Automotive Digital Key Market Trends

Growth Drivers

• Changing consumer preferences: Consumers are steadily becoming tech-savvy and are willing to adopt new technologies, including digital key systems, due to rising concerns about vehicle safety. Consumers these days value personalized experiences such as driver-specific settings for seat position, climate, and music that can be configured automatically with a digital key. This has resulted in increasing demand for digital keys and industry giants are heavily investing in R&D activities to develop and launch secure digital keys, preventing unauthorized access to the vehicle.
• Shifting preference towards vehicle sharing and mobility-as-a-service:  In recent years, there has been a rapid increase in shared mobility services such as car rentals and ride-sharing platforms. This has resulted in increasing demand for digital keys for contactless, remote operations.  In addition, increasing demand for premium vehicles is expected to boost global automotive digital key market growth. These cars are equipped with advanced features and technologies, including digital keys.

Challenges

• Rising concerns about data security and high implementation costs: As vehicles become more connected, these face vulnerabilities to hacking, and trust issues among consumers. Digital technology collects personal data from users which can cause concerns, hampering the widespread adoption of digital keys. In addition, the development, testing, and integration of digital key systems involves high investments, making it challenging for mid-tier OEMs and end users.
• Limited adoption of smartphones in many developing economies: Though automotive digital keys are rapidly gaining traction, the limited adoption of smartphones and advanced technology, especially in developing economies can restrain automotive digital key market growth. Moreover, dependency on battery-powered smartphones or connectivity for digital key functionality can lead to device failure, hampering market expansion.