Automakers have been gradually improving autonomous driving technology in vehicles, working closely with tech companies to enhance features to get them on the roads. Several cities have rolled out autonomous taxi and bus pilot schemes in recent years, demonstrating just how far the technology has come. However, there are still significant limits to how and where autonomous vehicles can drive. Now, as Nvidia has big plans to deploy more high-tech self-driving cars, some other automakers, such as Mercedes, are putting their projects on pause.
When discussing the concept of an automated vehicle (AV), most people think of wholly independent self-driving cars, where a human does not need to intervene in the maneuvering of the vehicle. In fact, there are six categorizations of automation, measured from zero to five, from no driving automation to driver assistance, partial driving automation, conditional driving automation, high driving automation, and full driving automation.
The rollout of AVs has accelerated in recent years, with several ride-hailing companies incorporating AVs into their fleets. Waymo (formerly the Google self-driving car project) has rapidly become one of the market leaders, while well-known automakers, such as GM and Mercedes, and EV-maker Tesla have also ventured into the industry. Fleets of robotaxis are expected to operate at a large scale in 40 to 80 cities by 2035.
The AV market is expected to grow at a CAGR of 5.95 percent from 2024 to 2030, to reach a value of $127.31 billion. Market growth will be driven by key trends such as smart learning environments, advanced digital signage, AI integration, and AV-as-a-Service models, according to Research and Markets data. However, the ongoing trade war between the United States and China could alter this forecast.
However, at present, most automakers offer very little automation in their vehicles. While Tesla and several other companies claim to have developed fully autonomous capabilities, their definitions often vary. Many vehicles are now fitted with adaptive cruise-control and lane-assist, and those in the EU now offer Intelligent Speed Assistance, a technology that can read traffic signs and use the brakes. This puts them at around level 2 of automation.
Some companies have developed AVs with more advanced levels of automation. For example, Waymo launched the sixth generation of its Waymo Driver autonomous driving system in 2024 and now operates a fleet of self-driving vehicles in various cities in the United States. Waymo’s vehicles operate at an autonomy level 4, meaning that they can drive themselves completely without human intervention within specific, defined areas. However, Level 5 automation, an AV that can drive anywhere in road traffic and under all conditions without the need for a human being present, has yet to be achieved.
In 2026, greater competition may be coming as Nvidia reveals a new tech platform for AVs. NVIDIA, the global leader in microchip production, has helped power the AI revolution, and it is now turning its attention to self-driving vehicles. In January, the company’s CEO, Jensen Huang, unveiled the Alpamayo, an open-source AI model, at a CES tech conference in Las Vegas, stating that the technology would bring “reasoning” to AVs. The firm presented a video demonstration of an AI-powered Mercedes-Benz manoeuvring through San Francisco with a passenger behind the steering wheel, with their hands in their lap.
Huang said that it would help cars to “think through rare scenarios, drive safely in complex environments, and explain their driving decisions.” The CEO stressed that “Alpamayo represents a profound shift for NVIDIA, moving from being primarily a compute to a platform provider for physical AI ecosystems.” Huang said that Nvidia planned to partner with Mercedes-Benz to roll out the technology.
However, Mercedes-Benz recently announced it would be pausing its Drive Pilot programme due to regulatory pressures, mounting costs, limited usability, and shifting supplier dynamics. The German automaker currently offers level 3 certified vehicles to U.S. consumers, with certain driving constraints.
To use the technology, consumers were required to purchase the Drive Pilot hardware and then pay an annual subscription of $2,500 to use the service. The high cost of use limited consumer interest in the product, despite the technological sophistication. The programme relied on cameras, radar sensors, ultrasonic sensors, and lidar technology supplied by Luminar to function. It is not yet clear how the new Mercedes-Nvidia partnership will play out.
During an interview this month, Nvidia’s vice president of the automotive team, Ali Kani, stated that partial autonomous driving may be arriving in Europe this year, and more advanced level 4 AVs could be rolled out in Europe as soon as next year. This suggests that the chip’s major is looking beyond the U.S. market. “We need to go as fast as regulation allows us, and I think what we see is it’s opening up,” Kani said.
Despite many setbacks, several companies are confident about their ability to roll out vehicles with a high level of automation in the coming years, depending on the regulatory constraints they may face. More city governments and consumers are showing interest in self-driving vehicles, and several tech companies and automakers are responding by developing highly advanced technologies.
By Felicity Bradstock for Oilprice.com
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