Robotaxis have proven to be one of this year’s most prominent autonomous vehicle technologies. Goldman Sachs reports that the TAM (Total Addressable Market)  opportunity will total $47 billion by 2035 and have positive growth margins in early 2026. Waymo One notably provides more th an 250,000 rides every week throughout cities in the US, including Phoenix, San Francisco, Los Angeles and Austin, TX, and has plans to bring driverless ride-hailing services to Atlanta, Miami and D.C. in 2026. 

Additionally, Toyota and Waymo are collaborating to bring Waymo’s ride-hailing technology to consumer vehicles. This month, Uber and WeRide released their plans to bring robotaxis to 15 more cities outside the U.S. and China. Uber Technologies and Momenta are also teaming up to bring robotaxis to global markets and Pony.ai is partnering with Shenzhen’s Xihu Group with plans to deploy 1,000 robotaxis on roads throughout the city. And, of course, Tesla just announced plans to put their newly launched robotaxis on the streets next month to launch their ride-hailing service in Austin using their Full-Self Driving Solution. 

These are just a few of the most recent deals that have been publicly announced. 

The Sensor Revolution

Why is robotaxi development exploding?

Over the years there has been tremendous advancement in the technology necessary to develop robotaxis and have them safely drive on the road. Developments in artificial intelligence and sensors like high-definition radar, advanced lidar, AI-powered camera systems and multi-modal sensor fusion allow vehicles to navigate complex urban environments without human oversight.

As the industry transitions from demonstrations to scaled deployment of robotaxis, two challenges now define the path forward: durability and cost efficiency.

Robotaxis are expected to operate far more intensively than personal vehicles – up to 16 hours per day, often under demanding urban conditions. Sensor systems must not only offer unmatched perception but also last over hundreds of thousands of miles without degradation. That level of reliability demands both hardware and software resilience, and in turn, reshapes design and validation standards across the supply chain.

For robotaxis to become a widespread service, the full sensor suite and compute solutions must be affordable at scale. The affordability of advanced sensors will define which players can scale beyond pilot programs and reach viable unit economics. Goldman Sachs predicts that the cost of goods sold (COGS) per vehicle will decrease from $20,100 to $18,900 per year from 2025-2035.

Consumer Trust

With the current development of these sensors and autonomous-driving technologies, consumers are keen to see how driverless vehicles can reduce the number of collisions that occur due to human error, such as distracted driving. The autonomous-vehicle industry brings with it the vision of a zero-collision world, where vehicles are safer than human drivers. Consumers are willing to accept collisions that occur due to human error; however, a collision caused by a “robot” is unacceptable. Therefore, robotaxis will be required to operate with the highest level of safety to retain consumer confidence. 

Goldman Sachs research analysts believe robotaxis will be the earliest autonomous technology to be commercialized because consumers are becoming more confident and accepting of the technology. They believe revenue generated from robotaxis will have a significantly larger profit margin than current ride-hailing solutions because it isn’t dependent on a human driver and can operate all hours of the day and night.

Where We're Headed

Sensor technology has been the silent driver behind this transformation. As sensors grow more powerful, affordable and resilient, they are redefining what’s possible in autonomous mobility. The companies that can balance these trade-offs – safety, scale and sustainability – will shape the urban mobility landscape of tomorrow.

After a long wait in AV development, we are just starting to see L4 vehicles entering the market, transforming an era of mobility to a driverless reality. The race has officially begun to see which ride-hailing company takes the larger share of the market. But either way, we are entering what was once just a vision to a new way of navigating the roads.

About the Author