Morgan Stanley: China's Cost Reduction to Accelerate Global Robotaxi Market Expansion
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Morgan Stanley forecasts the global robotaxi market will reach $1 trillion by 2040, calling China's falling manufacturing costs a "grossly underestimated accelerant" that could reshape the industry's path to commercialization.
Where does a trillion-dollar market come from?
Morgan Stanley's latest report projects the global robotaxi market at $1 trillion by 2040.
Three forces drive it: falling hardware costs, rapid AI iteration, and clearing regulatory frameworks.
This means → no single breakthrough gets you there — policy, supply chain, and tech all have to arrive together.
How big is China's cost advantage?
The report estimates Chinese-made robotaxi component costs will drop to $35,000–$40,000 per vehicle by 2027.
In plain terms = the hardware bill for one driverless cab, built on Chinese supply chains, comes in far cheaper than rivals — directly lowering the bar for mass deployment.
Morgan Stanley calls this cost edge a "grossly underestimated accelerant" for global robotaxi expansion.
When does the business actually turn profitable?
Morgan Stanley expects robotaxi services to cover vehicle operating costs by 2028 — revenue per car matching its running expenses.
Around 2030, the industry is projected to enter scaled commercial operations.
This means → from cash-burning pilots to self-sustaining fleets, Morgan Stanley sees roughly a three-year window ahead.
Who is leading the race?
The report puts the U.S. and China as the two dominant forces in the current global landscape.
Globally, Tesla and Waymo are named leaders; in China, Baidu, XPeng, and WeRide are listed as frontier players, each with distinct structural advantages.
Morgan Stanley adds that Europe and the rest of Asia may gain importance by mid-decade — this reflects a shift from a U.S.–China duopoly toward a multipolar race.
Content is for reference only, not financial advice.