• AEVs go mainstream as new AI models cut costs and deployment times
• Waymo expands to 27 US cities while China’s fleet reaches comparable scale
• Vision-language-action technology compresses city launch times from years to months
Autonomous electric vehicles (AEVs) are set for a global commercial breakout in the Transport-as-a-Service (TaaS) sector in 2026, with operations or testing expected in 39 markets by year-end, according to Wood Mackenzie’s latest AEV outlook.
The sector is transitioning from a testing” phase to a mainstream with capital-intensive scaling phase. Despite macroeconomic headwinds, AEV technology has reached a tipping point, underpinned by a surge in funding which reached US$18 billion in 2025.
“The AEV market is at an inflection point,” said David Brown, Director of Integrated Energy Research at Wood Mackenzie. “New AI technologies are fundamentally transforming the economics of deployment. As launch timelines compress and costs decline, we are seeing the sector move from pilot projects to commercial scale operations across multiple markets simultaneously.”
AEVs go mainstream as VLA models unlock faster adoption
New Vision-Language-Action (VLA) AI models will accelerate global fleet expansion in 2026. By shifting from traditional rule-based models and high-definition (HD) mapping to camera-and-video perception, VLA technology compresses city launches times from nearly two years to just several months.
Tesla, Waymo, Apollo Go, and Xpeng all embraced VLA in late 2025 and will scale its application this year. This shift allows AEVs to substitute expensive rotational LiDAR with lower-cost solid-state sensors and high-dynamic-range cameras. By embracing this technology, Waymo expects to deliver one million rides per week globally by the end of 2026, a massive jump from one million rides per month in 2025.
Waymo leads US expansion while Chinese firms dominate supply chains
Waymo’s expansion from 5 to 27 US cities in 2026 is underpinned by a new, lower-cost vehicle platform and strategic partnerships with Uber and Avis Budget Group. Meanwhile, China remains the only peer to the US market in terms of scale.
Apollo Go, Pony.ai, and WeRide have also announced plans to scale in Beijing, Shanghai, Guangzhou, Wuhan, and Shenzhen. In 2026, China’s 15th Five-Year Plan will likely introduce new goals for the AEV supply chain, focusing on Level 4 standards and data centre infrastructure. Much like its solar and battery sectors, China is expected to begin exporting its AEV technology globally this year.
AEV pilots gather pace in Europe and the Middle East
London’s complex road network will be a key testing ground for the adoption of AEVs in Europe, with Waymo, Baidu, and Wayve each set to launch pilot programs in 2026. Additionally, TaaS providers across Europe are increasingly leveraging China’s cost-effective technology for their pilot programs in the Netherlands, Germany, and France.
In the Middle East, the United Arab Emirates (UAE) is emerging as a leader. Currently, approximately 130 AEVs are being tested across the Emirates. Companies such as Baidu and WeRide are aiming to expand their fleets to 1,000 vehicles by the end of the year. This progress aligns with the UAE’s ambitious Vision 2030 goal of making 25% of all transportation autonomous.
AEV growth supports global electrification and infrastructure
According to Wood Mackenzie’s latest analysis, global AEV sales are expected to expand tenfold from 2026 to 2030. In the US alone, the TaaS fleet will add 100,000 vehicles during this period. This growth will have a multiplier effect on the energy sector:
· Charging Infrastructure: Higher sales will buttress investments in specialized high-speed charging networks.
· Power Demand: AEV operations will increasingly underpin data centre expansions required for autonomous training.
· Commodity Impact: While still a small portion of the power sector in 2026, AEVs could have a significantly larger impact on commodity markets under Wood Mackenzie’s high-case scenario.
