Market for Self-Driving Cars Could Reach $42 Billion by 2035

Nearly 10% of cars sold in the world by 2035 will be able to pilot themselves automatically under virtually any situation, predicts Boston Consulting Group.

The firm expects partly autonomous vehicles cars that can drive automatically on highways and in stop-and-go traffic to arrive in significant numbers by 2017. It says fully automatic systems for city driving will arrive by 2022, followed by completely autonomous vehicles a few years later.

By 2035, autonomous vehicles will represent a global market worth roughly $42 billion per year, BCG estimates. It says the initial cost of technology to enable fully automatic driving could be as high as $10,000 per vehicle. It figures prices will drop by 4%-10% annually over the first 10 years.

As prices decline, worldwide demand for self-driving vehicles could reach 25% by 2035, according to the firm. BCG expects Japan and western Europe to be the fastest adopters. Acceptance in the U.S. will pace the overall global rate of adoption. The firm says China will become the largest market for autonomous vehicles, contributing as much as 30% of global sales by 2035.

BCG also anticipates a strong market in large cities for fully automated "robo-taxis." It estimates such vehicles would cost least 25% less to operate than taxis piloted by a human driver.