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Automotive Artificial Intelligence Market size was over USD 4.1 billion in 2024 and is estimated to reach USD 80.8 billion by the end of 2037, expanding at a CAGR of 28.2% during the forecast timeline, i.e., 2025-2037. In 2025, the industry size of the automotive artificial intelligence is projected to be valued at USD 5.2 billion.
Technological development in transportation has inflated the demand for AI integration in vehicles. The adoption of artificial intelligence in traffic management has changed the market dynamics. From public routing to logistics tracking, autonomous vehicles are improving consumer experience. The driverless concept has encouraged automakers to implement sensing technologies in cars.
Companies are investing in future developments in this sector. In January 2024, Volkswagen established a specialized AI laboratory to introduce new digital products. Such collaboration with technology inspires optimum usage of innovation in the automotive industry. Autonomous driving is being developed to offer consumers enhanced assistance for navigation and decision making. The automotive artificial intelligence market is enlarging with the gaining traction in predictive maintenance. Improved safety and reduced accidents are inspiring on-road release of AI-driven vehicles. Major player is leveraging machine learning to safety features and optimize supply chain process.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
28.2% |
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Base Year Market Size (2024) |
USD 4.1 billion |
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Forecast Year Market Size (2037) |
USD 80.8 billion |
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Regional Scope |
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Offering (Hardware, Software, Service)
As per the offerings, the hardware segment is estimated to capture the highest share of 76.6% by the end of 2037 in the automotive artificial intelligence market. The transition of vehicles toward automation has raised the need for more powerful processors and GPUs. In March 2024, Nvidia Corporation launched its new Blackwell GPU. It can accelerate the computing power of a generative AI to deliver real-time data in vehicles. These are now accepted by reputed technology service providers including Microsoft, OpenAI, and Tesla. Developed sensor technologies including LiDAR, camera, and RADAR are propelling the demand for high-performance hardware. Developed sensor technologies including LiDAR, camera, and RADAR are propelling the demand for high-performance hardware.
Technology (Computer Vision, Context Awareness, Deep Learning, Machine Learning, Natural Language Processing)
Based on technology, the machine learning segment is dominating the automotive artificial intelligence market. The growth in this segment is driven by its advanced computing power and increased adoption of ADAS. Swelling safety concerns in consumers while driving are demanding liable data processing in automotive artificial intelligence. The learning capability of AI form the real-world efficiently serves the purpose through their effective sensory processors. Usage of recent developments such as AI chips in decision-making algorithms has enhanced its capabilities. The ability to streamline operations in the supply chain is driving manufacturers to adopt AI solutions. Further, solidifying the dominance of machine learning.
Our in-depth analysis of the automotive artificial intelligence market includes the following segments:
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Offering |
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Technology |
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Application |
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Process |
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Component |
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North America Market Analysis
North America is predicted to witness massive growth in the automotive artificial (AI) market during the forecast period. It is poised to capture the largest share of 39.0% by the end of 2037 and to hold USD 2.1 billion by 2025. Features such as cruise control, lane-keeping assist, and advanced parking systems are becoming standards for integrating AI into vehicles. Improved automobile performance and reduced data analysis downtime inspire automakers to invest in future developments. Shifting consumer expectations for enhanced functionality is creating scopes for innovation. Researchers are leveraging AI penetration for public usage through government funding. In March 2023, Mcity 2.0 was launched under the supervision of NSF and CCAT. This vehicle testing facility was run and optimized by the University of Michigan.
The U.S. is augmenting and experiencing massive growth in the automotive AI market. The collaboration of major tech companies and automakers is captivating investments in machine learning and computer vision in vehicles. The U.S. government is also shaping the standards of deployed autonomous transportation. In February 2023, the U.S. government introduced a 5-year SERI project, initiating a research facility NIST. This program was aimed to elevate the AI, cybersecurity, and communications in Avs. Increasing venture capital investment in the automotive sector is inspiring startups to adopt AI. In January 2024, Cerence collaborated with Microsoft to deliver AI-powered in-car experience to users. This model will simplify user access through the implementation of OpenAI ChatGPT.
Canada is also curating development in the automotive artificial intelligence market. The capability of maintenance prediction through analyzing vehicle data helps to reduce repair costs. Generative AI also helps automakers accumulate consumer preferences to offer them personalized solutions. Canada government is also funding research and development in this sector. They are focused on transitioning into smart transportation through machine learning technologies, including artificial intelligence. Such regulatory support is encouraging companies to introduce innovation in this industry. The strong industry presence of Canada is pioneering greater opportunities for investments.
APAC Market Statistics
Asia Pacific is portraying lucrative growth opportunities in the automotive AI market. Developing countries such as India, Japan, China, and South Korea are heavily investing in infrastructure development. Regional automakers are focusing on integrating smart technologies in manufacturing automobiles. Governments are focusing on implementing driverless traffic practices to reduce road fatalities. Automobile leaders are collaborating to develop more convenient user interfaces for drivers. In September 2024, Hyundai Motor allied with Kia and Samsung Electronics to enhance the SDV user experience. This partnership was aimed to improve the connectivity between the vehicle and smartphone for smoother operation. According to the agreement, Kia will develop an AI-powered platform by 2025 for seamless connection.
India is predicted to become a large consumer base for the automotive artificial intelligence market in upcoming years. Growing adoption of AI in industries including transportation has inflated the demand for autonomous driving. The adaptive landscape has created a thriving ecosystem for startups and innovation in this sector. Investments in building smart cities are inspiring domestic automakers to integrate AI. Push towards green transportation, autonomous solutions are implemented to manufacture energy-efficient vehicles. Rising consumer expectations for personalized driving experience is enlarging the market. In September 2024, Honda began a joint research facility with IIT Delhi and IIT Bombay. This collaboration will work on developing CI for societies to realize a complete AI-powered system.
China is also emerging to lead the automotive AI market in this region. Inflating demand for smart features including AI navigation, voice recognition, and personalized infotainment systems is influencing automakers. The strong tech ecosystem and government backing are driving the continued expansion. This is further, fueling technological innovation in autonomous transportation. Favorable subsidies and policies are contributing to the deployment of self-driving vehicles on public roads. Local companies are also introducing innovative automatic systems to stand out in global competition. In October 2024, XPENG introduced a new AI-defined vehicle, XPENG P7+. This automobile can challenge international competitors through its affordable price range.
 Market Size.webp)
Leading companies in the automotive artificial intelligence market are now investing to develop their autonomous driving technologies. They are pushing research and innovation in this sector to offer improved user experience. The updated software-driven vehicles are now capable of delivering real-time insight data. ADAS solutions are being launched to suit and enhance EV operations. In May 2024, Autobrains launched a new design for an ADAS solution to implement liquid AI in EVs for China. Many automakers are partnering with tech companies to accelerate AI development. The key players in the automotive AI sector include:
Author Credits: Saima Khursheed
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