Roland Berger predicts that ADAS systems will be widely used by 2025

“By 2025, ADAS features will be ubiquitous and 85% of global vehicle production will feature some level of autonomous driving, while highly automated driving at Level 4/5 will still be rare.”

A newly released study by Roland Berger shows that by 2025, advanced driver assistance systems will be common in everyday vehicles. However, the development of ADAS has been delayed recently by the COVID-19 pandemic, and the industry must catch up in time to meet future regulations and demands.

As the market for basic driver assistance features grows, the technology will become a common feature of every new car by 2025.

1. Research Summary

Advanced driver assistance systems (ADAS) will be a common feature of nearly all new cars in developed countries by 2025. But predictions for the future penetration of ADAS features vary widely among manufacturers, suppliers, industry analysts and academics. Moreover, even historical penetration rates are widely disputed.

To find more accurate answers, Roland Berger recently surveyed more than 80 Tier 1 global manufacturers, automotive suppliers and industry experts, as well as nearly 3,000 drivers, direct market expert surveys, international consumer surveys, and in-depth desk research to understand the supply and demand of expected ADAS functions in 2025 and beyond.

The study roughly analyzed 18 ADAS functions that are already in commercial use or will be commercially available by 2025. The study found that 85% of cars produced globally in 2025 will have a certain degree of autonomous driving function (L1 level and above). At the same time, it is expected that the penetration rate of L4 ("highly automated driving") or L5 ("automatic driving") functions will not exceed 1% by 2025.

Due to stricter regulations, Europe is expected to lead all other regions in ADAS penetration by 2025. Meanwhile, the United States ranks ahead of China in ADAS functionality by 10-20%, especially in terms of penetration of basic Level 1 functionality and Level 3 (“conditionally automated driving”) functionality or higher.

尽管持续的大疫情已经减缓了全球ADAS系统的发展和需求，但预测到2025年基本的驾驶员辅助功能仍将显著增长，从而使这项技术无处不在。因此，关键的传感器设备，如前向雷达和摄像头，在未来几年将成为标准的车载设备。

2. Functional definition

Advanced driver assistance systems were invented to reduce the human error that causes most car accidents. The technology started 50 years ago with anti-lock brakes, and ADAS has evolved to include electronic stability control, traction control, blind spot information systems, lane departure warnings, and adaptive cruise control.

Today, ADAS is one of the fastest growing segments in automotive electronics, but not all ADAS systems are treated equally. In fact, there is no standard nomenclature for ADAS systems, which makes it difficult to track their development. Further complicating the issue is that OEMs often bundle multiple ADAS features into optional technology packages or enable features only through paid software updates.

However, broadly speaking, ADAS is defined by one of the following six feature levels (L0-L5):

L0: “Basic”. Includes front and rear collision warning indicators, BSD blind spot detectors, and LDW lane departure warnings. Many modern vehicles either come with these features as standard or as options.

L1: “Driver Assistance”. Includes AEB automatic emergency braking, ACC adaptive cruise control, LKA lane keeping assist, distance control, automatic speed limit, interactive assistance and collision avoidance functions. Ford’s Co-Pilot 360 safety suite is a good example.

L2: “Partially automated driving”. This includes adaptive cruise control with lane keeping assist, advanced cruise control (adaptive cruise control with parallel automatic lane switching that does not require driver visual attention and manual operation under certain conditions), automatic emergency steering and braking, and fully automated parking assist. Ford’s Co-Pilot 360 Assist+, GM’s Super/Ultra Cruise, Tesla’s Autopilot, and Volvo’s Pilot Assist are all examples.

L3: “Conditional Autonomous Driving”. Highway driving with automatic lane changes, full environmental monitoring, remote parking, and no human interaction between exits. Examples include Tesla’s Autopilot, Audi’s Traffic Jam Pilot, Mercedes’ Drive Pilot, and BMW’s ADS iNEXT.

L4: “Highly automated driving”. Fully automated driving in certain situations, without human backup. Production models not yet available or announced.

L5: “Fully autonomous driving”. A fully autonomous vehicle, without the need for a human driver. Not yet available, expected to be around 2030 or 2035 at the earliest.

The above level classification will be used to analyze the current status of ADAS.

3. Key Insights

After surveying more than 80 automotive experts (50% from OEMs, 40% from Tier 1 suppliers, and 5% from technology/industry analysts in the U.S., Europe, and China), Roland Berger surveyed nearly 3,000 potential consumers who had purchased or leased a new car in the past 12 months (or intend to do so within the next three years). These two datasets were then cross-referenced with research from leading analysts and third-party databases, including IHS Market, SBD Automotive, NADA, and JD Power.

Below are proprietary forecasts of key ADAS insights by region to 2025 and beyond:

1. By 2025, Level 3 and above functions will account for 10-15% of total ADAS penetration, while Level 2 functions will achieve more than 30% penetration in all regions.

2. Due to stricter regulations, Europe is expected to have the highest penetration of ADAS new car sales by 2025. About 46% of vehicles will have only Level 1 functionality, while it will lead the world in Level 2 and Level 3 functionality, at 39% and 14%, respectively. Unlike the United States and China, 100% of European cars are expected to have at least Level 1 technology or higher.

3. As in Europe, the US market is expected to significantly increase ADAS availability across the board by 2025, even surpassing China. It is predicted that more than 50% of new cars will use L1 technology, 35% will use L2 technology, 9% will use L3 functions, and only 1% will use L4/L5 technology. It is expected that by that year, less than 5% of US cars will have no ADAS functions other than simple warning indicators.

4. China’s new car adoption of ADAS is also expected to grow at a comparable level by 2025, although overall it will be about 25% lower than the U.S. It is predicted that about 30% of new cars will have almost no ADAS features, 30% will have only L1 features, one-third will have L2 features, and the remainder (5%) will have L3 or higher features.

5. Globally, it is estimated that by 2025, 14% of vehicles worldwide will have no ADAS functions, 40% of vehicles will have L1 functions, 36% of vehicles will have L2 functions, and 10% of vehicles will have L3 or higher functions.

All in all, there will be a sharp rise from current levels, as shown in the chart below.

ADAS function penetration forecast in 2025

Due to regulatory requirements, European ADAS features are expected to develop rapidly and lead the overall by 2025. In fact, by 2024, EU regulations on ADAS features will make forward-facing cameras and radars standard equipment on all vehicles sold in the EU. For example, collision warning alarms are expected to increase from 83% today to 100% by 2025. Similarly, automatic speed limit will jump from 48% today to 100% in the same period, and lane departure prevention will double to 100% penetration. 

As ADAS features become increasingly standardized and commoditized, OEMs will increasingly look to sensor designers and suppliers as production volumes increase, especially in Europe, but also in the U.S. and China, where more ADAS features will be required in the coming years. In turn, suppliers along the ADAS value chain must rethink their sources of differentiation, both in terms of manufacturing scale and new products and software.

Forecast of ADAS function penetration rate at each level

Analysis conclusion

According to Roland Berger's survey model, looking forward, ADAS growth after the epidemic will depend on the level of functional level. For example, L0-3 penetration will face limited impact, while L4-5 functions may face delays as OEMs and their suppliers adjust their strategies to adapt to the decline and changing needs when the global market moves towards a full recovery.

As the research reveals, certain regions will suffer more than others. When asked what impact COVID will have on L0-L3 adoption prospects, U.S. respondents indicated a pre-COVID net negative impact of 13%. Conversely, Chinese respondents indicated a net positive impact of 18%, followed by European respondents at 8%.

In other words, U.S. consumers plan to limit their purchases of ADAS features due to economic challenges, while Chinese and European consumers’ interest in ADAS features is increasing as regulations and available technology increase. That said, all three regions are expected to see a significant increase in ADAS adoption by 2025.

However, when it comes to general car purchase intentions, the recessionary effect of the COVID-19 pandemic on consumer sentiment is consistent. Between one-third and nearly half of respondents globally said COVID had a negative impact on their willingness to buy a new car by 2025. Regionally, U.S. respondents said COVID had reduced new car intentions by -45%, followed by Europe at -39% and China at -32%, which is an unavoidable concern for the automotive market in the coming years.

尽管ADAS的未来仍然充满希望，但会受到新冠疫情的持久影响。这种不确定性对美国采用ADAS以及全球采用更先进的自动驾驶功能造成了一定的负面影响。尽管如此，ADAS功能将在2025年继续显著增长，并在2030年和2035年获得更多动力，预计届时第一波高级自动驾驶和/或完全自动驾驶车辆将首次亮相。

The penetration rate of lower-level ADAS systems is relatively less affected by the COVID-19 pandemic

The COVID-19 pandemic has had a significant impact on consumers’ willingness to buy cars

references:

ADVANCED DRIVER-ASSISTANCE SYSTEMS: A UBIQUITOUS TECHNOLOGY FOR THE FUTURE OF VEHICLES，Roland Berger，Aauthor：Konstantin Shirokinskiy, Wolfgang Bernhart ， Stephan Keese。