The Artificial Intelligence (AI) in Automotive Market is expected to grow at a CAGR of 23.37%, reaching a market size of US$78.090 billion in 2030 from US$27.330 billion in 2025.
Artificial Intelligence (AI) technology is widely used in the automotive sector, from driverless automobiles, cabs, vehicles, and buses to industrial robots in manufacturing facilities. As a result, AI in the automotive industry has recently brought about significant developments. It also alters the support roles in research design and production. Manufacturers in the automotive industry are prioritizing the development of advanced AI solutions to support the rise of autonomous vehicles, recognizing the significance of AI applications.
Artificial intelligence in cars can help drivers prevent collisions. Some AI-enabled technologies or sensors beep or alarm drivers to help them prevent accidents while they are driving. One of the most effective uses of AI in the auto sector is autonomous or driverless vehicles. The application of artificial intelligence to the production of self-learning, self-driving cars in the automotive industry has propelled AI in the automotive market.
Autonomous or connected vehicles require an increasing amount of data to function independently. Utilizing AI cloud services is advantageous in this situation since it guarantees data accessibility when self-driving cars are needed. One of the most significant applications of AI in the automobile sector is digital insurance claiming, which streamlines the process of filing insurance claims after accidents. An increasing number of assembly lines are implementing AI robots. Industrial robots in the car production process are currently more productive than human workers. The robots can also perform similar duties due to the advanced technology incorporated by artificial intelligence.
Consumers in developing economies are choosing luxury categories and vehicles with high-tech features like enhanced driver assistance, automated systems, automatic parking, and emergency braking since they have more disposable income. AI is driving the newest innovations in the automotive sector, such as ridesharing and electrification. It aids fleet management and pricing, balancing supply and demand in shared mobility.
Through startup investments, automotive corporations hope to advance their AI capabilities and applications. Investments are concentrated in areas like customer/driver experience and mobility services, where they aim to expand scalability to stay competitive significantly. Phantom AI, a Silicon Valley business that offers a complete autonomous driving platform with computer vision, sensor fusion, and control capabilities, announced in February 2023 that it had raised $36.5 million in its Series C fundraising round. KT Investment and Renaissance Asset Management are among the round's existing investors, and InterVest, Shinhan GIB, and Samsung Ventures are newcomers. Phantom AI is committed to assisting clients in lowering accident rates and improving daily driving experiences while revealing ADAS's potential. The new round will be used to quicken the development of the current series production with important OEMs.
Based on geography, the AI automotive market is segmented into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. Since there is a sizable automotive and electronics industry in the Asia Pacific, the area maintains significant market shares for AI in the automotive sector. The presence of numerous major automakers, including Tata Motors and Hyundai, is causing the region's automobile industry to flourish.
Additionally, the AI automotive sector has benefited from these companies' efforts to promote AI. For instance, Hyundai Motor Group, a significant South Korean automaker, established the Boston Dynamics AI Institute in August 2022 to make fundamental advancements in AI, robotics, and intelligent machines. Initially, more than US$400 million was invested in the new institute by the group and Boston Dynamics. The institute intends to resolve the most significant and challenging issues preventing the development of advanced robotics as a research-first institution.
| Report Metric | Details |
|---|---|
| Total Market Size in 2026 | USD 27.330 billion |
| Total Market Size in 2031 | USD 78.090 billion |
| Growth Rate | 23.37% |
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Segmentation | Application, Offering, Technology, Geography |
| Geographical Segmentation | North America, South America, Europe, Middle East and Africa, Asia Pacific |
| Companies |
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