Autonomous vehicles (2024)

It speaks volumes that during a global AI boom, Europe’s largest-ever round for a startup deploying this tech was raised by Wayve, a UK-based company developing software for autonomous vehicles (AVs). When you look at the size of the AV market globally, it’s not hard to see why investors shelled out more than $1bn on the company’s Series D. According to Statistica, it was worth $148bn in 2022 and projected to rise to $2.2tn by 2030.

Wayve’s megaround is a sign that Europe’s nascent AV sector is maturing. In the US, that happened between 2018 and 2021, when startups in the sector collectively raised $31.8bn, and a select few like Alphabet-backed Waymo, Elon Musk’s Tesla and General Motors’ Cruise emerged as clear leaders in the race to develop self-driving vehicles. In Europe, the playing field is still very much open. Wayve is undeniably leading the pack, but there are several well-funded startups looking to develop and deploy software and hardware for autonomous vehicles across the region. These startups could kick on as VCs begin to throw serious cash at the sector. Since 2021, European AV startups have picked up $4bn — nearly three times as much as the previous ten years combined. In 2023, UK duo Conigital and Oxa raised £400m and £140m, respectively. The year before Sweden’s Einride picked up $200m, as did Wayve.

There’s good reason for VCs to be bullish. Regulation to allow self-driving vehicles on public roads is coming into force in Europe, albeit gradually, and some major technological advancements have made the prospect of developing truly autonomous vehicles — known as possessing so-called level five autonomy — a distinctly realistic possibility. AVs have been taxiing folk around San Francisco for years and in Europe, they've made it onto some roads in France and Germany, alongside several pilots and trials in the UK. For all that mileage, those AVs have only been let loose in a specific geofenced area — level four autonomy.

Part of the reason for that is the huge technical challenge of developing an AI system that can make the right decisions when faced with infinite possible scenarios on the roads. It’s a feat no company has yet proven it can do. There’s also the challenge of commercialising — something most European AV startups are yet to do at scale. Sweden’s Einride, which is developing AV tech — and electric vehicles — for freight mobility is deploying autonomy among its fleet of vehicles incrementally as regulation and technology permits — rather than waiting until it has a fully autonomous vehicle to release a commercial product.

Germany’s Fernride has focused on developing AV solutions for private, industrial yards, where there are fewer regulatory barriers than on public roads. While Wayve hasn’t publicly announced any commercial deals yet, the company is in talks with car manufacturers about using its tech. Making money is a work in progress for every European AV startup — and something the industry knows it needs to work out sooner rather than later. “There is a big sense of urgency to start generating revenues,” says Hendrik Kramer, founder and CEO of Fernride. “In the next couple of years, we will see that there will be winners and losers in the industry.”