Vehicles with autonomous capabilities are expected to create massive growth for automotive suppliers by the end of the decade, according to reports.

Mercedes-Benz S500 Inteligent Drive TecDay Autonomous Mobility Sunnyvale 2014

Despite the cloud of doubt cast over autonomous vehicles following the Tesla Autopilot incident last week, it seems that driverless technologies will continue to grow rapidly in the short-term.

Citing a report by consulting firm AlixPartners, industry journal Automotive News expects manufacturers’ spending on autonomous driving technologies to surge over the next five years.

The AlixPartners report predicts that by 2020, semi-autonomous vehicles that have the capability to accelerate, brake and steer themselves will generate US$20 billion ($26.4 billion) to US$25 billion ($33 billion) worth of software and sensor sales.

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Using data collected by Dolcera and IHS Automotive, the report claims up to US$15 billion ($19.8 billion) will be spent on navigation mapping systems and collision-avoidance technologies.

Sales of vehicle cameras, radar sensors, ultrasonic sensors and lidar technology are estimated to generate US$9.9 billion ($13 billion) annually.

Lidar is a laser-based vision system, that relies on the light from a laser to track the distance of other objects. While still in its early stages for passenger-vehicle use, lidar technology is expected to generate US$185 million ($244.4 million) of annual sales by 2020, and continue to grow as it attracts the attention of more manufacturers.

Continental AG, Robert Bosch GmbH, Autoliv, Delphi and Denso - some of the automotive industry’s largest suppliers - are currently developing lidar systems.

Google Autonomous Prius - 1

Above: Google is known to be developing autonomous vehicle technologies

The rapid growth in vehicle software is also expected to present a huge opportunity for companies in Silicon Valley, such as tech giant Google.

Mark Wakefield, managing director at AlixPartners and co-author of the report, said that companies like Google and Mobileye - a fast-growing supplier of obstacle-detection software - are poised to dominate the vehicle software market in the coming years.

According to Wakefield, the emergence of new competitors out of Silicon Valley poses a threat to manufacturers and traditional suppliers, with companies like Google accustomed to one-year life cycles for consumer electronics products.

“This is really where the automakers and traditional suppliers are furthest behind,” said Wakefield.

“They have to shift their workforce and their capital expenditures.”

Several manufacturers have already announced their commitment to developing autonomous-capable vehicles, including Volvo and Nissan.

Volvo XC90 Drive Me

Swedish auto maker Volvo recently launched its ‘Drive Me London’ autonomous driving trial in the UK, putting regular families in autonomous cars on public roads.

Meanwhile, Nissan’s vision for ‘Intelligent Mobility’ sees the adoption of emissionless, driverless vehicles and a connected network of smart cars, smart offices, smart streets and smart houses.

In addition, the Japanese brand is planning to release its first ‘ProPilot’ autonomous-capable models in the next 12 months, with a Japan-specific model due by the end of this year while an update for its popular Qashqai SUV will become the first ProPilot model in its European line-up.