Report Overview

Global Automotive Software Market is flourishing owing to the increasing use of cutting-edge technologies for cutting-edge UI, an increase in electronic applications in vehicles, rising demand for electric vehicles, and an increase in linked cars are all contributing factors.

Global Automotive Software Market - Industry Trends & Forecast Report 2028

Global Automotive Software Market was worth USD 20.57 billion in 2021 and is further projected to reach USD 58.42 billion by the year 2028, exhibiting a CAGR of 16.30% during the forecast period (2022-2028). The rapid expansion of the market is predominantly due to the entrance of new and cutting-edge technology into vehicle models to enhance functionality, safety, and the driving experience is fueling the market's growth on a global scale. There is a considerable need for automotive software solutions that provide high levels of user convenience and usefulness as a result of the addition of new features and the growing use of connection services for communication and real-time data transmission. Global uptake of automotive software is also favored by stringent regulations about safety and fuel efficiency coupled with the incorporation of electronics-based driving safety and comfort systems. Mandatory installation of e-call systems and rear-view cameras in all vehicles for reducing the chances of back-over accidents is bound to augment the market growth.

Automotive Software - Overview

Automotive software is a set of programmable instructions used in the execution of computer-based in-vehicle applications. This software is used in automobile embedded systems. The software is utilized in infotainment, body control, comfort, and telematics applications. Advanced Driver Assistance Systems (ADAS), safety and communication systems, and other automotive software-based applications. The growing demand for car-to-car communication is likely to boost the automotive software market in the coming years, and such applications have risen in popularity in recent years. Autonomous driving (AD), connected vehicles, powertrain electrification, and shared mobility (ACAS) are all trends in the automotive industry that are mutually reinforcing.

Global Automotive Software Market Forecast and Trends

Growth Drivers

Growing Popularity of Connected Automobile Services Propels the Automotive Software Market

For the participants in the connected car ecosystem, the rising number of connected automobiles has created new revenue-generating potential. Many non-automotive participants have jumped into the race of linked cars and autonomous driving to take advantage of the chance to generate income. Vehicles of the modern era are not mechanical moving devices. They currently make up about 40% of electronic information, and over 60% is predicted for them to exist in a few decades. Domain controllers, consolidated ECUs, HMIs, and AI for cutting-edge automotive applications like ADAS, telematics, engine management systems, etc. will make up the majority of the electronic content. For these applications to operate correctly, a considerable amount of code must be written. These applications are becoming more complex day by day as automobiles get more technologically sophisticated. As a result, systems require more coding to be coded, which raises the demand for embedded software. Thus, the market for automotive software is being driven by the rising number of connected vehicles.

Developments in 5G and AL Technologies drive Automotive Software Market

The need for software is being impacted by the architecture and design requirements rapid change. Wireless connectivity is necessary for the automotive software user experience. To boost the safety and effectiveness of vehicle software, various telecom companies are concentrating on the development of 5G as a solution. A high-tech connectivity platform is required because cars are evolving into network-aware, software-defined, and ultra-connected data-sending vehicles. The adoption of linked automobiles can be sped up by recognizing these implications as well as problems for the automotive industry. Due to their ability to communicate instantly, autonomous vehicles and automotive software would benefit greatly from 5G. South Korea and the EU, for example, have inked an agreement to collaborate on 5G development, with both investing USD 1.5 billion and USD 782 million, respectively, in funding local 5G projects. The United Kingdom has approved USD 78 million in financing for the 5G research center 5GIC. Working with automotive software generates massive amounts of data, which has contributed to the rise of AI in the automotive sector. Speech and gesture recognition, upgraded HMI, eye tracking, driver monitoring, radar-based detection units, virtual assistance, and engine control units all use artificial intelligence in automobile software. Deep learning is expected to grow at the fastest rate in the automotive industry when compared to other technologies, which will boost the market.

Use of ADAS Technology in Automobiles

Advanced driver assistance systems (ADAS), one of the key elements of self-driving technology, have undergone significant advancements in the automobile industry in recent years. The major automotive OEMs are also incorporating ADAS features into their next-generation vehicles due to the growing demand for advanced safety features like adaptive cruise control and autonomous emergency braking systems as well as stricter government regulations aimed at reducing traffic accidents. With features like lane monitoring, emergency braking, stability controls, and others that are mostly software-driven, ADAS technologies have greatly decreased the complexity of driving. For the creation of sophisticated ADAS software, several OEMs are forming alliances with software companies. As a result, the market for automobile software is expanding.

Restraints

Lack of Interconnected Infrastructure

The development of the automotive software sector is being hampered by the expensive infrastructure needed for 5G and wireless communication. The significant investment needed to create the requisite cloud, data analytics, and Internet of Things (IoT) software interaction platforms are expected to continue to be a major concern. Fast, flexible, and easy approaches are required for connected cars and ADAS solutions to update their software and add new material. The difficulty has been increasingly more apparent as upgrades call for quick connectivity solutions, which poor nations are still working to create. Software updates that are downloaded over the air (OTA) are given priority. Furthermore, without suitable connectivity options, manufacturers are adding new apps and services ranging from emergency calling services to traffic alert messages.

Impact of COVID-19 on Global Automotive Software Market

Since the COVID-19 issue began in China, where sales fell by 71% in February 2020, it has had a cascading effect on the worldwide automotive sector. By April 2020, sales had fallen by 47% in the US and by an astounding 80% in Europe. Due to a decrease in demand from significant vehicle manufacturers, this decreased market demand. However, automakers have noticed a steady increase in output levels as the supply chain began to regain some vigor from the third quarter of 2020 through the second quarter of 2021. Additionally, the crisis has hastened the digitization process that was already underway and brought about fast transformation throughout the mobility value chain. Production lines had been shut down for extended periods due to pandemic-related constraints, while non-manufacturing. While production lines had to be shut down for extended periods due to pandemic-related limitations, non-manufacturing processes were nonetheless managed by staff using secure connections via work-from-home or remote work models. During the crisis, automakers' production and research have benefited enormously from the usage of automobile system simulation software since it allowed them to continue developing new products even when they had little or no access to laboratories.

Global Automotive Software Market - By Software Layer

Based on the software layer, the Global Automotive Software Market is segmented into Operating System, Middleware, and Application Software. Among these, the operating system accounts for the largest share in the Global Automotive Software Market. A computer's operating system (OS) acts as a link between its hardware and application software. This restricts an application's use of hardware by requiring it to follow guidelines set forth by the operating system. Additionally, the operating system offers services that facilitate the creation and use of apps. These services include handling all of the hardware assets that the application will require, including memory loading, interacting with sensors and actuators, saving results, and carrying out a range of other tasks. The OS includes a wide range of additional software features, including middleware, libraries, and other system applications. The ability and ecology of the operating system are crucial for creating the platforms and applications that software-defined vehicles need

Global Automotive Software Market – By Application

Based on application, the Global Automotive Software Market is segmented into ADAS & Safety Systems, Body Control & Comfort System, Powertrain System, Infotainment System, Communication System, Vehicle Management & Telematics, Connected Services, Autonomous Driving, HMI Application, Biometrics, Remote Monitoring, and V2X System. During the projection period, the power train segment will be the fastest-growing application in the automotive software market. By leveraging onboard sensing and external connectivity via vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), and vehicle-to-everything (V2X) technologies, powertrain technology improves fuel efficiency and performance in conventional internal combustion engines, electric and hybrid vehicles. To avoid accelerations and develop an energy-efficient speed profile, use connected powertrain information from neighboring vehicles (V2V) and traffic lights (V2I). Integrate a powertrain dynamics layer on top of existing off-the-shelf navigational services to propose energy-efficient routes based on vehicle powertrain and driver behavior. All these factors boost the growth of the Global Automotive Software Market during the forecast period (2022-2028).

Global Automotive Software Market – By EV Application

Based on EV application, the Global Automotive Software Market is segmented into Charging Management, Battery Management, V2G, and Others. Among these, charging management accounts for the largest share in the Global Automotive Software Market. A complete software solution for managing EV charging operations, EV charging billing, energy management, EV driver management, and EV fleet management is an electric vehicle charging management system. It enables EV charging sector participants to reduce TCO, enhance profits, and improve EV drivers' charging experiences.

Global Automotive Software Market – By Region

Geographically, the Global Automotive Software Market is segmented into North America, Europe, Asia Pacific, Latin America, Middle East and Africa. An increase in demand for connected services, particularly in Japan, China, and South Korea, is driving the Asia-Pacific market. Since it produces the bulk of vehicles, it is the biggest market. Although there is much less adoption of automotive software in the region than in Europe and North America, the market is bigger since more cars are produced. An increase in demand for connected services, particularly in Japan, China, and South Korea, is driving the Asia-Pacific market. Since it produces the bulk of vehicles, it is the biggest market. Although compared to Europe and North America, the region has very low levels of automotive software penetration.

Competitive Landscape

The leading market players in the Global Automotive Software Market are Aimotive, Airbiquity, Apple, Aptiv plc, Autonet Mobile, Blackberry, Elektrobit, Google, Green Hills Software, Intel Corporation, Kpit Technologies, Luxoft, Microsoft Corporation, Nvidia, Nxp Semiconductor, Panasonic, Renesas Electronics, Rightware, Robert Bosch GmbH, Saferide Technologies Ltd, Siemens Industry Software Inc., Sigma Software Group, Vector Informatik, Wind River System, and other prominent players.

The Global Automotive Software Market is highly fragmented with the presence of several manufacturing companies in the country. The market leaders retain their supremacy by spending on research and development, incorporating cutting-edge technology into their goods, and releasing upgraded items for customers. Various tactics, including strategic alliances, agreements, mergers, and partnerships, are used.

Recent Development

• In February 2022, NXP Semiconductors launched the S32G GoldVIP to address the real-time and application development challenges of software-defined vehicles. This vehicle integration platform offers multiple value propositions for S32G processor evaluation, software development, and rapid prototyping efforts.

Scope of the Report

By Software Layer

• Operating System
• Middleware
• Application Software

By Application

• ADAS & Safety Systems
• Body Control & Comfort System
• Powertrain System
• Infotainment System
• Communication System
• Vehicle Management & Telematics
• Connected Services
• Autonomous Driving
• HMI Application
• Biometrics
• Remote Monitoring
• V2X System

By Vehicle Type

• Passenger Car
• LCV/MCV
• HCV

By EV Application

• Charging Management
• Battery Management
• V2G
• Others

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa