The reality is that no one can see the future, and with so many variables affecting industry trends, all prognostications come with a healthy margin of error. This is particularly true with emerging industries where the data set around which market predictions are made is relatively small.
But hitting a number exactly on the head isn't the point of these reports. Instead, they exist to show where a particular market may be headed in broad strokes. The predictions are based on more than throwing darts at a board and even if the prophecies don't come true, they still provide a trove of useful insight.
It is through that lens that a recent report from IHS Markit should be viewed. The global information and analytics company explored the future of the self-driving car industry and forecasted that more than 33 million autonomous vehicles will be sold by 2040. According to IHS Markit's analysts, the AV revolution will start long before that -- but it won't begin with individual consumer ownership.
"The first autonomous vehicle volumes -- beyond retrofit test vehicles -- will arrive in 2019 through driverless mobility services," Egil Juliussen, director of automotive technology research at IHS Markit, wrote in the report. "Volumes will surpass 51,000 units in 2021 when personally owned autonomous cars reach individual buyers for the first time, and IHS Markit forecasts estimate nearly 1 million units will be sold in 2025 across shared fleets and individually owned cars."
This projected trend is in line with the common belief that fleet vehicles will account for the overwhelming majority of self-driving cars when the technology first hits the market. Without the need for a human driver, autonomous vehicles operating within ride-hailing services will be able to run 24/7. Fleet managers will need to take advantage of this increased uptime to justify the added expense that will come with the first wave of self-driving cars. As the technology costs come down so will vehicle costs, which will then expand the market for the driverless cars.
Autonomous vehicle sales in the US, China and Europe will account for approximately 27 million of those 33 million annual sales, according to IHS.
China is expected to be the leader in total volume at 14.5 million units, which is influenced by the fact that its enormous population could top 1.5 billion people by 2040. The US could account for 7.4 million units per year by that point, thanks to hosting the world's foremost AV developers. And while sales in Europe could be hampered by regulations that discourage ride-hailing services from operating, IHS Markit still predicts 5.5 million annual vehicle sales across the continent by 2040.
While 2040 may seem far away, IHS Markit analyst Jeremy Carlson cited Waymo's forthcoming AV ride-hailing service in Phoenix as evidence that many Americans will have the opportunity to ride in a driverless car much sooner.
"We as consumers are going to start to get hands-on experience much sooner than expected," Carlson told The Drive. "Consumers are going to get exposure in a handful of cities to start with."
Those early consumer experiences are one of the factors that could contribute significantly to whether or not that 33 million statistic comes true or not.