Automotive Software Market Surge Towards Solid Growth by 2027

Automotive Software Market by Application (ADAS & Safety, Connected Services, Autonomous Driving, HMI, V2X, Infotainment), Software Layer (OS, Middleware, Application), EV Application (Charging, Battery, V2G), Vehicle and Region - Global Forecast to 2027


Northbrook, IL 60062 -- (SBWIRE) -- 10/03/2022 -- The global Automotive Software Market size is projected to reach USD 40.1 billion by 2027 from USD 21.7 billion in 2022, at a CAGR of 13.1%. The growth of the market is driven by upcoming mandates such as regarding collision avoidance to drive the market.

Market Dynamics:

Drivers: Increasing adoption of connected car services will drive the automotive software market

An increasing number of connected cars has opened new revenue-generating opportunities for the stakeholders in the connected car ecosystem. A lot of non-automotive players have entered the race of connected cars and autonomous driving to leverage the opportunity of earning revenues. Today's vehicles are no more hardware-based moving machines. Today, they comprise almost40% of electronic content, which is expected to become more than 60% in the next few decades. Most electronic content will be dominated by domain controllers, consolidated ECUs, HMI, and AI for advanced vehicle applications like ADAS, telematics, engine management systems, etc. These applications need to be programmed with a vast number of lines of code for proper functioning. As vehicles get technically advanced day by day, the complexity of these applications is increasing. As a result, systems need to be programmed with more codes, which, in turn, increases the need for embedded software. Thus, the increasing number of connected cars is driving the market for automotive software.

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Opportunities: Future potential of 5G and AI will create in the automotive software market

Rapid evolution in design requirements, as well as architectures, are impacting the requirements of the software. The user experience of automotive software depends on wireless connectivity. To find the solution, different telecom company companies are focusing on the development of 5G to increase the safety as well as efficiency of automotive software. automobiles are becoming network-aware, software-defined and ultra-connected data transmitting vehicles and this needs a high-tech connectivity platform. Understanding these implications as well as challenges for the automotive sector can speed up the adoption of connected cars. 5G will be a key enabler for autonomous vehicles as well as automotive software as they will be able to communicate instantaneously. For example, South Korea and EU have signed a deal to work together on 5G development, investing USD 1.5 billion and USD 782 million, respectively, in funding the local 5G projects. In the United Kingdom, USD 78 million of funding has been approved for the 5G research facility 5GIC Dealing with automotive software results in the generation of humongous data which has led to the expansion of AI in the automotive sector. Artificial intelligence in automotive software for various purposes such as speech as well as gesture recognition, enhanced HMI, eye tracking, driver monitoring, radar-based detection units, virtual assistance, and engine control units. Deep learning used is estimated to be growing at the fastest rate as compared to other technologies in the automotive industry, which, will drive the automotive software market

V2X (Vehicle-to-Everything will be a key focus area of automotive software players for electric vehicles. V2X (Vehicle-to-Everything) is a communication technology that allows a vehicle to communicate with other vehicles, road users, and infrastructure. With the help of software and algorithms, V2X has become a reality. The software helps V2X technology improve traffic safety, fuel economy, and traffic congestion. These functions include V2G (Vehicle-to-Grid), V2P (Vehicle-to-Pedestrians), V2I (Vehicle-to-Infrastructure), V2V (Vehicle-to-Vehicle), and V2D (Vehicle-to-Devices). Two standards are used for V2X communication—IEEE 802.11p and C-V2X (Cellular V2X). Increasing vehicle safety concerns among the public and government, advancements in technology, and reduced cost of V2X technology are expected to drive the Automotive Software Market for V2X. The governments of various countries are working on the development of the V2X system. In April 2022, the US Department of Energy signed the Vehicle to Everything MOU, which brings together resources from the Department of Energy, Department of Energy, national labs, local and state governments, utilities as well as private entities for the evaluation of technical and economic feasibility of bidirectional charging into infrastructure.

Key Market Players:

The Automotive Software Market is dominated by a few global players and comprises several regional players. Some of the key players in the automotive software industry are Robert Bosch (Germany), NVIDIA (US), NXP (Netherlands), BlackBerry (Canada), Elektrobit (US), Renesas Electronics (Japan), Airbiquity (US), Wind River Systems (US)and Green Hills Software (US). These companies have strong distribution networks across the globe. Also, these companies broad product portfolio of software solutions for various applications. The major strategies adopted by these major players to retain their market position are new product developments, contracts & agreements, and collaborations.

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