Autonomous driving: Why the big breakthrough is missing despite enormous investments

For more than a decade, Tesla and its partners have been promising a mobility revolution through self-driving cars – and investing billions. What's going wrong?

Autonomous driving is set to revolutionize last-mile mobility in cities. It's been talked about for more than ten years, and companies have invested billions. Despite all the positive news, the question remains whether promises are still being made too high for PR reasons. Waymo, a subsidiary of Alphabet, is considered a pioneer and, according to recent reports, plans to deploy 2,000 new robotaxis by 2026. Mercedes and BMW are also working hard to further develop autonomous driving functions for premium vehicles. In the USA, Tesla is pursuing an aggressive strategy and consistently promises high promises with its "Full Self Driving" system – but so far, the results have fallen short of expectations.

The reality is more complex than many investors would like. The spectacular difficulties at Cruise, General Motors' former hope in the field of autonomous taxis, illustrate the wide gap between aspiration and reality. After several serious incidents and regulatory problems, Cruise was forced to abandon its ambitions. Such incidents put pressure on the entire industry and cause investors to become increasingly impatient.

The situation in China is particularly exciting and challenging at the same time. Companies like BYD and Xiaomi are investing heavily in autonomous technologies and have so far benefited from less restrictive regulations. However, China recently significantly tightened regulations following a number of accidents. The regulatory hurdle for autonomous vehicles has been raised, posing new challenges, especially for startups and technology-driven companies like Xiaomi. China is trying to steer the growth of autonomous vehicles in safer directions, which could build confidence on the one hand, but also slow innovation on the other.

Another area of ​​tension is the high financial requirements. The costs of developing autonomous systems have risen dramatically, and profitable business models are still lacking. Waymo's taxi rides have so far been purely a subsidized business, and investors are growing impatient. The billions invested in research, technology development, and infrastructure are expected to yield results soon. But the reality shows that there is still a long way to go before autonomous vehicles can be deployed on a large scale and safely.

The technology continues to grapple with fundamental challenges. AI systems must be able to safely handle complex and unpredictable traffic situations at all times – and with virtually zero error rates. Accidents like the one involving Cruise or the sometimes erratic behavior of Tesla's systems demonstrate that autonomous systems have not yet provided the required reliability. Such problems increase the pressure on companies to formulate their promises more realistically.

The growing capabilities of artificial intelligence systems don't help much either. While data can be analyzed more easily and quickly with AI, AI is still unable to safely drive a vehicle. The use of autonomous vehicles in adverse weather conditions is also unclear. While the sensors can be heated during snowfall, even that's often insufficient for highway driving, where cold wind and slush ice over the sensors.

It's now clear that autonomous driving must overcome not only technological but also regulatory, economic, and societal challenges. The immense financial pressure from high investments is offset by a technology that, while making impressive progress, still carries significant risks. Whether it will be Waymo, Tesla, Mercedes, BMW, or a Chinese company like BYD or Xiaomi that ultimately achieves the breakthrough remains to be seen. One thing is clear, however: the road to truly autonomous driving remains rocky—and more expensive than many investors had hoped.

Don Dahlmann has been a journalist for over 25 years and has worked in the automotive industry for over ten. Every Monday, you can read his column "Torque," which takes a critical look at the mobility industry.