Artificial intelligence in the automotive sector refers to the integration of artificial intelligence technologies in vehicles. It enables vehicles to perceive their surroundings, navigate road situations and drive themselves. AI systems assist drivers by analyzing data from sensors to identify patterns and predict outcomes and responses. By integrating advanced algorithms and AI capabilities, vehicles can sense the environment and navigate roads more intelligently and safely than human drivers. The rising demand for autonomous and semi-autonomous vehicles is a major factor driving the adoption of AI technologies in the automotive industry. Advanced driver assistance systems that rely on computer vision and sensors are becoming increasingly common to avoid accidents and ease the driving experience.
The global artificial intelligence in the automotive market is estimated to be valued at US$ 10.72 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the artificial intelligence in automotive market are BMW AG, AUDI AG, Intel Corporation, Tesla Inc, Uber Technologies, Volvo Car Corporation, Honda Motors, Ford Motor Company, NVIDIA Corporation, and Tencent, Microsoft. BMW AG and AUDI AG are focusing on developing advanced driver assistance systems and autonomous driving technologies. Intel Corporation and NVIDIA Corporation are collaborating with leading automakers to provide AI chips, software and platforms.
The rising demand for autonomous vehicles and connected mobility services presents significant growth opportunities for AI system and software developers in the automotive industry. Global tech giants and automakers are investing heavily in developing fully autonomous vehicle technologies to commercialize driverless taxi and transportation services in the coming decade.
Leading automakers and tech companies are also strategically expanding their autonomous vehicle and mobility services to major global markets. For instance, Waymo has started offering commercial autonomous ride-hailing services in Phoenix. Tesla is ramping up Supercharger networks and service centers in China and Europe to support the growth of its electric vehicles overseas.
Market Drivers
Growing demand for advanced driver assistance systems: The rising road accidents globally due to human errors is fueling the demand for driver assistance technologies based on computer vision, sensors and AI. ADAS features help detect pedestrians, avoid collisions and take over controls in emergencies.
Technological advancements in Artificial Intelligence In The Automotive Market Growth.: Significant improvements in deep learning algorithms, low-cost high-performance AI chips, and availability of massive amounts of automotive data is supporting the integration of more sophisticated AI capabilities in vehicles.
Market Restrain
High research and development costs: Developing autonomous vehicle technologies involving advanced AI, sensors and mapping capabilities requires huge investments over several years which is a major challenge for emerging players.
Cybersecurity risks: Connected vehicles accumulating and transmitting huge amounts of data also increase the vulnerability to cyber-attacks. Addressing security issues and ensuring safe operation of autonomous systems is important to gain customer trust.
Segment Analysis
The global Artificial Intelligence In Automotive market is segmented by offering, technology, process, application and vehicle type. Within offering segment, hardware is dominating sub-segment as it forms foundation for AI integration in vehicles and its demand is increasing with growing number of autonomous and semi-autonomous vehicles on road requiring sensors, cameras and other AI hardware. By technology, deep learning is largest sub-segment due to its wide applications in autonomous driving vehicles for real-time data processing from sensors and camerasand helping cars to mimic human behaviors for critical decision making.
Global Analysis
Regionally, Asia Pacific region holds largest share in global Artificial Intelligence In Automotive Market Regional Analysis and expected to witness fastest growth during forecast period. This is attributed to large automotive manufacturing presence in countries like China and India. Increased focus of regional automakers and tech companies on developing self-driving vehicles is driving the APAC AI in automotive market. North America holds second largest share led by massive investments in R&D of autonomous vehicles by US based automakers and tech giants. While Europe also holds significant share due to stringent regulations and increased adoption of advanced driver assistance systems in vehicles.
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