Artificial Intelligence in Automotive Market Report 2026

The artificial intelligence in automotive market size has grown exponentially in recent years. It will grow from $17.51 billion in 2025 to $26.98 billion in 2026 at a compound annual growth rate (CAGR) of 54.1%. The growth in the historic period can be attributed to sensor technology evolution, demand for vehicle safety, automation in manufacturing, early ai software adoption, connected vehicle development.

The artificial intelligence in automotive market size is expected to see exponential growth in the next few years. It will grow to $149.04 billion in 2030 at a compound annual growth rate (CAGR) of 53.3%. The growth in the forecast period can be attributed to fully autonomous vehicle development, ai chip advancements, electric vehicle growth, smart mobility ecosystems, real-time vehicle analytics. Major trends in the forecast period include expansion of adas and autonomous features, integration of ai in vehicle manufacturing, growth of AI-based driver assistance, adoption of v2x communication, use of ai for predictive maintenance.

The growing demand for autonomous vehicles is expected to drive the growth of the artificial intelligence (AI) in automotive market. Autonomous vehicles are capable of sensing their environment, making decisions, and performing driving functions without human intervention. AI technologies enable these vehicles to interpret sensor data, control navigation, and ensure safe driving. For instance, in December 2024, the National Association of Insurance Commissioners projected that 4.5 million self-driving vehicles will be on U.S. roads by 2030. Consequently, the rising need for autonomous vehicles is fueling AI adoption in the automotive sector.

Leading companies in the automotive AI market are investing in the development of advanced AI-driven digital solutions to elevate vehicle safety, enrich the driving experience, and support autonomous driving capabilities. AI-based digital products in this sector incorporate artificial intelligence to deliver intelligent, automated, and personalized features within vehicles, enhancing both functionality and user experience. For example, in February 2024, Volkswagen Group, the German automotive giant, launched an in-house AI lab dedicated to designing and incubating AI-powered digital products, such as vehicle infotainment and navigation systems. Through this initiative, Volkswagen aims to enhance its product lineup by integrating AI technologies that offer increased value through features like advanced infotainment, predictive maintenance, navigation enhancements, and voice recognition capabilities. Additionally, the AI lab seeks to create a connected digital ecosystem that seamlessly integrates Volkswagen's vehicles with external technology platforms, positioning the company at the forefront of automotive innovation and smart mobility.

In August 2023, Tech Mahindra, an information technology services and consulting company based in India, established a partnership with Anyverse. The collaborative effort is geared towards expediting AI adoption in the automotive industry by simplifying the use of synthetic data for training, testing, and validating AI systems. Anyverse, a Spain-based hyperspectral synthetic data generation platform, specializes in accelerating the development of computer vision-based solutions for autonomous applications.

Major companies operating in the artificial intelligence in automotive market report include Alphabet Inc., Toyota Motor Corporation, Microsoft Corporation, Ford Motor Company, General Motors Company, Bayerische Motoren Werke AG, Honda Motor Co. Ltd., Tencent Holdings Ltd., Tesla Inc., Intel Corporation, The International Business Machines Corporation (IBM), Audi AG, Volvo Cars, AB Volvo, Qualcomm Technologies Inc., The Mercedes-Benz Group AG, Mitsubishi Electric, Uber Technologies Inc., Micron Technology Inc., NVIDIA Corporation, Harman International Industries Inc., Waymo LLC, Xilinx Inc., Argo AI, Cognata ltd.

North America was the largest region in the artificial intelligence in automotive market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence in automotive market report include Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the artificial intelligence in automotive market report include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The artificial intelligence in automotive market consists of revenues earned by entities by providing services such as autonomous driving systems, connected car services, predictive maintenance, customer service and support, cybersecurity solutions, and smart parking solutions. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence in automotive market includes sales of cameras, LiDAR, ultrasonic sensors, and radars. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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