Development Autonomous Mobility: Europe Is Hesitant

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Robotaxis are commonplace in the USA and China, while European manufacturers remain at level 2. Although more research is being carried out in Europe, there is a lack of money and courage.

Waymo carries out more than 250,000 rides per week in five US cities Apollo Go in China recorded over eleven million journeys between September 2020 and mid-2025. By contrast, the fleets in Hamburg and Frankfurt usually comprise fewer than 20 vehicles. Europe is lagging far behind when it comes to autonomous driving, according to a recent publication from the "Lab for Smart Mobility" by PwC Germany and the Institute for Mobility at the University of St. Gallen.

"The potential of shared autonomous vehicles for safety, climate protection and more inclusive mobility is enormous," says Harald Wimmer, Partner and Global & German Automotive Leader at PwC Germany. "Now is the time to realize it - with capital, regulatory clarity and viable cooperation models."

Four Hurdles Slow Down the Ramp-Up

The authors of the study identified four main obstacles to the introduction of robotaxis in Germany:

• Technically, the software is not yet fully adapted to vehicles such as Robobuses.
• In regulatory terms, fragmented approval processes slow down scaling.
• In economic terms, suppliers face a chicken-and-egg problem: without large quantities, costs remain high.
• Organizationally, unclear role allocations delay development.

According to PwC, the economic prospects are nevertheless promising. For buses, up to 67 percent less subsidies would be required in 2035 than today. For robotaxis, the costs per kilometer would be between 50 and 70 percent lower than today's cab costs, depending on the scenario.

The pressure to act is enormous. According to the "Robo-Bus-Radar 2025" by PwC Germany, there is already a shortage of around 20,000 drivers in bus transportation. Another 30,000 will reach retirement age by 2030. At the same time, 32% of people in Germany feel left behind by public transport - with an above-average number in rural areas.

But instead of investing in Level 4, most European manufacturers are sticking with Level 2. There is a reason for this reluctance: advanced assistance systems such as BMW's freeway assistant for the i7 cost a one-off €990 ($1,140) and work up to 130 km/h (81 mph) - "hands off, eyes on". Ford's "Bluecruise", which costs a one-off €1,500 ($1,740), is now registered in 16 European markets. According to the manufacturer, Ford users worldwide have driven over 888 million kilometers (551 million miles) on the highway with it.

Level 3 systems such as the Drive Pilot for the Mercedes S-Class, on the other hand, cost 6,000 euros ($6,949) - with massive restrictions: Rain, fog, snow and roadworks are exclusion criteria, and the maximum speed is 95 km/h (59 mph). It is now clear that Mercedes will revert to Level 2+ for the revised S-Class.

"With increasing level 2 functionality, driver monitoring also increases for safety reasons", said Frank Weber, former Board Member for Development at BMW, to "Automobil Industrie" at the beginning of 2025. "That's why there is also a natural limit to level 2 systems."

But pushing this limit is obviously more attractive than making the leap to level 3 or 4: level 2 systems generate revenue without excessive liability risk.

Stellantis Stops Level 3 Project

The change in strategy at Stellantis is particularly revealing. In August 2025, it was announced that the Group had halted its internal projects for automated cars. Specifically, this concerned the level 3 system "STLA AutoDrive". "The current market for level 3 autonomous driving is very limited," a spokesperson told the news agency Reuters. The system has been fully developed - but will be postponed indefinitely.

Automated Driving Services

Europe Seeks Investors for Robotaxis

Instead, Stellantis is focusing on robotaxis for fleet operators. In mid-October 2025, the Group and Pony.ai signed a letter of intent for Level 4 robotaxis based on the Peugeot E-Traveller. The Chinese company specializes in automated driving systems. Initial tests in Luxembourg are due to start soon.

The next announcement followed at the end of October: Stellantis is working with Nvidia, Foxconn and Uber on 5,000 robotaxis for the USA - with production starting in 2028. The message is clear: autonomous driving yes, but for fleet operators, not for private buyers.

Capital Flows Out of Germany

What is striking is that it is primarily companies from China and the USA that are driving automated driving services forward. They are securing access to thousands of vehicles. Zeekr and Hyundai are to supply Waymo, while Uber is relying on Stellantis. Holon is to supply the US ride-hailing service Lyft from 2026 - production is currently being set up in Jacksonville, Florida.

McKinsey puts global investment in the ACES sector - Autonomous, Connected, Electric, Shared - at 860 billion US dollars since 2010. 93 percent of this money does not come from the automotive industry, but from venture capital companies and tech groups - primarily from the USA and China.

According to a report in Manager Magazin, VW subsidiary Moia is also looking for investors. Group CEO Oliver Blume is planning a capital increase to involve minority shareholders.

Germany: Pilots Yes, Production No

Intensive testing is underway in Germany. VW subsidiary Moia demonstrated the functionality of its complete automated driving system in an ID Buzz AD in Hamburg in the summer. Public tests are scheduled to begin by 2027 at the latest. Benteler subsidiary Holon received a test license for its "urban" electric shuttle from the German Federal Motor Transport Authority in mid-November.

In the "KIRA" project, autonomous vehicles have been driving at level 4 with passengers for the first time in Germany since May - at speeds of up to 130 km/h (81 mph). Over 1,000 users are registered in parts of the city of Darmstadt and in the western area of the Offenbach district.

According to PwC, more than 15 projects with a total volume of almost a quarter of a billion euros are currently underway across Germany. The frontrunners are Bavaria, Baden-Württemberg and Hesse and the cities of Munich, Ulm and Hamburg. 62 percent of the costs are being borne by the federal and state governments with subsidies.

But Europe's car industry is not getting beyond the research stage. While pilot projects are underway, production is migrating. Holon builds in the USA, Stellantis delivers to China and the USA. Transport companies in Germany are showing keen interest - but are not yet active as paying customers.

Lack of Capital for Market Ramp-Up

The race for robotaxis has been decided. While Waymo and Baidu Apollo carry out several hundred thousand commercial journeys every week, German providers do not play a relevant role, according to the Center of Automotive Management in its latest study "Connected Car Innovation - CCI 2025".

"There is a real danger that autonomous cabs from foreign manufacturers with software from the USA or China will be on German roads via foreign mobility platforms," warns Stefan Bratzel, head of the study. There is a lack of capital for the market ramp-up.