Global Automotive Artificial Intelligence Market - 2024-2031

Overview

Global Automotive Artificial Intelligence Market reached US$ 2.1 billion in 2023 and is expected to reach US$ 8.6 billion by 2031, growing with a CAGR of 24.1% during the forecast period 2024-2031.

The demand for AI technologies in cars is driven by the potential for enhanced safety, improved efficiency and increased convenience. AI algorithms and systems analyze vast amounts of data from sensors, cameras and other sources in real time which allows vehicles to make intelligent decisions and adapt to changing road conditions. The technologies are adapting the way for advanced driver assistance systems and fully autonomous vehicles.

Artificial intelligence is revolutionizing the automotive industry as particularly in the realm of autonomous cars. The concept of self-driving cars associated with futuristic visions of technology and the actual progress is higher than expected. However, according to Forbes, estimate suggest that the global market for AI in automobiles will experience substantial growth and reach the value of around US$ 60 billion by 2031.

In 2023, North America is expected to be the second-fastest growing region, holding about 25% of the global automotive artificial intelligence market. Countries like U.S. are growing with the implementation of the Inflation Reduction Act. For instance, according to IEA between August 2022 and March 2023, major electric vehicle and battery makers announced a cumulative post-IRA investment of US$ 52 billion in North American EV supply chains which is further going to increase the automotive AI market.

Dynamics

Focus on Sustainability with AI

The sustainability factor of AI in the automotive industry and particularly in the e-mobility sector is undeniable. AI benefits and contributes to a greener and sustainable future of transportation. Major advantage of AI in the e-mobility sector is increased efficiency. AI intelligently manages energy resources maximizing the range of electric vehicles and minimizing energy waste which makes them more efficient and sustainable.

Furthermore, for instance, according to an IBM study, 50% of consumers plan to adopt EVs in the next three years. AI is being used to optimize charging infrastructure, predict energy demand and improve grid efficiency to meet rising EV demands. Consumer motivations for adopting EVs include access to charge points, environmental awareness and charging convenience.

Rising Demand for AI-Powered EVs

The increasing adoption of electric vehicles is a major growth factor for the global market for AI in the automotive industry. AI further enhances the capabilities of EVs by enabling features like predictive maintenance, intelligent energy management and autonomous driving. It created a demand for AI technologies to optimize EV performance, enhance user experience and manage energy efficiency.

Furthermore, for instance Toyota's Research Institute unveiled a new generative AI technique to enhance electric vehicle (EV) range by improving the car design process and optimizing vehicle aerodynamic. Toyota aims to maximize EV range. The innovation aligns with Toyota's plans to introduce next-gen EV batteries between 2026 and 2028, promising double the range of their current electric model, the bZ4X.

Challenges Related to Black-box and AI Skills

The black-box problem of AI which is a difficulty in understanding how AI models make decisions, is indeed a significant challenge in the development of autonomous systems for the automotive industry. The lack of transparency and interpretability in AI models limiting people ability to fully trust and validate their decision-making processes.

The lack of AI expertise is a major drawback faced by the automotive industry and other sectors. Developing and deploying AI technologies with specialized skills and knowledge requires the concepts of data science, machine learning and algorithm development. The shortage of AI professionals and the complexity of these technologies make challenges for fully harnessing the potential of AI in the automotive industry.

Segment Analysis

The global automotive artificial intelligence market is segmented based on technology, application and region.

Rising Demand for Driving Assistance Drives the Segment Growth

AI driving features is expected to be the fastest growing segment with 1/3rd of the market during the forecast period 2024-2031. Self-driving vehicles depends on five essential components to navigate and operate on roads. The initial step in this process is computer vision which differs from how humans rely on their eyes and brain to drive. Driverless cars utilize computer images to identify lane lines and track other vehicles.

To effectively monitor their surroundings vehicles also incorporate multiple cameras. Tesla equips its cars with eight surround cameras which enable a 360-degree view of the area within approximately 500 feet of the vehicle. The cameras facilitate various tasks like lane detection, estimating road curvature, detecting obstacles, classifying stop signs, identifying traffic lights and many more.

Geographical Penetration

Rising AI Implementation in Automotive in Asia-Pacific

Asia-Pacific is the dominant region in the global automotive artificial intelligence market covering about 30% of the market. The region is growing in AI-based automotive market driven by factors like technological advancements, strong manufacturing base, government support, rising demand for smart and connected vehicles and collaborations between automotive companies and technology partners. Japan and China made a notable strides in AI and automotive technologies with companies like Toyota, Hyundai and Honda investing in AI to enhance vehicle capabilities.

The latest data from China indicates a significant increase in shipments and retail sales of new-EVs in 2022. Shipments of EVs to dealerships surged by about 95% to reach around 6.5 million units and in line with the forecast of about 6.5 million made by the Passenger Car Association. Moreover, nationwide retail sales of NEVs including pure electric cars and hybrids have experienced a notable growth of 90% to reach about 5.7 million units. In December 2022 NEV retail sales rose by 6.5% compared to November, reaching around 641,000 units.

Competitive Landscape

The major global players in the market include Carvi, German Autolabs, Raven, Argo AI, Deepscale, Cisco, Waymo, Microsoft Azure, Nvidia and Tesla.

COVID-19 Impact

The COVID-19 pandemic shows both positive and negative impact on the integration of AI in the automotive industry. It caused delays in development and testing of AI-based automotive technologies, but also accelerated the adoption of digital tools and remote collaboration platforms. The focus on safety and hygiene led to increased interest in AI-powered features such as touchless interfaces and improved air filtration systems.

COVID-19 caused disruptions in R&D activities due to travel restrictions and facility closures which results in delays in projects and testing. The pandemic also prompted increased investment in digital tools and virtual collaboration platforms to continue R&D efforts remotely. The global supply chains of automotive companies were severely affected by delayed production and shortages of key components due to lockdown measures and transportation restriction.

Russia-Ukraine War Impact

The conflict between Russia and Ukraine has potentially impacted the AI automotive market in several ways. The disruption of supply chains and trade routes between the two countries could affect the sourcing of components including AI-related technologies for the automotive industry. The conflict results in damage to infrastructure including transportation networks and supply chains, further complicating business operations and hindering the smooth flow of goods and services.

Geopolitical uncertainties resulting from the conflict may lead to cautious investment decisions and business operations, potentially slowing down collaborations and expansions related to AI integration in the automotive sectors. The conflict's focus on military and security technologies could divert attention and resources away from commercial developments which potentially impact the pace of AI innovation within the automotive industry.

The conflict puts a negative impact on consumer confidence. The uncertainties surrounding the conflict and its potential consequences led to a decrease in consumer confidence which results in reduced spending and a decline in demand for products and services, including automobiles and AI-powered vehicles. The factors collectively highlight the adverse effects of the conflict on business operations, infrastructure and consumer sentiment in the region.

AI Impact

The integration of artificial intelligence had a transformative impact on the automotive industry. AI technologies played a crucial role in enhancing vehicle intelligence, safety and autonomous capabilities. In the new world of advanced driver-assistance systems AI algorithms supports features like adaptive cruise control, lane-keeping assistance and automatic emergency braking and enhancing the overall safety of vehicles. Also, AI powers computer vision systems recognizes and interpret road signs, pedestrians and other objects which provide valuable information to the driver and supporting decision-making.

Generative AI models like Jasper and DALL-E 2, are indeed revolutionizing customer engagement in marketing and advertising which includes within the automotive industry. The powerful tools leverage the capabilities of generative models like GPT-3 to automatically generate customer-centric marketing content across various channels.

By Technology

• Machine Learning & Deep Learning
• Computer Vision
• Natural Language Processing

By Application

• AI Driving Features
• AI Cloud Services
• AI Automotive Insurance
• AI in Car Manufacturing

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In May 2021, Didi Chuxing announced a strategic agreement with Volvo Cars to develop autonomous vehicles for DiDi's self-driving test fleet. Volvo Cars' autonomous drive-ready XC90 vehicles will be the first to feature DiDi Gemini, a new self-driving hardware platform powered by NVIDIA DRIVE AGX Pegasus. The vehicles, outfitted with DiDi's Gemini self-driving hardware platform, will eventually be used for robotaxi services.
• In March 2021, BMW announced its next-generation infotainment system, iDrive 8, intended to operate as a digital, intelligent and active partner for drivers. The technology driven by machine learning, natural language processing, AI cloud and 5G will have its debut with the next BMW iX and i4.
• In February 2021, Volkswagen and Microsoft collaborated to make self-driving car software. VW's new software division will establish a cloud-based platform with Microsoft to assist streamline development processes, allow for speedier integration into its vehicle fleet and make it much easier to send software upgrades to add new features to cars.

Why Purchase the Report?

• To visualize the global automotive artificial intelligence market segmentation based on technology, application and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of automotive artificial intelligence market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global Automotive Artificial Intelligence market report would provide approximately 54 tables, 43 figures and 186 pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies