Bank of America's In-Depth Report on Autonomous Driving: Robotaxi Market Could Reach Trillion-Dollar Scale, $2 per Mile as Tipping Point

December 10 — Bank of America Global Research's latest report highlights that ride-hailing services currently account for just 1% of the 3 trillion annual vehicle miles traveled in the U.S. This explains why tech giants like Tesla Motors' Robotaxi, Google's Waymo, and Amazon's Zoox are aggressively entering the market.

Analyst Justin Post estimates that if autonomous driving technology reduces per-mile costs to $1.5–$2.0—close to private vehicle ownership costs—and achieves 20% market penetration within 15 years, the sector could reach $0.9–$1.2 trillion in value.

Currently, U.S. ride-hailing costs average $2.5–$3.0 per mile, while private vehicle ownership costs $0.70–$1.06 per mile. This gap limits adoption. Bank of America identifies sub-$2.00 per mile as the critical threshold for mass adoption of autonomous ride-hailing.

Profitability debates center on three business models: ownership, leasing, and agency. For Uber, even if its U.S. market share drops from 70–80% to 50%, order volume could hit $589 billion by 2040, driven by market expansion and a 17% CAGR.

**Trillion-Dollar Potential: From 1% to 20% Penetration** U.S. vehicles logged ~3.3 trillion miles in the 12 months through July 2025, with passenger cars accounting for ~3 trillion miles (excluding heavy trucks). Ride-hailing's 1% penetration reflects untapped potential.

Autonomous technology is key to bridging the cost gap. Private vehicle ownership costs $0.70–$1.06 per mile (fuel, maintenance, insurance, depreciation), while ride-hailing costs 2–3x more. At sub-$2.00 per mile, consumers may prioritize convenience over ownership.

Bank of America projects 20% penetration at $1.5–$2.0 per mile could unlock $0.9–$1.2 trillion in revenue, factoring in expanded accessibility and potential mileage growth.

**Cost Advantages: China’s AV Leaders** The report highlights cost efficiencies from Chinese AV platforms: - Baidu Apollo’s 6th-gen AV costs $28,000 vs. BofA’s $75,000 benchmark. - Pony.ai targets unit breakeven by 2025, with 70% lower 7th-gen vehicle costs and 18% lower insurance. - WeRide estimates 67% margins for U.S. operations.

**Profitability Models: Ownership, Leasing, Agency** - **Ownership**: Requires $1.95/mile at $75k/vehicle (72% utilization). Drops to $1.53/mile at $45k/vehicle. - **Leasing**: Needs $2.08/mile ($0.54/mile lease fee). Falls to $1.65/mile with cheaper vehicles. - **Agency**: Demands $2.15/mile ($1.50/mile payout to OEMs). Reduces to $1.68/mile at lower costs.

Key assumptions: AVs drive 75k miles/year, 300k-mile lifespan, $0.20/mile insurance (vs. $0.40 currently), and 3 miles/kWh. Base-case annual profit/vehicle reaches $24k (pre-marketing/overhead).

**Market Share Risks: Uber’s Fight for 50%** Uber’s 70–80% U.S. share faces pressure from Waymo, Tesla Motors, and Zoox. Scenarios: - **Base case**: 50% share → $589B orders by 2040 (17% CAGR). - **Pessimistic**: 30% share → $353B (13% CAGR). - **Optimistic**: 70% share → $825B (20% CAGR).

Network effects may limit U.S. players to 3–4, sustaining margins. California data shows Waymo’s orders grew 192% YoY in Q3 2025, while Lyft reported 5x faster growth in AV-enabled markets.

**Price War Risks** - **Waymo’s lead**: Expanding in Houston, Dallas, Miami vs. Uber’s limited AV partnerships. - **Cost pressure**: Tesla Motors targets $30k AVs; Zoox designs low-cost driverless pods. - **Deep-pocket rivals**: Waymo, Zoox, and Tesla Motors could undercut prices to gain share, forcing Uber into unsustainable competition.