Innovation Highway Report


July 19, 2023


Inside the executive summary

  • Autonomous vehicles (AVs) offer immense promise to reduce accidents, enhance mobility options for disadvantaged populations, and deliver substantial economic benefits.
  • The report uses the latest data to quantify AVs' economic and social benefits and underscores the need for a national regulatory framework.
  • The report highlights the importance of U.S. leadership in AV innovation while cautioning about strong competition from state-subsidized Chinese manufacturers and other foreign rivals.

This report examines the potential social and economic benefits of autonomous vehicles (AVs). The U.S. and global markets for AVs will be extensive, and companies in the United States, China, Japan, and elsewhere are competing to develop and market them. The appeal and benefits of AVs rest on their potential to sharply reduce traffic accidents, enhance people’s mobility and access (especially for those who have physical or visual limitations), reduce greenhouse gas emissions, and provide substantial economic benefits for the public. This report presents econometric models to estimate those potential benefits. 

Estimates of when AVs will be widespread vary, depending on one’s views about the pace of technological progress, consumer acceptance, the development of a conducive regulatory framework, and other factors. Most analysts expect high-level AVs (Levels 4 and 5) to enter the market in the next decade, and forecasts for widespread sale and adoption of these vehicles range from 2035 to the 2050s. Today, numerous companies across the United States are testing and deploying AVs on public roads. Because we cannot know precisely when and to what extent Americans will adopt AVs, our models project the likely effects when AVs constitute 25% or 50% of the U.S. motor vehicle fleet. We focus mainly on the nearest-term scenario, a 25% adoption rate. Because we also do not know the precise technologies of those AVs, our models project the likely effects for three stages of AV operations and technology based on the multimodal traffic flow model developed by the European Union’s AV project.

  1. Basic AVs: Programmed to take a safe approach on braking distances, maintain sizable gaps for lane changes, and travel through intersections without signals. 
  2. Standard AVs: Programmed to follow traffic laws and operate like an unimpaired human driver with sensors to determine distances and speeds of other vehicles. 
  3. Advanced AVs: Programmed with high levels of sensor awareness and predictive capacity and the capability to cooperate with other AVs, resulting in smaller gaps in all maneuvers. 

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The detailed report on the safety, climate and mobility benefits associated with autonomous vehicles.

Safety and Health Benefits

We found that accident rates would fall sharply (compared with accident rates in 2021) if AVs represented 25 percent of U.S. motor vehicles. 

With Basic AVs, we estimate 571,000 fewer accidents with 5,000 fewer fatalities and economic savings of $38 billion. With Standard AVs, we estimate 1,145,000 fewer accidents with 9,000 fewer fatalities and economic savings of $75 billion. With Advanced AVs, we estimate 1,442,000 fewer accidents, 12,000 fewer fatalities, and $94 billion in savings. 

Mobility and Access Benefits

We found that at a 25% adoption rate, Standard and Advanced AVs should markedly enhance mobility and access for elderly people and nondrivers, and Advanced AVs should also greatly enhance mobility for persons with disabilities. 

Although Basic AVs would not significantly enhance mobility, Standard AVs should increase annual vehicle miles traveled (VMT) by older people by a total of 2.5 billion miles and the VMT of nondrivers by 1.3 billion miles. Advanced AVs should increase the annual VMT of persons with disabilities by 4.6 billion miles, the annual VMT of older people by 4.9 billion miles, and the annual VMT of nondrivers by 2.4 billion miles. 

Climate and Environmental Benefits

We found that a 25% adoption of electric Advanced AVs should significantly reduce CO2 and NOx emissions, while also accounting for emissions associated with generating the electric power for AVs. Because electric vehicles produce no exhaust, the net benefits depend on those associated gains and the traffic and fuel efficiency of AV operations, less the emissions from the grid generating the electric power of AVs. We estimate the net benefits using three possible configurations for the grid based on the continued use of fossil fuels with greater or lesser use of substitutes: 

  1. Climate+: Grid with enhanced use of sustainable fuels and less use of fossil fuels. 
  2. Climate Neutral: Fossil fuels continue to dominate the grid without an enhanced role for sustainable energy. 
  3. Median Grid: The median between these alternatives. 

We use motor vehicle CO2 and NOx emissions in 2021 as a baseline to estimate the net changes in emissions with a 25% adoption rate of electric-powered Advanced AVs. (Notably, emission reductions would be greater with Standard AVs or Basic AVs because Advanced AV operations require more electrical power than Standard or Basic AV operations).

  • With a 25% adoption of Advanced AVs and a Climate + grid, CO2 emissions related to motor vehicles would be 8.2% lower, and NOx emissions would be 8.9% lower. 
  • With a 25% adoption of Advanced AVs and a Climate Neutral grid, CO2 emissions should fall 5.9%, and NOx emissions should fall 6.4%. 
  • With a 25% adoption of Advanced AVs and a median grid, CO2 emissions should be 7.1% lower, and NOx emissions should be 7.7% lower. 

Economic Competitiveness

The report also examines the economic importance of U.S. competitiveness in the production and adoption of AVs. The U.S. motor vehicle industry is a vital source of jobs for Americans. In 2021, American motor vehicle and parts manufacturers and dealers directly employed 2,922,000 people. In addition, their suppliers employed 1,270,000 people creating the industry’s intermediate inputs, for a total 4,192,000 jobs. With the introduction of AVs, these employment numbers will increase. 

We also expect the composition of that employment to shift toward more highly paid, technologically related jobs in software, computers, and telecom equipment and services. 

The adoption of AVs will have other economic benefits. At a 25% adoption rate, annual savings from fewer accidents should total up to $94 billion (in 2021 dollars). The mobility benefits of AVs include gains in jobs and income for nondrivers, people with disabilities, and people living in areas with little access to public transit. 

Further, many technologies developed for AVs can be used in other areas, from mining to spacecraft, creating jobs to support those activities. 

As U.S. and global markets for AVs grow, American producers will face strong competition from state-subsidized Chinese manufacturers and other foreign competitors. In this rivalry, the United States has a technological edge because U.S. companies dominate the world’s top producers of software, computers, and telecom equipment and services. China’s advantage comes from its extensive state subsidies for Chinese AV makers. U.S. policymakers can level the playing field by actively promoting the safe and secure deployment of AVs in the United States.

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Innovation Highway Report