"This Year Will Mark the Inaugural Year for Level 3 Autonomous Driving Commercialization"

Korea Automobile Research Institute's "Global Automotive Industry Issues" Report
"Overall Industry Order Rapidly Shifting"
NVIDIA vs. Tesla... Industry at a Turning Point

The Korea Automobile Research Institute has analyzed that, as commercial competition between alliance-based and closed camps intensifies in the autonomous driving sector, 2026 will mark the inaugural year for the commercialization of Level 3 autonomous driving.

On February 2, the Korea Automobile Research Institute diagnosed in its report, "Global Automotive Industry Issues to Watch in 2026," that the global automotive industry has entered a structural turning point in 2026.

The institute analyzed that the intensifying US-China technological hegemony competition, the reorganization of trade order centered on domestic interests, the divergence of eco-friendly policies by country, and the rapid advancement of artificial intelligence (AI) and robotics technologies are simultaneously converging, causing the overall order of the industry to be rapidly shaken.

On the 8th (local time), the autonomous robot taxi 'Zoox' was moving in downtown Las Vegas, Nevada, USA. Photo by Yonhap News

Amid these changes, the institute identified five key automotive industry issues to watch this year: ▲autonomous driving and robotics ▲eco-friendly powertrains ▲software-defined vehicles (SDV) and user experience (UX) ▲dynamics of the finished vehicle market ▲global core parts supply.

In particular, the institute predicted that this year, as AI-based end-to-end (E2E) technology becomes established in autonomous driving, a strategic competition structure will form between alliance-based and closed camps, making 2026 the inaugural year for the commercialization of Level 3 (conditional autonomous driving) where the driver must remain in the driver’s seat. E2E refers to a method in which AI learns driving data in its entirety and processes judgment and control simultaneously.

NVIDIA stands at the center of the alliance-based camp. Earlier this year, NVIDIA unveiled its autonomous driving platform "Alphamayo" at CES 2026, the largest IT exhibition in the United States. Alphamayo is characterized by its ability to perceive and infer its surroundings in a manner similar to humans. Partnerships with major tech companies such as Google, Amazon, and OpenAI play a significant role. It is known that Jensen Huang, CEO of NVIDIA, also held a private meeting with Chung Euisun, Chairman of Hyundai Motor Group.

At the recent CES, CEO Huang, while presenting autonomous driving technology, also drew comparisons to Tesla. He stated, "Tesla's Full Self-Driving (FSD) technology is world-class," but emphasized, "NVIDIA does not manufacture vehicles directly but instead builds technology for other companies," signaling intensifying competition in the autonomous driving market.

Jensen Huang, CEO of NVIDIA, is delivering the keynote speech at the NVIDIA CES 2026 Live held on the 5th (local time) at the Fontainebleau Hotel in Las Vegas, Nevada, USA. Photo by Yonhap News

In contrast, Tesla, which focuses on vertically integrating key businesses such as electric vehicles, robotics, and autonomous driving, represents the closed camp. Except for industries like batteries, where foreign companies have significant influence, Tesla is responsible for every aspect of its products from start to finish. Collaboration with other major tech companies is relatively less important.

The institute noted, "Given the significant gap in the volume of driving data held by companies, which is key to E2E, some latecomer companies aiming for technological breakthroughs will join the big tech alliances, and strategic competition between alliance-based and closed camps will surface."

Additionally, the institute analyzed that, in the field of robotics, while automotive companies are actively entering the market, skepticism may arise due to economic viability issues. In the vehicle powertrain sector, attention is expected to shift more toward hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and extended-range electric vehicles (EREVs), rather than purely battery electric vehicles (BEVs).

In the finished vehicle market, the report observed that decoupling between the United States, Europe, and China is expected to intensify. In the United States, automakers are targeting the premium market, while some companies are expected to pursue niche strategies in the mass-market segment. In Europe, plans by local companies to launch small electric vehicles are drawing attention, and in the Chinese market, quality and brand management are emerging as key topics.

Geopolitical tensions are also a core risk. Regarding the supply of secondary battery materials and rare earth elements, to which China has a high degree of control, the institute analyzed, "Due to heightened geopolitical tensions, supply chain risks will persist for several years." While the United States and Europe are working to establish alternative supply chains, the institute judged that it is difficult to expect tangible results in the short term.

This content was produced with the assistance of AI translation services.