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A04284 | Pages: 233 | Charts: 49 | Tables: 150 |
The global automotive artificial intelligence market size was valued at $13.8 billion in 2022, and is projected to reach $405.3 billion by 2032, growing at a CAGR of 40.7% from 2023 to 2032.
Automotive artificial intelligence refers to the implementation of AI technology in vehicles to increase several aspects of the automobile system, including efficiency, safety, convenience, and to improve the overall vehicle driving experience. The automotive industry has witnessed the potential of AI and is among the major industries utilizing AI technologies to augment and mimic human actions. Furthermore, with the emergence of modern automobile functions such as advanced driver assistance system (ADAS), adaptive cruise control (ACC), blind spot alert, autonomous driving, predictive maintenance, intelligent traffic management, and growth in demand for convenience features attract automotive manufacturers toward implementation of AI in automobiles.
The expansion of automotive artificial intelligence market is driven by increase in demand for autonomous vehicles, growth in high-speed internet & 5G technology, and rise in demand for enhanced user experience & convenient features. However, rise in security and privacy concerns and stringent regulatory landscape are anticipated to hinder the market growth. Furthermore, increase in demand for premium vehicles and growth in connected vehicle technology are anticipated to provide lucrative growth opportunity for the market during the forecast period.
In recent years, autonomous vehicles have gained popularity due to various features such as automatic parking, self-driving, autopilot, and others features. Autonomous vehicles minimize human effort while driving. Furthermore, global companies such as Nvidia Corporation, Intel Corporation, and Tesla, Inc., have been investing more in the development of autonomous vehicle technology in recent years.
For instance, on December 16, 2021, Intel Corporation, subsidiary of Mobileye Global Inc., announced they have acquired testing permit for their autonomous driving taxi in Paris. Mobileye Global Inc. collaborated with RATP Group, the world’s third largest public transportation operator company. The company is expected to use Mobile AV test vehicles, which transport two passengers at a time. The collaboration is expected to provide a crucial testing ground to create autonomous driving services that are secure, convenient, and can be implemented globally.
Similarly, Tesla, Inc. autopilot system has features such as keeping the vehicle within a lane while driving, auto changing the lanes whenever required and self-parking, which is one of the most advanced systems available in the market. Moreover, autonomous vehicles are anticipated to reduce human intervention and are of vital importance in industries that have a shortage of manpower especially in the transportation and logistics industry. This, in turn, is expected to drive the growth of the automotive artificial intelligence market.
The leading companies have adopted strategies such as acquisition, agreement, expansion, partnership, contracts, and product launch to strengthen their market position.
The automotive artificial intelligence market is segmented on the basis of component, technology, application, and region. By component, the global market is divided into hardware, software, and services. On the basis of technology, the automotive artificial intelligence industry has been segregated into machine learning & deep learning, computer vision, natural language processing, and others. On the basis of application, the market is classified into semi-autonomous and autonomous. By region, the market is analyzed across North America, Europe, Asia-Pacific and Latin America and Middle East and Africa.
On the basis of component, the automobile artificial intelligence market has been segregated into hardware, software, and services. The hardware segment accounted for the largest market share in 2022. The hardware segment is one of the most crucial for the automotive artificial intelligence industry, and it is the basic requirement to implement artificial intelligence technology in automobiles. However, the software segment is anticipated to witness the strongest growth rate due to increasing use of AI powered software in various applications of automobile such as speech recognition, image recognition, data analysis, and motion detection.
[COMPONENTGRAPH]
By technology, the automobile AI market is classified into machine learning & deep learning, computer vision, natural language processing, and others. The machine learning & deep learning segment accounted for the largest market share in 2022, owing to the increased use of machine learning and deep learning in the development of autonomous vehicles; this technology is used to discover relevant patterns in data and further analyze and make decisions and predictions. However, the natural language processing segment is anticipated to witness the highest growth rate due to increased use of this technology in extracting meanings and generating human-readable text from the data moreover, there has been increasing use of the technology in voice and speech recognition to convert data in human-readable formats.
[TECHNOLOGYGRAPH]
On the basis of the application, the automotive AI market has been bifurcated into semi-autonomous and autonomous segments. The semi-autonomous segment accounted for the largest market share in 2022 due to cost-effective nature of semi-autonomous vehicles, making them a more affordable option for manufacturers and consumers. However, the autonomous segment is anticipated to register the highest growth rate due to an increase in technological advancement and rise in R&D initiatives for the development of autonomous vehicle technology. In addition, autonomous vehicles reduce the potential of human error and make them safer and more efficient.
[APPLICATIONGRAPH]
On the basis of region, the automotive artificial intelligence market growth has been analyzed across North America, Europe, Asia-Pacific, Latin America and Middle East and Africa. North America accounted for the largest market share in 2022, owing to increase in presence of AI system developers in the region. Furthermore, the region has witnessed an increase in demand for artificial intelligence in automobiles, surge in the level of vehicle automation, availability of high-end infrastructure, and the emergence of Internet of Things (IoT) technology. The North American region has witnessed a rise in investments by automobile manufacturers and government initiatives toward promotion and the development of automotive artificial intelligence technology. However, the Asia-Pacific region is anticipated to witness the fastest growth rate during the forecast period, owing to the rise in the adoption of artificial intelligence solutions by major automobile manufacturers. Furthermore, there is an increasing inclination of automakers towards self-driving vehicles, lower fuel emissions, and minimizing the chances of road fatalities, which are expected to enhance the market growth potential.
[REGIONGRAPH]
Automotive artificial intelligence relies on high-speed internet service for real-time information sharing related to driver alertness, traffic conditions, weather conditions, and others. The development in high-speed internet and communication technologies are anticipated to be a major driving factor for the growth of artificial intelligence in the automobile market.
For instance, according to statistics from Invest India, a National Investment Promotion and Facilitation Agency of India, set up by the Government of India and the Ministry of Commerce and Industry, outlines that India's telecom industry is the second largest in the world and as of September 2022, the internet subscriber base in the county accounted for 1.17 billion users. The growth of telecom industry in the country saw exponential growth in recent years due to rollout of 3G, 4G networks, affordable tariffs, and supportive government initiatives. Moreover, in 2022, the government announced the auction of IMT/5G spectrum, which is further expected to boost the telecom industry in the country. Many other countries, especially in developing regions of southeast Asia, Latin America, and the Middle East region, promote high-speed internet and the telecom industry. Thus, the penetration of high-speed internet is expected to be the crucial driving factor for the automotive artificial intelligence market size.
Government agencies look after the use of artificial intelligence technology in automobiles, such as the National Highway Traffic Safety Administration (NHTSA) and the European Union Agency for Cybersecurity (EUAC). Moreover, there has been a growth in regulatory challenges toward the use of AI in automobiles due to ethical and safety concerns.
For instance, in June 2023, NHTSA issued guidelines to assess whether manufacturers of prototype vehicles and equipment manufacturers, are fulfilling legal requirements to ensure that their products meet the regulatory standards which can otherwise results in the safety of motor vehicles and passengers. The amendment looks after examining the decisions made by software algorithms that analyze data inputs in real-time to determine the appropriate vehicle response and movement.
Key Market Segments
Key Market Players