Adoption of vehicles with partial to full automation is poised to accelerate in developed markets, jumping from 8% in 2024 to 28% by 2030, according to Morgan Stanley Research forecasts. “One in four cars sold globally may be equipped with smart-driving technology in five years, versus one in eight cars now,” says Tim Hsiao, who covers Greater China auto stocks at Morgan Stanley. This progress could create a market opportunity of $200 billion for automakers, hardware and software companies. By 2035, that figure could reach $300 billion to $400 billion. This transformation of the car industry means new sources of revenue coming from hardware and software. Initial revenue growth may stem from one-time hardware purchases and upgrades, which consist of vehicles and their components, including AI computing platforms, sensor systems and vehicle connectivity. The software used in smart-driving vehicles may require licensing, updates and services, bringing in another stream of revenue and profits. As driver-assistance systems can autonomously stop, steer, accelerate and change lanes in highways or in complicated urban traffic, humans will spend fewer hours on the wheel. “That free time can be reallocated to work activities, generating a potential productivity value of as much as $110 billion a year,” says Adam Jonas, who leads research on humanoids and embodied AI at Morgan Stanley