Modern automatic transmissions can trace their origins to an early "horseless carriage" gearbox that was developed in 1904 by the Sturtevant brothers of Boston, Massachusetts. This unit had two forward speeds, the ratio change being brought about by flyweights that were driven by the engine. At higher engine speeds, high gear was engaged. As the vehicle slowed down and engine RPM decreased, the gearbox would shift back to low. Unfortunately, the metallurgy of the time wasn't up to the task, and owing to the abruptness of the gear change, the transmission would often fail without warning.
One of the key developments in arriving at an automatic transmission was the use of planetary transmission in the vehicle's gearbox. Probably the first use of which was in the Wilson-Pilcher made between 1900 and 1907. The Wilson-Pilcher used two epicyclic gear trains allowing 4 forward gears to be selected by moving a single gear change lever. In this form of gearbox the planetary gears are in constant mesh, and all that is required is to use a mechanism to fix or release the rotation of the outer gear ring. The action of the gear change lever mechanically locked or freed the outer ring of each epicyclic gear by an internal brake/clutch. The vehicle also had a separate cone clutch operated by a foot pedal which could be latched in position to run the engine when stationary, e.g. for starting. Like more modern automatic transmissions the gears were helical to reduce noise, and were sealed inside an oil-filled gearbox. There are no reports of the manufacturer seeking to automate the changing of the gears, though the design eliminated the requirement for using the foot clutch except when starting or stopping.
A better known car that also used planetary transmission was Henry Ford's Model T of 1908. The Model T, in addition to being cheap and reliable by the standards of the day, featured a simple, two speed plus reverse planetary transmission using straight cut gears whose operation was manually controlled by the driver using pedals. The pedals actuated the transmission's friction elements (bands and clutches) to select the desired gear. In some respects, this type of transmission was less demanding of the driver's skills than the contemporary, unsynchronized manual transmission, but still required that the driver know when to make a shift, as well as how to get the car off to a smooth start.
The first automatic transmission using hydraulic fluid was developed in 1932 by two Brazilian engineers, José Braz Araripe and Fernando Lehly Lemos;
Later, the prototype and the project were sold to General Motors, who introduced the technology in the 1940 Oldsmobile model as a "Hydra-Matic" transmission. However, an article published by the Wall Street Journal credits the German auto parts company ZF Friedrichshafen for the invention, which would have occurred shortly after World War I.
In 1934, both REO and General Motors developed semi-automatic transmissions that were less difficult to operate than a fully manual unit. These designs, however, continued to use a clutch to engage the engine with the transmission. The General Motors unit, dubbed the "Automatic Safety Transmission", was notable in that it employed a power-shifting planetary gearbox that was hydraulically controlled and was sensitive to road speed, anticipating future development.
Parallel to the development in the 1930s of an automatically shifting gearbox was Chrysler's work on adapting the fluid coupling to automotive use. Invented early in the 20th century, the fluid coupling was the answer to the question of how to avoid stalling the engine when the vehicle was stopped with the transmission in gear. Chrysler itself never used the fluid coupling with any of its automatic transmissions, but did use it in conjunction with a hybrid manual transmission called "Fluid Drive" (the similar Hy-Drive used a torque converter). These developments in automatic gearbox and fluid coupling technology eventually culminated in the introduction in 1939 of the General Motors Hydra-Matic, the world's first mass-produced automatic transmission.
Available as an option on 1940 Oldsmobiles and later Cadillacs, the Hydra-Matic combined a fluid coupling with three hydraulically controlled planetary gearsets to produce four forward speeds plus reverse. The transmission was sensitive to engine throttle position and road speed, producing fully automatic up- and down-shifting that varied according to operating conditions.
The Hydra-Matic was subsequently adopted by Cadillac and Pontiac, and was sold to various other automakers, including Bentley, Hudson, Kaiser, Nash, and Rolls-Royce. It also found use during World War II in some military vehicles. From 1950 to 1954, Lincoln cars were also available with the Hydra-Matic. Mercedes-Benz subsequently devised a four-speed fluid coupling transmission that was similar in principle to the Hydra-Matic, but of a different design.
The original Hydra-Matic incorporated two features which are widely emulated in today's transmissions. The Hydra-Matic's ratio spread through the four gears produced excellent "step-off" and acceleration in first, good spacing of intermediate gears, and the effect of an overdrive in fourth, by virtue of the low numerical rear axle ratio used in the vehicles of the time. In addition, in third and fourth gear, the fluid coupling only handled a portion of the engine's torque, resulting in a high degree of efficiency. In this respect, the transmission's behavior was similar to modern units incorporating a lock-up torque converter.
In 1956, GM introduced the "Jetaway" Hydra-Matic, which was different in design than the older model. Addressing the issue of shift quality, which was an ongoing problem with the original Hydra-Matic, the new transmission utilized two fluid couplings, the primary one that linked the transmission to the engine, and a secondary one that replaced the clutch assembly that controlled the forward gearset in the original. The result was much smoother shifting, especially from first to second gear, but with a loss in efficiency and an increase in complexity. Another innovation for this new style Hydra-Matic was the appearance of a Park position on the selector. The original Hydra-Matic, which continued in production until the mid-1960s, still used the reverse position for parking pawl engagement.
The first torque converter automatic, Buick's Dynaflow, was introduced for the 1948 model year. It was followed by Packard's Ultramatic in mid-1949 and Chevrolet's Powerglide for the 1950 model year. Each of these transmissions had only two forward speeds, relying on the converter for additional torque multiplication. In the early 1950s, BorgWarner developed a series of three-speed torque converter automatics for American Motors, Ford Motor Company, Studebaker, and several other manufacturers in the US and other countries. Chrysler was late in developing its own true automatic, introducing the two-speed torque converter PowerFlite in 1953, and the three-speed TorqueFlite in 1956. The latter was the first to utilize the Simpson compound planetary gearset.
General Motors produced multiple-turbine torque converters from 1954 to 1961. These included the Twin-Turbine Dynaflow and the triple-turbine Turboglide transmissions. The shifting took place in the torque converter, rather than through pressure valves and changes in planetary gear connections. Each turbine was connected to the drive shaft through a different gear train. These phased from one ratio to another according to demand, rather than shifting. The Turboglide actually had two speed ratios in reverse, with one of the turbines rotating backwards.
By the late 1960s, most of the fluid-coupling four-speed and two-speed transmissions had disappeared in favor of three-speed units with torque converters. Also around this time, whale oil was removed from automatic transmission fluid. By the early 1980s, these were being supplemented and eventually replaced by overdrive-equipped transmissions providing four or more forward speeds. Many transmissions also adopted the lock-up torque converter (a mechanical clutch locking the torque converter pump and turbine together to eliminate slip at cruising speed) to improve fuel economy.
As computerized engine control units (ECUs) became more capable, much of the logic built into the transmission's valve body was offloaded to the ECU. Some manufacturers use a separate computer dedicated to the transmission called a transmission control unit (TCU), also known as the transmission control module (TCM), which shares information with the engine management computer. In this case, solenoids turned on and off by the computer control shift patterns and gear ratios, rather than the spring-loaded valves in the valve body. This allows for more precise control of shift points, shift quality, lower shift times, and (on some newer cars) semi-automatic control, where the driver tells the computer when to shift. The result is an impressive combination of efficiency and smoothness. Some computers even identify the driver's style and adapt to best suit it.
ZF Friedrichshafen and BMW were responsible for introducing the first six-speed (the ZF 6HP26 in the 2002 BMW 7 Series (E65)). Mercedes-Benz's 7G-Tronic was the first seven-speed in 2003, with Toyota introducing an eight-speed in 2007 on the Lexus LS 460 which was equivalent in size to a six-speed . Derived from the 7G-Tronic, Mercedes-Benz unveiled a semi-automatic transmission with the torque converter replaced with a wet multi clutch called the AMG SPEEDSHIFT MCT. The 2014 Jeep Cherokee has the world's first nine-speed automatic transmission for a passenger vehicle to market. In 2017 Toyota unveiled the Lexus LC coupe with the world’s first ten-speed automatic transmission in a production car. General Motors and Ford followed soon after with their co-developed ten-speed automatic transmission for the Cadillac Escalade, Cadillac CT6, Chevrolet Camaro, Chevrolet Tahoe models for GM and the Ford Mustang, Ford F-150, Lincoln Navigator, Ford Ranger (T6) and Ford Everest models for Ford.