parking spot
and self-parks
67
Drives itself in
heavy traffic
64
Drives itself on
a specific route
66
Drives itself
on highway
67
Consider buying
all features1 51
37
47 9 8
52
48
29
15
16
17
15
13
7
6
9
9
2
6
8
7
11
13
16
17
19
26
30
50 1000
% of respondents
2
2
3
Over $5K$3-$4K
$4-$5K$2-$3K
$1-$2K
$1K or less
Consumers undecided about
preferred autonomous feature
~50% willing to pay for these
features...
...and many above
the $5K price point

9. 8
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Hardware: Some sensor costs are on the critical path
GPS (global positioning system)
combined with readings from tachometers,
altimeters and gyroscopes to provide the most
accurate positioning
Cost: $80-$6,000
Lidar (light detection and ranging)
monitor the vehicle's surroundings (road, vehicles,
pedestrians, etc.)
Cost: $90-8,000
Central computer analyzes all sensor input,
applies rules of the road and operates the steering,
accelerator and brakes
Cost: ~50-200% of sensor costs
Ultrasonic sensors to
measure the position of objects very
close to the vehicle
Cost: $15-$20
Radar sensors monitor the
vehicle's surroundings (road, vehicles,
pedestrians, etc.)
Cost (Long Range): $125-$150
Cost (Short Range): $50-$100
Odometry sensors to
complement and improve GPS
information
Cost: $80-$120
Video cameras monitor the vehicle's
surroundings (road, vehicles, pedestrians,
etc.) and read traffic lights
Cost (Mono): $125-$150
Cost (Stereo): $150-$200
Source: Expert interviews; company information; BCG analysis
xx – 2014 costs
xx – Expected cost in next ~3 years (cost estimates are highly variable
as different technical specifications are used in different applications)

10. 9
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
OEM costs are expected to decline at 9% for fully AVs and 4-
10% for partial AVs over the first 10 years on the market
10
5
0
Introductory OEM pricing ($k/vehicle)
Fully
autonomous
6.5
3.3
Urban autopilot
3.7
1.8
Highway
autopilot with
lane changing
3.8
1.9
~$2.0K
Autonomous
valet parking
~$5.7K
1.3
0.7
~$3.4K
Traffic jam
autopilot
~$10K
2.2
1.1
Single lane
highway autopilot
~$5.5K
2.5
1.3
~$3.8K
OEM total cost
Markup
Expected year of
introduction
2016 2017 2017 2018 2022 2025
Cost at end of 10 yrs
after introduction ($k)
~1.6 ~1.3 ~0.5 ~1.8 ~2.3 ~2.7
Global cumulative
volume in 10 yrs,
including year of
introduction (M)
~9 ~11 ~12 ~32 ~62 ~38
OEM total cost
CAGR% decrease
-4% -6% -10% -7% -5% -9%
Note: Costs shown in figure are estimated costs to OEMs at time of launch of feature. A typical OEM is assumed to have a 10% market share. Total R&D costs are amortized over total OEM
volumes for each system in the first 5 years. Source: BCG analysis
Partial AV features Fully AV

11. 10
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
AVs have the potential to reach ~25% market penetration
100% = ~10M1 addressable global
market for a typical OEM in 2018
1. Forecasted market for new car sales in 2018 = 100M, in 2025 = 110M. Market share of a typical OEM = 10% 2. Data based on BCG U.S. self-driving cars survey, 2014 3. Total R&D costs are
amortized over total OEM volumes for feature in the first 5 years 4. Illustrative example for partial autonomous systems shown using highway autopilot with lane changing, with expected launch in
2018. Skimming pricing strategy of ~1.5% year-on-year assumed for analysis.
Source: BCG U.S. self-driving cars survey, 2014; BCG analysis; IHS
0 10 20 30 40 50 60
8
6
4
2
0
$K/car for highway autopilot with lane changing
New car sales penetration (%)
OEM component + R&D costs3
OEM component costs
Consumer willingness to pay2
Market penetration peaks
around ~26%
R&D cost per
unit3 = $146
0 10 20 30 40 50 60
8
6
0
4
2
$K/car for fully autonomous
New car sales penetration (%)
Market penetration peaks
around ~27%
Lower hardware costs for partial AVs4
allow faster adoption at introduction
Higher hardware costs for full AVs
slow down adoption in first few years
R&D cost per
unit3 = $457

12. 11
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
By 2035, 12 million full AV units could be sold a year globally
Market for partial and full AV features expected to grow from ~$42B in 2025 to ~$77B in 2035
Represents 12M full AVs and ~18M partial;
~$77B market for AV features in 2035
1. Based on adoption rate of Adaptive Cruise Control ADAS feature and Cruise Control following introduction of first feature within any category (ACC and Auto Parallel Park for ADAS in 2006, Single
Lane Highway Autopilot for partial AV in 2016, and full AV introduction in 2025; AV categories reach 25% market cap per cost and consumer willingness economics; 2. Based on IHS forecasts
through 2026; 2027 through 2030 based on 2017-2026 CAGR and then steady volume from 2031-2035 3. Sales market size estimated as cost per unit of feature X volume of feature sold in year X
markup for that year. Markup for a feature in a given year is estimated by linear interpolation from 50% in year of introduction to 0% in year 17 after introduction.
Source: just-auto Jul-2014 market analysis, LMC Automotive, IHS Global Standards, BCG analysis
2035 global sales
Share
(%)
Volume
(M)
Sales3
($B)
15.0% 18.4 38
9.8% 12.0 39
Estimated global new light
vehicle sales: ~122M2
Estimated global new light
vehicle sales: ~111M2
2025 global sales
Share
(%)
Volume
(M)
Sales3
($B)
12.4% 13.9 36
0.5% 0.6 6
Total $42bn $77bn
0
10
20
30
40
50
203520252015
Penetration of new vehicle sales (%)
In 2035, 25% of market to be AV sales with
15% partial and 10% full AV systems
Fully AVPartial AV
2025 penetration
• Partial AVs: 12.4%
• Fully AVs: 0.5%
2035 penetration
• Partial AVs: 15.0%
• Fully AVs: 9.8%

13. 12
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Authors of the study
Upcoming BCG report will be available on bcgperspectives.com in Q1 of 2015
Thomas Dauner
Global Leader of BCG's
Automotive practice
and a Stuttgart-based
Senior Partner
BCG Stuttgart
+49 170 334 7414
dauner.thomas@bcg.com
Xavier Mosquet
North America Leader
of BCG's Automotive
practice and Managing
Director of the Detroit office
BCG Detroit
+1 248 688 3450
mosquet.xavier@bcg.com