AI Market: Focus on Automotive, 2023-2028

AI Market: Focus on Automotive, 2023-2028

Market Overview

The global AI in automotive market witnessed a growth of 22.4% in 2022 as compared to the previous year, resulting in a market size of USD 4.81 billion.

The software & services category emerged as the top performer in 2022, recording a remarkable revenue growth of 23.7% from the previous year and attaining a revenue of USD 2.71 billion.

It is anticipated that the global AI in automotive market will witness a CAGR of 26.1% during the forecast period, leading to a projected value of USD 18.57 billion by the year 2028.

North America was the primary revenue contributor, accounting for 37.8% of the sales value share in 2022.

Artificial intelligence (AI) refers to computer systems designed to perform tasks and exhibit behaviors typically requiring human cognition and perception. AI aims to develop machines capable of emulating the nuanced thinking, decision-making, problem-solving and continuous learning capabilities of the human mind.

In recent years, AI integration has accelerated across diverse domains including transportation, healthcare, finance, manufacturing, and entertainment. AI now plays a pervasive role in people's daily activities from navigation apps to product recommendations.

As a pivotal Fourth Industrial Revolution technology, artificial intelligence (AI) holds tremendous potential to transform entire industries and economies by driving new levels of automation, insights and innovation across sectors. However, realizing this potential hinges on overcoming current limitations around data dependence, algorithmic biases, and adaptability of AI systems. In 2022, the global automotive AI market generated USD 4.81 billion in revenues, with projections to reach USD 18.57 billion by 2028, representing a 26.1% compound annual growth rate.

This report by Tanalyze provides a market-level overview focused specifically on adoption of artificial intelligence in the automotive sphere. As AI capabilities advance, its integration in areas like autonomous driving, vehicle diagnostics and maintenance, in-car personalization and safety is accelerating.

The report analyzes the competitive landscape, technology trends, regional variations and market growth projections around automotive artificial intelligence. It aims to provide a comprehensive understanding of the current status, emerging developments and future outlook for exploiting AI's possibilities in the automotive space, while also considering the barriers to be addressed. For stakeholders ranging from OEMs to suppliers and technology companies, these insights can help guide strategies in this promising and rapidly evolving field.

Segment Insights

The global AI in automotive market can be categorized by vehicle type into passenger cars, light commercial vehicles, and heavy commercial vehicles (heavy trucks, buses, and coaches). The passenger car segment dominated the artificial intelligence in the automotive market in 2022, generating $3.36 billion in revenue. This segment is projected to see continued strong growth, with revenue expected to reach $12.53 billion during the 2023-2028 forecast period, representing a compound annual growth rate of 25.3%.

The hardware segment of this market generated $2.92 billion in revenue in 2022. It is expected to witness significant growth and reach $10.25 billion by 2028, representing a compound annual growth rate of 24.0% over the forecast period from 2023 to 2028. Artificial intelligence automotive systems encompass various components such as sensors, cloud platforms, processors, and software. These systems are designed to enhance driver authentication and monitoring applications, utilizing technologies like cameras, night vision, and modality sensors. Sensors play a crucial role in providing input data, while cloud platforms and chips enable the functioning of AI through the utilization of specialized software.

Hardware is key to artificial intelligence. Processors, memory, and networks are needed. Hardware allows software to communicate with artificial intelligence systems. Sensors in vehicles and intersections send data to software through telematics networks at data centers. There is demand for high-power, high-memory hardware to run complex AI algorithms like deep neural networks. Hardware like CPUs, GPUs, and chips must scale with workload. Integrating hardware and software enables real-time monitoring and predictive analysis of vehicle data. Decreasing costs and improving efficiency are growing the market.

AI has found application in various areas within the automotive sector, namely autonomous driving and semi-autonomous driving. Semi-autonomous vehicles can be categorized into levels one through three based on their capabilities. Based on projections, the global AI in automotive market is expected to witness rapid growth in autonomous driving applications. However, it is anticipated that semi-autonomous applications will continue to dominate the market during the forecast period.

In 2022, North America holds the majority market share of the global artificial intelligence industry. However, the Asia-Pacific region is projected to experience the highest growth rate during the forecast period. Several factors are expected to contribute significantly to Asia-Pacific's rapid market expansion for AI. Government initiatives across the region aim to promote investment and adoption of emerging technologies. Additionally, digital transformation is accelerating across Asian economies, generating large volumes of electronic data that can be leveraged by AI systems. Access to vast datasets is a key driver of AI research and application development. Finally, ongoing improvements in technological infrastructure across Asia-Pacific are helping to facilitate widespread integration and deployment of advanced AI technologies.

Competitive Landscape

The global market for artificial intelligence (AI) in the automotive industry involves a wide range of corporate participants across various sectors. These participants play crucial roles in providing the necessary hardware, software, and cloud solutions for the deployment of AI systems in automobiles.

Prominent players in the global AI in automotive market include Argo AI, Nvidia Corporation, Cruise, Waymo, Mobileye, Luminar, Apollo, Continental AG, Denso Corporation, Intel Corporation, and Tesla Inc. These companies are at the forefront of developing and providing cutting-edge AI solutions for the automotive industry.

Key Questions Answered

What is the projected global market size of AI in automotive by 2028?
In the AI in automotive market, which vehicle type segment attains the foremost position?
Which component segment generates the most substantial revenue?
Which end-user segment achieves the highest performance in the AI in automotive market?
Within the market, which region segment has secured the leading position?
Who are the key players with the largest market share in the AI in automotive market?
What is the estimated global market size for the AI in automotive market in 2023?
What are the main factors driving the growth of the AI in automotive market?
What is the expected incremental growth of the AI in automotive market during the forecast period?