The autonomous vehicle market size was valued at $60,325.7 million in 2025, and is projected to reach $448,568.61 million by 2035, registering a CAGR of 22.2% from 2025 to 2035. These figures are according to an Allied Market Research report.
The outbreak of the Covid-19 pandemic had a negative impact on the autonomous vehicles market, owing to supply chain disruptions. The global market encountered a standstill, with disruptions in the supply of essential materials such as automotive components in 2020 and 2021 as the pandemic occurred.
Original equipment manufacturers (OEMs) engaged in vehicle production were compelled to cease their manufacturing and assembly lines to prevent the transmission of the COVID-19 virus among their workforces. Moreover, the testing of new vehicles and associated technologies was also impeded owing to these circumstances. Conversely, the need for contactless product delivery saw a sharp rise, leading to heightened global demand for the integration of self-driving trucks as the pandemic unfolded. This increased demand paved the way for technology-driven companies to create self-driving vehicle software solutions and offer them to original equipment manufacturers (OEMs) for testing and eventual deployment in the upcoming period.
Furthermore, the prospects for the uptake of self-driving vehicles such as trucks, and buses by logistics firms, delivery services, and the food service sector served as a driving force for OEMs and other players in the autonomous vehicle industry, propelling autonomous vehicle technology to new heights.
On the basis of level of automation, the level 5 segment held the highest market share in 2025, accounting two-thirds of the global autonomous vehicles market revenue, and is estimated to maintain its leadership status throughout the forecast period. This segment is projected to manifest the highest CAGR of 25.1% from 2025 to 2035, owing to the demand.
Based on application, the self-driving truck segment held the highest market share in 2025, accounting for nearly half of the global autonomous vehicle market, however others segment is estimated to lead the market segment during the forecast period. The self-driving truck technology is used in numerous sectors for applications such as long-haul transportation, last mile delivery, mining, and ports. Government strategies for the development of self-driving vehicle infrastructure have significantly expanded the potential of the global market.
However, civil segment is projected to manifest the highest CAGR of 22.7% from 2025 to 2035. Digital platforms developed by firms such as Cisco and IBM that enhance surveillance, optimize waste collection, and manage traffic and streetlights are driving market growth. An autonomous vehicle is one that can carry out the difficult task of driving without the assistance of a human driver. It is also referred to as a self-driving vehicle, driverless vehicle, or automated vehicle.
On the basis of component, the autonomous vehicles market accounted for the largest share in 2025, contributing to nearly half of the global autonomous vehicles Market revenue, however, software and services are projected to lead the market during the forecast period. Many auto manufacturers have focused on developing advanced hardware systems for autonomous vehicles, due to which investments have gone on in the market. For instance, in May 2022, Hyundai Motor Group invested $5 billion in the development of autonomous driving capability. However, the software and services segment are expected to portray the largest CAGR of 21.5% from 2025 to 2035. Software is used for mapping and localization, planning and decision-making, connectivity, and communication among others which are necessary for the sensors to work properly. Digitization and technological advancement have introduced multi-function software platform that is deployed in the autonomous vehicles.
On the basis of region, North America held the highest market share in terms of revenue in 2022, accounting for two-fifths of the global autonomous vehicles market revenue. However, the LAMEA region is expected to witness the fastest CAGR of 16.2% from 2025 to 2035. LAMEA regions the adoption of autonomous vehicles, as they can address the complex challenges associated with extensive transportation routes, which are integral to the economic growth of these nations.