The increasing demand for autonomous vehicles and increase in preference for enhanced user experience & convenience features are the prime factors fuelling the Artificial intelligence in automotive market.
The Global Artificial Intelligence (AI) in Automotive Market was valued at US$ 9,392.6 Mn in 2019 and is expected to reach US$ 36,667.9 Mn by 2027, expanding at a CAGR of 20.9% during the forecast period (2021-2027).
Rapid advancement in technology has led to the increasing demand of AI-enabled automotive globally. The increased adoption of AI in automotive has resulted in vehicles progressing from needing driver assistance to becoming driverless car. In these driverless cars, AI helps in acting as the brains of the cars and perform several functions such as staying in the lane, switching lanes, and following the GPS to get to the final destination. For instance, Tesla’s autopilot launched in year 2015, has the ability to check the meeting schedule of the driver and drive him/her to their final destination. Moreover, the increase in preference for enhanced user experience & convenience features is another major factor driving the growth of global AI in automotive market. Artificial intelligence helps in creating several advanced driver assistance system (ADAS) features in a vehicle and has various applications such as parking, guiding and driving the vehicle, among others. Artificial Intelligence has enabled the vehicle system to self-control the vehicle settings and adapt them according to the driver’s preferences. In addition, AI also helps in processing vehicle data from different sensors such as camera, radar, LiDAR, and ultrasonic, among which provides better functioning to the ADAS system in a vehicle. Owing to these benefits, there has been a rising adoption of AI in the automotive industry.
Additionally, government regulations to improve the safety in vehicles while assuring environmental sustainability is further expected to propel the market. For instance, In September 2016, the National Highway Traffic Safety Administration (NHTSA) and the U.S. Department of Transportation issued the Federal Automated Vehicles Policy which is a proactive approach to providing safety assurance and facilitating innovation. Moreover, the rising road accidents is majorly fuelling the demand for AI’s automated and semi-automated cars. For Instance, as per the Road Accident Report for 2019, a total number of 449,002 accidents took place in India in the year 2019, leading to 151,113 deaths and 451,361 injuries. Rapid technological advancement has improved various driving and safety features in the modern vehicles. The AI’s predictive analytics features aim towards decreasing human errors on the road and helps in reducing the number of accidents. This feature helps autonomous vehicles in predicting the movements of objects surrounding the vehicle. For instance, Waymo, Google’s self-driving car project warns about the vehicle movements on various lanes and the movement of people walking across the streets. These analytics thus helps vehicles to automatically adjust their speed and maintain an optimal distance with other vehicles in traffic. Because of these benefits, many nations are investing in advanced technologies in automotive industry to improve safety in vehicles. For instance, in 2016, U.K. government committed an investment of $327.5 million (£250 million) towards R&D and test sites to accelerate development of safe technologies for automotive vehicles for the U.K. market.
Global AI in automotive market By Region Outlook (Revenue, USD Million, 2021-2027)
Based on region, Asia-Pacific is the fastest growing region in the Global AI in automotive market. China is the largest producer of vehicles globally which is primarily affecting the growth in this region. The number of OEMs deploying AI more than doubled from 5% to 9% in one year during 2017-2018. Startups like Horizon Robotics, TuSimple, and WeRide received Series B (USD 600 million), Series D (USD 200 million), and Series A+(more than USD 10 million) funding respectively in 2019. Many large tech companies such as Baidu has collaborated with over 90 firms to provide autonomous mobility support with its self-driving support platform Apollo. Also, the “Made in China 2025 strategy”, aims at mastering advanced technologies of intelligent driving and creating an ecosystem for research and development, usage and production of smart connected cars to transform its automotive industry by 2025.
Furthermore, the growth in this region is also due to the presence of key market players such as Toyota, Hyundai Motor Company, Honda Motor Company and many others in this region. Cheap availability of labour in highly populated countries such as India and China, along with strong technological capabilities in countries such as Japan and South Korea makes this an ideal investment option for any OEM. In addition, there is a rapid demand of AI enabled autonomous cars in country like Japan where there is rising problem of old population. All these factors are attributing to the growth of AI in automotive market in this region.
However, the outbreak of COVID-19 has put immense pressure on the economic scenario of several major countries including the India, U.S., China, and U.K. among others, pushing these countries into a severe recession. Numerous employment losses and incessant pay cuts have reduced the disposable income of consumers, and shifting their focus on essential products. Because to this, the automotive industry has taken a major hit and negatively impacting the growth of AI in the automotive market.
Global AI in automotive market By Application Outlook (Revenue, USD Million, 2021-2027)
Global AI in automotive market By Offering Outlook (Revenue, USD Million, 2021-2027)
Global AI in automotive market By Technology Outlook (Revenue, USD Million, 2021-2027)
Global AI in automotive market By Deployment Outlook (Revenue, USD Million, 2021-2027)
Global AI in automotive market By Device Outlook (Revenue, USD Million, 2021-2027)
Global AI in automotive market By Component Outlook (Revenue, USD Million, 2021-2027)
Global AI in automotive market By Vehicle Type Outlook (Revenue, USD Million, 2021-2027)
List of Key Players of Global AI in automotive market