In this paper, we explore the trade-offs between public and private investment in autonomous driving technologies. Utilizing an evolutionary game model, we delve into the complex interaction mechanisms between governments and auto manufacturers, focusing on how strategic decisions impact overall outcomes. Specifically, we predict that governments may opt for strategies such as constructing and maintaining infrastructure for Roadside Infrastructure-based Vehicles (RIVs) or subsidizing high-level Autonomous Driving Vehicles (ADVs) without additional road infrastructure. Manufacturers’ choices involve deciding whether to invest in RIVs or ADVs, depending on governmental policies and market conditions. Our simulation results, based on scenarios derived from existing economic data and forecasts on technology development costs, suggest that government subsidy policies need to dynamically adjust in response to manufacturers’ shifting strategies and market behavior. This dynamic adjustment is crucial as it addresses the evolving economic environment and technological advancements, ensuring that subsidies effectively incentivize the desired outcomes in autonomous vehicle development. The findings of this paper could serve as valuable decision-making tools for governments and auto manufacturers, guiding investment strategies that align with the dynamic landscape of autonomous driving technology.