Automotive Artificial Intelligence Market Expected to Reach $405.3 Billion by 2032

According to a new report published by Allied Market Research, titled, “Automotive Artificial Intelligence Market," The automotive artificial intelligence market size was valued at $13.8 billion in 2022, and is estimated to reach $405.3 billion by 2032, growing at a CAGR of 40.7% from 2023 to 2032.

Automotive artificial intelligence is the use of AI technology in automobiles to enhance various aspects of the automotive system, such as fuel efficiency, enhanced safety, and convenience features. It enhances the overall driving experience. The automotive sector is one of the major industries that utilizes artificial intelligence to enhance and replicate human behavior. In addition, the development of modern automobile features such as adaptive cruise control (ACC), blind spot alert, autonomous driving, predictive maintenance, and intelligent traffic management, as well as the surge in demand for other convenience features, draw automotive manufacturers' attention to artificial intelligence in automobiles. Similarly, In recent years, autonomous vehicles have gained popularity due to various features such as automatic parking, self-driving, autopilot, and others features. Autonomous vehicles minimize human effort while driving.For instance, Tesla, Inc. autopilot system has features such as keeping the vehicle within a lane while driving, auto changing the lanes whenever required and self-parking, which is one of the most advanced systems available in the market.

The global automotive artificial intelligence market analysis has seen significant growth due to surge in demand for autonomous vehicles, increase in high-speed internet and 5G technology, and rise in demand for enhanced user experience & convenience features. Increase in demand for premium vehicles and growth in connected vehicle technology are likely to create a growth opportunity for the industry. While a rise in security & privacy concerns and a stringent regulatory landscape are anticipated to hinder market growth rate during the forecast period.

The automotive artificial intelligence market size is segmented on the basis of component technology, application, and region. On the basis of components, the global market is divided into hardware, software, and services. By technology, the market is classified into machine learning and deep learning, computer vision, natural language processing, and others. On the basis of application, the market is segregated into semi-autonomous and autonomous. On the basis of region, the market is analyzed across North America, Europe, Asia-Pacific, and Latin America and Middle East and Africa.

In addition, the market is highly competitive, with several key players dominating the industry. Prominent manufacturers focus on innovation, product differentiation, and strategic partnerships to maintain their market positions. Automotive AI market leaders include companies such as Nvidia Corporation, Alphabet Inc, Intel Corporation, IBM, Microsoft Corporation, BMW AG, Uber Technologies, Inc, Tesla Inc, Toyota Motor Corporation, and AB Volvo.

Artificial intelligence has revolutionized the automotive industry. The human interaction in driving a vehicle has been minimized as compared to the earlier decade. In recent years, vehicle manufacturers have focused on reducing human assistance in driving and making the riding experience more comfortable and easier. For instance, car keys are estimated to become obsolete, and the majority of vehicles features are expected to be controlled by a mobile phone. In the current scenario, a cell phone is utilized to book taxis, track down vehicles, and open or start cars, which enhances the user experience due to the requirement of minimal effort and convenience.

Furthermore, increase in disposable income and growth in standard of living globally fuel the demand for high-end luxury vehicles. It is evident that in recent years, the premium car segment has exhibited growth in sales and as most of the premium vehicles nowadays are pre-installed with artificial intelligence technologies, there is a tremendous opportunity for its growth. Some of the leading high-end car manufacturers include Tesla, Inc., Honda Motor Co., Ltd., General Motors, BMW, and others. Thus, an increase in demand for the premium vehicle segment is anticipated to provide potential opportunities for the automotive artificial intelligence industry expansion.

Key Findings of the Study

• By component, the software segment is anticipated to exhibit significant growth in the automotive artificial intelligence market share in the near future.
• By technology, the natural language processing segment is anticipated to exhibit significant growth in the automotive artificial intelligence industry in the near future.
• By application, the autonomous segment is anticipated to exhibit significant growth in the automotive AI market in the near future.
• By Region, Asia-Pacific is anticipated to register the highest CAGR during the forecast period.