Connected vehicles on road to $742 billion market by 2030

Bloomberg Intelligence

August 15, 2024

This analysis is by Bloomberg Intelligence Lead Analyst Steve Man. It appeared first on the Bloomberg Terminal.

Smart vehicles represent a $742 billion annual revenue opportunity for the global automotive value chain by 2030, offering significant recurring-revenue prospects for car manufacturers such as Volkswagen, Ford and Mercedes-Benz, and suppliers including Continental, Denso and Aptiv. The integration of open-source operating systems, such as Linux, empowers OEMs to create proprietary software stacks and reclaim the vehicle-to-human interface from Apple’s CarPlay and Android Auto. Achieving hands-off Level 4 and 5 autonomy may be years away, yet recent advancements in generative AI and chip technology, spearheaded by Tesla, OpenAI and Nvidia, are accelerating the transition to Level 3 from Level 2. Smart vehicles are powertrain-agnostic, presenting a larger and more dynamic profit opportunity than electric vehicles (EVs) alone.

Discover more with Bloomberg newsletters

Subscribe now

Key research takeaways

  • Tesla’s Lead Over Legacy Carmakers: Tesla’s Full-Self Driving (FSD) technology could be closer to reaching full autonomy than any other peer, according to BI. Legacy original equipment manufacturers (OEMs) such as VW, GM and Ford are investing heavily, but no other global carmaker offers full self-driving capabilities on city roads.
  • Transforming the Business Model: Advanced driver-assistance system (ADAS) and software subscriptions could boost revenue through over-the-air operations. A pool of about $617 billion in annual revenue is accessible to carmakers such as Tesla, which has proved the viability of the subscription model by following phonemakers’ blueprint.
  • Redefining Training With Generative AI: Gen-AI models, underpinned by more powerful chips from providers such as Nvidia and Qualcomm, could offer significant improvements in the efficiency of neural network training.
  • Collaborative Supply Chain: The autonomous-vehicle ecosystem can be broadly segmented into three categories: perception (see), computation (think) and actuation (act). Collaboration across a network of suppliers, instead of linear sourcing from tiered vendors, could be the cornerstone for breakthroughs in self-driving vehicles.
  • Equity Portfolios Can Hedge Smart-Car Risks: Diversifying investments across critical suppliers could balance concentration risks. A portfolio that includes companies such as Applied Intuition, Helm.ai and Momenta mirrors Tesla’s core autonomous capabilities.


Already a customer? Access the full report here.

Not a terminal user? Click here to learn more.

Disclosure
This is a synopsis of the full report. The data included in these materials are for illustrative purposes only. The BLOOMBERG TERMINAL service and Bloomberg data products (the “Services”) are owned and distributed by Bloomberg Finance L.P. (“BFLP”) except (i) in Argentina, Australia and certain jurisdictions in the Pacific Islands, Bermuda, China, India, Japan, Korea and New Zealand, where Bloomberg L.P. and its subsidiaries (“BLP”) distribute these products, and (ii) in Singapore and the jurisdictions serviced by Bloomberg’s Singapore office, where a subsidiary of BFLP distributes these products. BLP provides BFLP and its subsidiaries with global marketing and operational support and service. Certain features, functions, products and services are available only to sophisticated investors and only where permitted. BFLP, BLP and their affiliates do not guarantee the accuracy of prices or other information in the Services. Nothing in the Services shall constitute or be construed as an offering of financial instruments by BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an investment strategy or whether or not to “buy”, “sell” or “hold” an investment. Information available via the Services should not be considered as information sufficient upon which to base an investment decision. The following are trademarks and service marks of BFLP, a Delaware limited partnership, or its subsidiaries: BLOOMBERG, BLOOMBERG ANYWHERE, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG PROFESSIONAL, BLOOMBERG TERMINAL and BLOOMBERG.COM. Absence of any trademark or service mark from this list does not waive Bloomberg’s intellectual property rights in that name, mark or logo. All rights reserved. © 2024 Bloomberg.
Bloomberg Intelligence is a service provided by Bloomberg Finance L.P. and its affiliates. Bloomberg Intelligence likewise shall not constitute, nor be construed as, investment advice or investment recommendations, or as information sufficient upon which to base an investment decision. The Bloomberg Intelligence function, and the information provided by Bloomberg Intelligence, is impersonal and is not based on the consideration of any customer’s individual circumstances. You should determine on your own whether you agree with Bloomberg Intelligence. Bloomberg Intelligence Credit and Company research is offered only in certain jurisdictions. Bloomberg Intelligence should not be construed as tax or accounting advice or as a service designed to facilitate any Bloomberg Intelligence subscriber’s compliance with its tax, accounting, or other legal obligations. Employees involved in Bloomberg Intelligence may hold positions in the securities analyzed or discussed on Bloomberg Intelligence.

Recommended for you

Request a Demo

Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Now, let us do that for you.