Autonomous vehicles (AVs) will likely fundamentally change the road freight and urban mobility sectors, as well as the truck and bus industries. While autonomous trucks and buses are likely to evolve differently given their environments—simpler, highly controllable environments such as hub-to-hub highways are easier to master than complex urban bus routes—industry players could act now to capture lucrative profit pools being created by the autonomous revolution.
AV trucking: For now, Europe trails the United States and China
While the United States and China are setting the pace in AV trucking, Europe is strategically preparing for a large-scale rollout after 2030. Industry experts expect commercial availability of driverless, on-highway, hub-to-hub applications in Europe by 2031, with full-journey autonomy outside the highway environment by 2034.
This timetable puts Europe three to four years behind the US market. China and the United States are in the lead because of a total cost of ownership (TCO) advantage, a robust AV player landscape, flexible regulatory sandboxes, and favorable geography. In the United States, for example, the straight, predictable highway corridors of the Sun Belt offer ideal, low-complexity routes suited for early-stage commercial deployment; Europe’s denser road networks and stringent legacy regulations limit such simple early use cases.
The upcoming United Nations Economic Commission for Europe WP.29 regulations, which introduce the first global framework for fully autonomous driving,1 will help, ultimately paving the way for a major European scale-up after 2030. Yet numerous factors will determine the pace and extent of AV adoption, including the following:
- Compelling economics. One of the value propositions for autonomous trucks is the potential reduction in TCO. This opportunity is particularly significant in the United States, where driver costs are higher and distances traveled are longer. Savings in the long-haul sector (greater than 2,000 kilometers) are expected to be as high as 20 percent by 2035 in the United States but only about 10 percent in Europe (Exhibit 1). However, our analysis finds that TCO parity is expected to occur around 2032.
- Ecosystem creation. Autonomous heavy-duty trucks in Europe have the potential to shift the industry’s focus from hardware sales to the high-margin software deployed in autonomous trucks, remote teleoperations, and predictive maintenance services. The entire value of AV truck deployment in Europe, including road freight forwarding and all services related to vehicle operations, could reach €100 billion by 2035 according to McKinsey analysis, assuming a 5 percent annual reduction in AV kit costs and addressable use cases that span hub-to-hub and point-to-point long-haul highway routes, avoiding complex urban edge cases. For comparison, the value potential in the United States is expected to be 1.5 times higher, given earlier market launches and larger vehicle fleets.
- Customer hesitation. Market interest is relatively low but growing, with 36 percent of fleet buyers expressing readiness to adopt AV trucks in a 2026 McKinsey survey, versus 25 percent in 2025. Buyers cite concerns over unclear legal liability, the lack of regulations, and limited exposure (Exhibit 2). A third of buyers also state their fleets are rarely in situations where they would benefit from autonomous driving,2 suggesting a need for OEMs and technology providers to demonstrate reliability through extensive pilot programs and transparent data sharing.
Potential steps to boost autonomous truck development
The investment required to develop a Level 4 (L4) autonomous-truck platform—which enables fully driverless operation within specific conditions—is significant and varies by use case (hub to hub versus point to point). For point-to-point applications, software investment is expected to be twice that of hub-to-hub investments, although it may narrow through emerging end-to-end (E2E) AI software development approaches that build software connecting hardware such as cameras, radar, and light detection and ranging (LiDAR).
McKinsey’s survey of AV leaders found 22 percent of respondents believe the E2E approach will dominate software development, along with rule-based and machine learning approaches.3 The E2E approach will require overcoming some challenges, notably regulatory and safety concerns, a lack of skilled talent, and limited corporate financing commitment.
Autonomous buses: Redefining urban mobility
Autonomous buses (ABs)4 are expected to become a major disruptive force in urban mobility, resolving critical driver shortages and transforming the economics and attractiveness of public transportation. Spanning both traditional fixed-route operations and new on-demand mobility offerings, the technology has the potential to trigger fundamental shifts in vehicle types, customers, and service models. Examples include the following:
- Solving the urban mobility crisis. With pilot programs now emerging, autonomous city buses are expected to become a significant force by about 2030.5 Driven by severe labor shortages (Germany alone faces a deficit of 80,000 bus drivers by 2030),6 ABs are emerging as an economic necessity, projected to capture 60 percent of the city bus market by 2045 (Exhibit 3). Our research also found about a third of bus operators are interested in adopting autonomous buses within the next five years—a share expected to nearly double over the following decade.
- Enabling smaller, more flexible fleets. Autonomy may shift demand toward smaller buses and earlier adoption by making smaller vehicles economically viable for mass transit. Autonomous technology allows cities to deploy smaller buses at higher frequencies and launch new routes despite lower demand. This shift may accelerate the adoption of both fixed-route and on-demand services, with smaller form factors expected to account for about 65 percent of the market by 2045, according to McKinsey analysis. Autonomy could also open the market to customer segments beyond traditional public transportation operators and authorities, and legacy OEMs could rapidly transition their service portfolios from pure-play hardware sales toward as-a-service offerings.
The transition to autonomous buses has the potential to generate a revenue pool of nearly €5 billion in Europe by 2035 (Exhibit 4). Value is expected to shift from vehicle sales to a broader ecosystem encompassing fleet operations, mobility platforms, and integrated as-a-service solutions, emphasizing the need for traditional OEMs to evolve from hardware manufacturers into integrated mobility providers.
Realizing the full benefits of AV trucks and buses in the early 2030s is likely to require players across the ecosystem to begin offering initial solutions for trials within the next two to three years. Capturing this first-mover advantage means companies should act quickly to define target vehicle form factors, determine an approach for integrating autonomous technology, detail the underlying business models, and develop a comprehensive go-to-market strategy. Incumbents and disruptors pursuing a clear, actionable road map have an opportunity to secure their leadership in the autonomous era.