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2024
The global automotive software market for the year grew to $31.71 billion
At the end of 2024, the global automotive software market reached $31.71 billion. North America accounted for about a third of the total costs - $10.77 billion. Industry trends are addressed in the Fortune Business Insights survey published March 25, 2025.
The main drivers of the market are the introduction of autopilot technologies and the development of "connected" vehicles with access to. Internet Such vehicles are able to exchange data with each other in real time, road infrastructure and cloud platforms. This increases traffic safety, expands the functionality of machines, and also provides access to various multimedia services.
Automakers are rolling out modular software architectures that make it easier to upgrade and integrate new features. In this case, the elimination of detected shortcomings and the addition of additional capabilities can be carried out "over the air," for example, through a cellular network. This approach in many cases eliminates the need for motorists to visit service centers during recall campaigns. The growing demand for telematics systems for fleet management, vehicle use-based insurance and vehicle tracking is also driving the expansion of the industry.
Technological advances such as artificial intelligence and machine learning play an important role in the development of the market. AI algorithms are able to improve the accuracy and reliability of advanced driver assistance systems (ADAS), such as adaptive cruise control or lane retention. AI underlies autopilot tools: these systems form a comprehensive model of the surrounding space, conduct a safety assessment and predict the possible actions of other participants in the movement. Continuous improvement of autopilot software makes such platforms more reliable, which contributes to their commercial implementation, and therefore stimulates an increase in supplier revenue.
But there are also deterrents. Automotive software often collects and processes large amounts of personal data, which raises concerns about privacy and information protection. In addition, significant development costs are required. Failures in the operation of automotive software can have the most serious consequences, and therefore ensuring maximum reliability and trouble-free operation is of paramount importance, which requires careful testing and verification.
By the type of solutions, the market is segmented into application software, connecting software and operating systems. The first of these areas provided the largest revenue in 2024 - 51.7% of the total, or $16.39 billion. In terms of application, ADAS and security systems, infotainment systems and software for dashboards, engine and transmission control systems, etc. are distinguished. The products of the first of these categories brought the maximum income. Among the significant players in the global industry are named:
- BlackBerry;
- Kpit Technologies;
- Google;
- Airbiquity;
- Wind River Systems;
- Microsoft;
- Montavista Software;
- Robert Bosch;
- Intellias;
- Harman International.
In the future, Fortune Business Insights analysts believe, the market will remain positive. The compound percentage CAGR is expected to be 14.3%. As a result, by 2032, costs on a global scale could rise to $91.86 billion.[1]
MRI for auto. The first fully automatic machine troubleshooting station has started to work
In mid-July 2024, Hawaii launched the world's first artificial intelligence vehicle inspection system. The new system, launched at the BMW Center in Honolulu, uses MRI-like technology that performs a full scan of the vehicle to identify potential problems. After such a high-tech check, the system issues a full status report that can be easily sent to the client's mobile device. Read more here.
2022: Gartner names 5 top trends in automotive technology market
In mid-February 2022, analysts Gartner identified five major technology trends in the automotive sector. The study notes that as digital technology becomes a hallmark of the car, software it will become the main driver of profitability growth for automakers.
Gartner senior research director Pedro Pacheco noted that since 1922, automakers have concentrated on the mechanical side of car development and mostly left software to other companies, but in 2022, the goal of original equipment manufacturers (OEMs) will be to turn into technology or software companies. As for trends in automotive technology, they are as follows:
Automakers rethink their approach to finding equipment suppliers
Automakers are overestimating their long-standing just-in-time (JIT) inventory strategy, which has led to OEMs and Tier 1 suppliers not having buffer stocks to lean on during various chip shortages. As a result, automakers are reconsidering their relationship with chip makers and considering developing their own chips.
According to Gartner forecasts, by 2025, 50% of the 10 largest manufacturers of automotive components will develop their own chips and establish direct, strategic, long-term working relationships with chip companies, while abandoning JIT inventory management practices.
"'Digital giants integrate car into holistic ecosystem
In 2022, tech giants like Amazon, Google, Alibaba or Tencent will continually expand their presence in automotive technology. According to Gartner forecasts, by 2028 the 70% of cars sold will use the Android Automotive operating system, while as of February 2022 this figure is less than 1%. Gartner also says that since it is difficult to develop technologies and software on your own, automotive companies can either cooperate with digital giants, or use huge internal resources to achieve this mainly on their own.
Open data and open source collaboration models are gaining momentum
In 2021, several technology companies created open-source operating systems for car architecture and an open platform for electric vehicles. In 2022, this approach to adopting partnership models in the automotive sector will be strengthened. In addition, car companies will increasingly look at data in the same way as the tech world.
Established automakers expand OTA as a major digital revenue channel
In 2021, there were significant changes in the market for software for cars updated by air (OTA). As most automakers have updated vehicle hardware to allow for software upgrades, they will now begin moving to a services-based revenue model rather than asset sales.
By 2023, half of the top 10 automakers will offer unlocking and updating capabilities through software updates that can be purchased after the car is sold, according to Gartner analysts.
Autonomous vehicles - more regulations, but barriers to commercialization remain
Despite the improvement of sensor technologies, the complication of perception algorithms and the development of regulatory acts and standards, developers of autonomous vehicles continue to struggle to scale autonomous operations in various cities or geographical regions.
Automakers have begun announcing Level 3 autonomous vehicles and are working to introduce Level 4 autonomous trucks as well as commercial robotaxis. However, proving the safety and effectiveness of autonomous technologies takes a long time, and extensive real-world modeling and testing makes commercialization slow and costly. In addition, issues such as liability in the event of an accident, related legal and public considerations, such as how people would interact with AI-driven vehicles (AIs), exacerbate the problem. Gartner analysts predict that four times as many Level 4 autonomous robotaxis will operate globally by 2030 than taxis in 2022.[2]
2020: How technology is turning cars into smartphones
Tech giants have turned smartphones and TVs into permanent revenue streams. Now companies want to work with automakers to turn the car itself into a smartphone, according to a January 9, 2020 Reuters publication.
Ahead of the self-driving vehicle boom, the automotive and IT industries decided that machines should provide all the services available to users of conventional smartphones. These services - updates, performance improvements, unlocking new services - can meet the needs of manufacturers themselves, who need to find a stable source of income from long-sold products. Tech companies, in turn, see cars as an opportunity to expand their influence.
Automakers and tech giants unveiled new automotive technology and vehicle concepts in early 2020. Their developments, in particular, were shown by the leaders of the cloud market Amazon and Microsoft, who want to use the streams of data coming from connected cars (Connected Car).
General Motors President Mark Reuss has already spoken about the possibilities of generating income after selling a car using streaming services and wireless updates: "The potential is simply huge."
It is assumed that 2020 should be a turning point, with global automakers already looking for new sources of income amid slowing sales and rising costs due to tougher standards on emissions. Shares of veteran automakers like Ford Motor and GM fell significantly in 2019, while Tesla's market capitalization exceeded the combined value of Ford and GM for the first time.
Unsurprisingly, Tesla is already actively using a new type of service - it was this company that first proposed a model for wireless charging, and now asks customers to pay $6,000 to activate the autonomous driving option. Following Tesla and other automakers, they are looking to turn cars into modernizable, revenue-generating gadgets. And tech companies are teaming up with automakers to help them pull off the idea.
Chinese manufacturer Byton's new M-Byte sedan features a 48-inch dashboard screen, a handlebar display and a digital tablet for passengers. In the parking lot, the car can become an office with a videoconference function or a roadside cinema. And BMW Group demonstrated at the beginning of 2020 the concept of the future car with folding seats and an augmented reality windscreen.
Existing car processors are inefficient in terms of costs, so car component manufacturer Aptiv has proposed a new Smart Vehicle system that combines most of the functions of a gadget car. Harman, a division of Samsung Electronics, is also promoting a similar digital platform to control the flow of data inside and outside the vehicle. According to a company spokesman, a centralized system will also help protect the machine from hackers by restricting access to many gadgets.
Qualcomm, which already makes chips that allow cars to connect to the Internet, introduced a comprehensive computing system in 2020 that can control data flows and help the driver with control. At the same time, innovations offer automakers and their partners a variety of sources of income when updating functions, for example, in the form of unlocking a powerful audio stereo system built into the car initially, but not available without a subscription.[3]
Notes
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