A true driverless car -- one that will give you a no-hands experience from door to door -- is not going to be seen in dealer showrooms for another decade or two.
But for suppliers, the payoff is right now.
By 2020, vehicles that can accelerate, brake and steer themselves will generate additional annual sales of $20 billion to $25 billion worth of sensors and software, according to a study released June 30 by AlixPartners.
AlixPartners based that forecast on market surveys published this year by two consulting firms, Dolcera and IHS Automotive.
Annual software revenues from the sale of navigation maps, collision-avoidance programs and other features will range from $10 billion to $15 billion, predicts Dolcera, of San Mateo, California.
Meanwhile, sales of vehicle cameras, radar, ultrasonic sensors and lidar will generate an estimated $9.9 billion in annual revenues, according to IHS Automotive, of Detroit.
"It's not a mature market yet," said Mark Wakefield, a managing director at AlixPartners who co-authored the report. "The "take rate' is still going up, and it's well above the market growth of vehicles."
Radar, cameras and ultrasonic sensors each have established markets, but lidar is just starting to attract automaker attention. By 2020, lidar will generate annual sales of $185 million -- barely a drop in the bucket by comparison to the other rapidly emerging technologies.
This week ZF Friedrichshafen CEO Stefan Sommer said self-driving cars will need multiple detection systems including lidar if they are to be safe at high speeds.
His remarks came following news that a 2015 Tesla Model S crashed into a trailer while in so-called "autopilot" mode. Tesla has said it was hard for the car's cameras to identify the white trailer against a bright Florida sky.
Sommer told a news conference that cameras relying on visual signals alone were insufficient for safe autonomous driving at high speed.
But lidar -- a vision technology that uses light from a laser to track the distance of objects -- is likely to enjoy growing demand as suppliers cut costs and shrink the hardware package. Several of the industry's largest suppliers, including Continental, Robert Bosch, Valeo, Autoliv, Delphi and Denso, are developing lidar products.
While those suppliers are familiar names to the auto industry, Silicon Valley companies are poised to dominate the market for vehicle software.
"I think Google is probably in the best position," Wakefield said. "And Mobileye is hot and heavy in this space," he added, referring to the fast-growing supplier of obstacle-detection software.
Meanwhile, automakers and traditional suppliers are frantically hiring software engineers to keep pace with newer Silicon Valley automotive competitors, which are accustomed to the one-year cycle of consumer electronics.
"This is really where the automakers and traditional suppliers are furthest behind," Wakefield said. "They have to shift their work force and their capital expenditures."
The ranks of technology suppliers will be evolving at an inopportune time for the industry, according to the AlixPartners report. It forecasts that 2016 will be the end of the current U.S. auto sales boom.
According to the report, U.S. sales will top out this year at 17.8 million new light vehicles, ahead of 2015's 17.47 million sales.
It forecasts that 2017 will begin a cycle of lower sales, bottoming out in 2019 at 15.2 million.
