Automotive AI Market Size Expected to Grow to USD 19.09 Billion by 2032, With

Automotive AI Market Size Expected to Grow to USD 19.09 Billion by 2032, With a CAGR of Around 10.55%

Status: Published Category: Automotive Technology Insight Code: 1261 Format: PDF / PPT / Excel


The automotive AI market was valued at USD 6.32 billion in 2023 and is expected to grow by USD 19.09 billion at a CAGR of around 10.55% from 2024 to 2032.

Automotive AI Market Size 2023 - 2032

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The global adoption of driverless cars is poised to revolutionize transportation systems and spur economic growth. This surge in demand is fueled by growing consumer awareness of the myriad benefits that driverless vehicles offer. Major automobile manufacturers consider artificial intelligence (AI) as indispensable for the development and production of driverless cars, as AI powers the complex algorithms necessary for autonomous driving.

Governments and automakers worldwide are actively pursuing strategic initiatives to foster innovation in the realm of autonomous vehicles. These efforts include regulatory reforms, funding for research and development, and collaborations with tech companies to advance AI technology in the automotive sector.

The rise in demand for Advanced Driver Assistance Systems (ADAS), which aid human drivers in making intelligent driving decisions, is propelling the integration of AI in the automotive industry. Automakers are leveraging AI to enhance operational efficiency, optimize production processes, and increase manufacturing capacity.

However, the increasing reliance on AI in automobiles has raised concerns about data security and cyber threats. The potential for data breaches and cyber attacks poses significant risks to both vehicle operators and passengers. There is also apprehension about the vulnerability of autonomous vehicles to terrorist attacks, where malicious actors could exploit weaknesses in traffic infrastructure to hijack public transportation systems, posing a grave threat to national security.

To mitigate these risks, the widespread adoption of 5G connectivity and advancements in cloud orchestration are crucial. These technologies enable the implementation of robust security measures to safeguard autonomous vehicles from cyber threats. Additionally, the integration of machine learning algorithms enhances the computing power of autonomous vehicles, enabling rapid threat detection and response in real-time, thereby ensuring the safety and security of passengers and the public.

Artificial Intelligence in Automotive Market Analysis

The automotive industry is witnessing a remarkable surge in the market size of smart software, which is projected to reach a staggering $300 billion by the year 2032. This exponential growth can be attributed to the widespread adoption of advanced technologies such as recognition systems, confirmation systems, and prediction algorithms. The increasing demand for cutting-edge in-car infotainment systems and human-machine interfaces is expected to drive the proliferation of smart vehicle software platforms in the coming years.

Automotive AI Market Share, By Technology 2023 (%)

Artificial intelligence (AI) is poised to play a pivotal role in shaping the future of the automotive industry, with its share expected to peak in 2022. This surge in AI adoption is fueled by the rising utilization of machine learning algorithms, which excel at learning data representations and are increasingly sought after by businesses across various sectors.

In the year 2022 alone, smart vehicle software platforms have garnered an impressive investment of nearly $2 billion, reflecting the immense market potential and investor confidence in this burgeoning industry. Data mining technologies are instrumental in empowering cars to achieve varying degrees of autonomy, from semi-autonomous to fully autonomous, by leveraging a multitude of sensors to identify and interpret objects, images, and different driving scenarios.

As the global vehicle population continues to grow, so does the volume of vehicle-generated data, driving up the demand for cutting-edge data science technologies within the automotive sector. By the year 2032, the market size for data science technology in the automotive industry is expected to exceed a remarkable $30 billion, underscoring the critical role of data-driven insights in shaping the future of mobility.

Looking ahead, a report by Securing America's Energy Future (SAFE) highlights the immense potential of the driverless car market, which is projected to reach an estimated value of approximately $800 billion by the year 2050. This presents a lucrative opportunity for automotive and technology companies alike to capitalize on the transformative potential of autonomous driving technology.

Asia-Pacific Expected to Grow in Automotive AI Market

By the year 2032, the smart vehicle market in the Asia-Pacific region is poised for significant growth, with projections indicating an expansion of more than 50%. This surge in demand for smart vehicles underscores the region's increasing appetite for cutting-edge automotive technologies aimed at enhancing safety, efficiency, and overall driving experience. As countries in the Asia-Pacific region continue to witness rapid urbanization and economic development, consumers are increasingly inclined towards adopting smart vehicles equipped with advanced features and functionalities.

Automotive AI Market NA, EU, APAC, LA, MEA Share, 2023

Indian car insurance industry is experiencing a notable shift towards the adoption of artificial intelligence (AI) technology. With the advent of AI-powered solutions, insurance providers in India are leveraging advanced algorithms and data analytics to enhance various aspects of their operations, ranging from risk assessment and pricing strategies to claims processing and customer service. By harnessing the capabilities of AI, insurers can streamline processes, improve accuracy, and offer more personalized services to policyholders.

Overall, these developments underscore the transformative impact of technology on the automotive and insurance sectors in the Asia-Pacific region, paving the way for a future characterized by smarter vehicles and more efficient insurance practices.

Artificial Intelligence in Automotive Market Key Players

Top companies operating in the artificial intelligence in automotive market are:

  • IBM Corporation 
  • BMW AG
  • Honda Motors 
  • Volvo Car Corporation 
  • Ford Motor Company 
  • NVIDIA Corporation 
  • Tencent 
  • Microsoft 
  • AUDI AG 
  • Intel Corporation 
  • Tesla Inc 
  • Uber Technologies Inc 
  • Intel Corporation 

In November 2022, Google and Renault, a leading automaker, announced an expansion of their collaboration aimed at pioneering the development and implementation of cutting-edge "software-defined vehicle" (SDV) architecture. This strategic partnership is geared towards accelerating Renault's digital transformation journey by leveraging innovative digital cloud software and automotive software solutions on the SDV platform.

The collaboration between Google and Renault signifies a significant step towards revolutionizing the automotive industry by embracing software-defined vehicle architecture. By adopting this advanced SDV framework, Renault aims to enhance the digital capabilities of its vehicles, offering customers a seamless and personalized driving experience powered by state-of-the-art software solutions.

Through this partnership, Renault endeavors to leverage Google's expertise in cloud technology and software development to create next-generation vehicles equipped with advanced digital features and functionalities. The SDV platform will serve as the foundation for integrating cloud-based services, AI-driven applications, and connected technologies into Renault's automotive ecosystem, driving innovation and setting new industry standards.

Overall, the collaboration between Google and Renault exemplifies a strategic alliance aimed at harnessing the power of software-defined vehicle architecture to redefine the future of mobility, ushering in an era of intelligent, connected, and digitally-driven automobiles.

Automotive AI Market Recent Developments

  • In August 2023, AVL List GmbH introduced the AVL PEMS i60, an advanced portable emissions measurement system designed to accurately monitor real-world vehicle emissions during on-road testing, addressing evolving regulatory requirements.
  • In November 2022, TSI Incorporated launched the TSI 3795, a compact particle counter specifically designed for automotive applications, enabling precise measurement of exhaust particulate matter to meet stringent emissions standards.
  • In March 2022, HORIBA Automotive Test Systems unveiled the MEXA-ONE, a next-generation emissions measurement system capable of analyzing exhaust gases from various vehicle types with enhanced accuracy and efficiency.
  • In September 2022,Testo SE & Co. KGaA released the Testo 350 XL, an advanced emissions analyzer equipped with state-of-the-art sensors and software for comprehensive exhaust gas analysis in compliance with global emissions regulations.
  • In December 2022, AVL List GmbH launched the AVL M.O.V.E iSYS 2100, a cutting-edge mobile emissions measurement system designed to provide precise data on vehicle emissions during real-world driving conditions, aiding in emission reduction efforts.

Impact of COVID-19 Pandemic

Lockdown measures imposed during the coronavirus outbreak severely disrupted the automotive sector. Future mobility solutions like driverless cars have been severely hampered by company strategies to limit corporate expenditures and technological advancements to reduce costs. However, the pandemic has accelerated digitalization development across the automotive sector. The growing inclination of the auto industry towards electrification and autonomy, prioritizing green choices and electrification and the increased adoption of autonomous technologies is set to enhance revenue growth in the post covid scenario.

Automotive AI Market Segmentation

By Component

  • Hardware
  • Software
  • Services

By Level of Autonomy

  • Level 1
  • Level 2
  • Level 3
  • Level 4

By Technology

  • Machine Learning
  • Natural Language Processing
  • Computer Vision
  • Context-aware Computing
  • Others

By Vehicle Type

  • Passenger Vehicles
  • Commercial Vehicles

By Geography

  • North America
    • United States
    • Canada
    • Rest of North America
  • Europe
    • Germany
    • United Kingdom
    • France
    • Italy
    • Spain
    • Rest of Europe
  • Asia-Pacific
    • India
    • China
    • Japan
    • South Korea
    • Rest of Asia-Pacific
  • Latin America
    • Brazil
    • Rest of Latin America
  • Middle East and Africa
    • South Africa
    • Rest of Middle East and Africa

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About The Author

Adriel Mergulhao is a distinguished professional renowned for his expertise in consulting, market research, and primary market analysis. With over the year of experience, Adriel has solidified his position as a senior solution advisor, providing invaluable insights to numerous clients across diverse industries. His proficiency in primary market research methodologies allows him to uncover deep-seated consumer preferences and trends, empowering businesses to make strategic decisions confidently.

Adriel's strategic insight and analytical prowess have earned him a reputation for delivering actionable recommendations that drive business growth and profitability. He has a proven track record of success in translating market insights into tangible results, making him a sought-after advisor in the competitive market research landscape. Adriel's dedication to excellence and commitment to client success underscore his position as a trusted expert in the field.


AI plays a crucial role in the automotive industry by enabling advanced driver assistance systems (ADAS), autonomous driving technology, predictive maintenance, vehicle personalization, and enhanced in-car entertainment systems.

Automotive manufacturers are leveraging AI to develop systems such as pedestrian detection, collision avoidance, lane-keeping assistance, and adaptive cruise control, all of which contribute to improving vehicle safety and reducing accidents on the road.

Challenges in the Automotive AI Market include data privacy concerns, cybersecurity threats, regulatory compliance, interoperability issues between different AI systems, and the ethical implications of AI-powered decision-making in autonomous vehicles.

AI is being used to enhance the driving experience by enabling features such as voice recognition, natural language processing, intelligent navigation systems, predictive maintenance alerts, personalized recommendations, and adaptive in-car entertainment systems.

Emerging trends in the Automotive AI Market include the integration of AI-powered virtual assistants in vehicles, the development of autonomous vehicle platforms, the use of AI for predictive analytics in fleet management, and the adoption of AI-driven manufacturing processes to improve efficiency and quality.

Appy Pie, Spyne, Knowbl, Built In, AI Online, NVIDIA, Aptiv and Bosch.

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