The integration of AI helps in enhanced driver assistance, navigation, and infotainment features in vehicles. AI assists drivers in dealing with traffic jams, detecting open parking spaces, and recognizes objects on road. The global demand for self-driving vehicles is boosting adoption of AI across automotive sector.
The global Artificial Intelligence in Automotive Market is estimated to be valued at US$ 5.3 billion in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023-2031, as highlighted in a new report published by Coherent Market Insights.
The opportunity to develop self-driving cars is driving growth of artificial intelligence in automotive market. AI plays a vital role in developing autonomous vehicles as it helps the car in collecting data from sensors to detect pedestrians, read traffic signs, navigate roads without any human input. Leading automakers such as Tesla, BMW, Ford are heavily investing in AI research & development activities focused on self-driving technology. As the technology matures, fully autonomous vehicles are expected to eliminate traffic accidents caused due to human errors. Growing investments in AI startups and R&D by automakers aimed at developing autonomous driving features will boost the artificial intelligence in automotive market growth over the forecast period.
Threat of new entrants: The artificial intelligence in automotive market faces moderate threat as it involves high R&D costs and the need for technological expertise. However, the growing demand and opportunities are attracting new players.
Bargaining power of buyers: Buyers have moderate bargaining power due to the presence of numerous solution providers. However, industry-specific needs increase buyer dependence on select suppliers.
Bargaining power of suppliers: Major technology suppliers like Intel, Nvidia, and Qualcomm hold strong positions. However, ongoing collaboration helps balance supplier leverage.
Threat of new substitutes: Substitutes offer limited threat as artificial intelligence is opening new use cases in automotive. Integrated solutions also raise switching costs.
Competitive rivalry: The market sees intense rivalry due to focus on innovation, partnerships, and global expansion strategies by major players.
Strengths: Growing focus on driver assistance systems and infotainment and increasing collaborations between automakers and tech companies.
Weaknesses: High costs of developing capabilities, data privacy and security concerns over connected vehicles.
Opportunities: Application in autonomous driving, predictive transportation, personalized consumer services present a large addressable market.
Threats: Strict regulations along with technological limitations and overdependence on deep learning pose challenges.
The Global Artificial Intelligence In Automotive Market Size is expected to witness high growth.
North America holds the major share currently due to favorable policies and heavy investments in developing AI-based technologies by major players in the US and Canada. However, Asia Pacific is poised to grow at the fastest pace with increasing automotive production in China and initiatives to establish smart cities in several countries.
Key players operating in the artificial intelligence in automotive market are Intel, Nvidia, Ford, Tesla, BMW, Toyota, Volvo, General Motors, Audi, and Honda. Intel focuses on edge computing for ADAS and autonomous driving while Nvidia provides end-to-end solutions. Automakers are also undertaking strategic partnerships and making investments to strengthen in-house capabilities and lead innovation.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it