AI in Automotive Market - Forecasts from 2023 to 2028

The AI in automotive market size was valued at US$12.66 billion in 2021 and is expected to grow at a CAGR of 22.69% to reach US$52.981 billion by 2028.

Artificial Intelligence (AI) technology is widely used in the automotive sector, from driverless automobiles, cabs, vehicles, and buses to industrial robots in manufacturing facilities. As a result, AI in the automotive industry has recently brought about significant developments. Artificial intelligence also alters the support roles in research and design, and production. Manufacturers in the automotive sector are concentrating on creating cutting-edge AI solutions to meet the need for autonomous vehicles as they become more mindful of the value of AI applications.

Artificial intelligence in cars can help drivers prevent collisions. Some AI-enabled technologies or sensors beep or alarm drivers to help them prevent accidents while they are driving. One of the most effective uses of AI in the auto sector is autonomous or driverless vehicles. The application of artificial intelligence to the production of self-learning, self-driving cars in the automotive industry has propelled the growth of the AI automotive market. Autonomous or connected vehicles require an increasing amount of data to function independently. Utilizing AI cloud services is advantageous in this situation since it guarantees data accessibility when self-driving cars are needed. One of the most significant applications of AI in the automobile sector is digital insurance claiming, which streamlines the process of filing insurance claims after accidents. An increasing number of assembly lines are implementing AI robots. Industrial robots in the car production process are currently more productive than human workers. The robots can also finish similar duties due to the advanced technology incorporated by artificial intelligence.

The rising technological advancements and consumer preference towards vehicles with advanced systems have been major drivers for AI in automotive market.

Consumers in developing economies are choosing luxury categories and vehicles with high-tech features like enhanced driver assistance, automated systems, and automatic parking and emergency braking since they have more disposable income. The newest innovations in the automotive sector, such as ridesharing and electrification, are being driven by artificial intelligence (AI). AI aids fleet management and pricing, balancing supply and demand in shared mobility.

Through startup investments, automotive corporations hope to advance their AI capabilities and applications. Investments are concentrated in areas like customer/driver experience and mobility services, where they aim to expand scalability to stay competitive significantly. Phantom AI, a Silicon Valley business that offers a complete autonomous driving platform with computer vision, sensor fusion, and control capabilities, announced in February 2023 that it had raised $36.5 million in its Series C fundraising round. KT Investment and Renaissance Asset Management are among the round's existing investors, and InterVest, Shinhan GIB, and Samsung Ventures are newcomers. Phantom AI is committed to assisting clients in lowering accident rates and improving daily driving experiences while revealing ADAS's potential. The new round will be used to quicken the development of the current series production with important OEMs.

Market Developments:

• In July 2022, Kotak Mahindra General Insurance announced its plans to incorporate automated car inspections for vehicle insurance renewals using AI-based technology. To accomplish this, it teamed up with Inspektlabs to automate the car inspection procedure. When renewing their insurance policies, customers can take pictures or videos of their cars and upload them to the cloud-based software. After uploading the photographs or videos, an automated inspection report outlining damages, if any, will be generated. Due to the process, human intervention is eliminated from repetitive tasks through automation, which increases accuracy while lowering the likelihood of error. Furthermore, it is incredibly cost-effective as it reduces the coverage time it takes to renew car insurance.
• In January 2023, ByteDance, a Chinese digital unicorn, expanded its artificial intelligence initiatives by collaborating with Haomo.AI Technology Co., owned by Great Wall Motor, and is working to build the largest autonomous driving computing facility in the nation. They opened this facility, Mana Oasis, in the same month. This partnership between Haomo AI and Volcano Engine, a cloud service platform owned by ByteDance, is expected to hasten efforts to encourage cutting-edge self-driving technology. The companies state that Mana Oasis has more computing capacity than other Chinese facilities, with 670 petaflops, or 670 quadrillion floating point operations per second.

Asia Pacific region holds substantial market shares in the AI automotive market.

Based on geography, the AI automotive market is segmented into North America, South America, Europe, the Middle East and Africa, and Asia Pacific. Since there is a sizable automotive and electronics industry in Asia Pacific, the area maintains significant market shares for AI in the automotive sector. The presence of numerous major automakers, including Tata Motors and Hyundai, is causing the region's automobile industry to flourish. Additionally, the AI automotive sector has benefited from these companies' efforts to promote AI. For instance, Hyundai Motor Group, a significant South Korean automaker, established the Boston Dynamics AI Institute in August 2022 to make fundamental advancements in artificial intelligence (AI), robotics, and intelligent machines. Initially, more than US$400 million was invested in the new institute by the group and Boston Dynamics. The institute intends to resolve the most significant and challenging issues preventing the development of advanced robotics as a research-first institution.

Market Segmentation

By Application

• Autonomous Vehicles
• Fully Automated
• Conditional Automated
• Emotion Detection and Risk Identification
• Testing
• Manufacturing
• Others

By Offering

• Hardware
• Software and Services

By Technology

• Computer Vision
• Context Awareness
• Deep Learning
• Machine Learning
• Natural Language Processing

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Others
• Middle East And Africa
• Saudi Arabia
• UAE
• Israel
• Other
• Asia Pacific
• China
• Japan
• India
• South Korea
• Indonesia
• Taiwan
• Others