The automotive AI market is expected to be worth $7 billion by 2027 growing at a compound annual growth rate (CAGR) of 24.1% from 2022 to 2027 according to a report by MarketsandMarkets. Currently, the automotive AI market is worth $2.3 billion.
The growing adoption of advanced driver assistance systems technology by OEMs and the growing demand for an improved user experience are fueling this growth. Another factor is convenience features.
Major factors contributing to the growth of the market include increasing adoption of ADAS technology by OEMs, and growing demand for improved user experience and convenient features are some of the factors driving its growth.
The report notes that the human-machine interface for the automotive industry is much easier for the driver to control and use, which improves their experience. Previously, the electronic system of a vehicle represented only 1 to 2% of its cost. Growing demand for improved user experience has led to an increase in share from 8% to 12%.
With modern vehicles using driver assistance technology that relies primarily on AI, it’s no wonder the market is expected to reach $7 billion by 2027, which isn’t really that far off. .
The report also pointed out that autonomous vehicles are expected to be expensive due to the introduction of new commercialized technology systems. The high price, however, may restrain the growth of the automotive AI market simply because most of the advanced technologies are found in luxury and high-end cars that have a limited customer base; hinder the growth of the market.
An example is Tesla’s Full Self-Driving software which is scheduled to increase to $15,000 on September 5, 2022. Tesla has introduced a subscription plan for owners who prefer to pay a small amount each month instead of a one-time payment of $15,000 (or other). they may have to pay once it grows from there.) Tesla will also be allow other manufacturers to license FSD when the time comes.
In 2020, Elon Musk said the value of FSD would exceed $100,000 as the software nears full self-driving capability with regulatory approval.
The price of FSD will continue to rise as the software gets closer to full self-driving capability with regulatory approval. At this point, the value of the FSD is probably over $100,000.
— Elon Musk (@elonmusk) May 18, 2020
Another thing the report notes is that the software segment will hold a larger share of the automotive AI market, which it already does now. Deep learning is expected to hold the largest market share this year. Deep learning is used in voice recognition, fraud detection, voice search, object detection, advanced driver assistance systems, collision avoidance, etc.
You can read the report here.
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