Morgan Stanley forecasts US$1 trillion robotaxi market by 2040

Morgan Stanley projects the global robotaxi market will reach US$1 trillion by 2040, driven by plummeting manufacturing costs in China. In a research note, the bank forecasts Chinese-made robotaxi parts costs will drop to between US$35,000 and US$40,000 per vehicle by 2027, acting as a major accelerant for the industry. Chinese players Baidu, Xpeng, and WeRide are positioned as regional front-runners alongside global leaders Tesla and Waymo. Lower hardware costs, advances in AI, and clearer regulations could allow robotaxi services to cover operating costs by 2028, with scaled commercial operations by 2030. Morgan Stanley notes that Europe and broader Asia may gain importance by mid-decade, while China's front-runners leverage distinct structural advantages.