Hong Kong

By 2025, the race to gain leadership in assisted and autonomous driving tech will be on. The ground is being broken by automakers like Tesla who eye the USD 400 billion potential market by 2035 in their efforts to get in on the lucrative self-driving car action. But it may be an uphill battle to make a success of this field, which is evolving so quickly.  

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Auto driving technology progress continues. Cars with more advanced features that don’t need a constant driver involved will be real. In an industry sense, these capabilities are broken down on a scale of 0 to 5, Level 5 being fully autonomous vehicles. Level 4 robotaxis are already being tested in controlled environments by companies such as Alphabet’s Waymo, Pony AI and Baidu. However, only 5.5% will come equipped with Level 2+ assistance, including cruise control and automated lane changes, Canalys said.  

The U.S. President about to take office, Donald Trump, has potential to spur the uptake of self-driving technologies. Tesla CEO Elon Musk shows support for Trump's plan to ease regulatory hurdles to artificial intelligence development, according to reports from *The Washington Post.* Automakers could, for instance, get data more quickly and commercialise new inventions more quickly through simplified regulatory processes and expanded pilot programs.  

Autonomous vehicle race is in full swing around the globe, with China leading the race. By 2040 Goldman Sachs expects that 90 percent of the vehicles sold in China will have Level 3 and higher autonomy versus 65 percent in the US. But if Trump's policies accelerate such adoption, U.S. highways could sound like China soon, and other regions will have to keep pace.  

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There are challenges with progress however. And in China, automakers are using autonomous technology to inject a price war, as customers expect autonomous features at no extra cost. The result is tighter profit margins, as costs rise without necessarily enabling higher vehicle prices.  

Carmakers are responding by investing heavily in autonomous technology. For instance, BYD and Toyota have committed billions to innovation, while others like Volkswagen are forming partnerships, such as its USD 700 million stake in China’s Xpeng. As the competition intensifies in 2025, the self-driving race will test automakers’ ability to stay ahead in a rapidly changing market.