Military Vehicle Simulations Market Report 2026

The military vehicle simulations market size has grown strongly in recent years. It will grow from $5.22 billion in 2025 to $5.65 billion in 2026 at a compound annual growth rate (CAGR) of 8.2%. The growth in the historic period can be attributed to increasing adoption of simulation-based training to reduce operational training costs, growth in demand for realistic vehicle cabin replicas enhancing driver preparedness, advancements in visual display systems improving training immersion, rising use of simulations for performance testing under diverse battlefield conditions, expansion of defense training programs requiring scalable simulation platforms.

The military vehicle simulations market size is expected to see strong growth in the next few years. It will grow to $7.67 billion in 2030 at a compound annual growth rate (CAGR) of 7.9%. The growth in the forecast period can be attributed to growing integration of artificial intelligence for adaptive and scenario-based simulation training, increasing demand for networked simulations enabling joint and multi-vehicle training environments, rising investment in virtual reality and augmented reality technologies to enhance realism, expansion of simulation-based readiness assessments for modernized military fleets, accelerating development of modular simulation systems allowing rapid configuration for multiple vehicle types. Major trends in the forecast period include increasing adoption of integrated multi-vehicle simulation suites, shift from live exercises to cost-optimized synthetic training environments, growing emphasis on interoperability and joint-force / multi-nation simulation, customization and localization of training scenarios to national doctrines and terrains, expansion of long-term simulation maintenance, upgrades, and support contracts.

The increase in geopolitical tensions is expected to drive growth in the military vehicle simulations market. These tensions arise from disputes or heightened disagreements between nations that can lead to military actions or sustained defense standoffs. Much of this friction is due to rising competition over vital resources like energy, rare earth elements, and water, as nations work to safeguard strategic interests amid global logistical uncertainties. Military vehicle simulations play a key role in strategic readiness by offering realistic environments for training and scenario simulation, enabling countries to prepare for complex situations without escalating conflicts. For example, according to a December 2024 report by the International Institute for Strategic Studies (IISS), global fatalities resulting from violent events rose by 37% between July 2023 and June 2024, nearing 200,000 in total. As a result, rising geopolitical tensions are supporting the growth of the military vehicle simulations market.

Leading firms in the military vehicle simulations market are pursuing strategic alliances to streamline operations and minimize costs. These partnerships are collaborative arrangements between companies to achieve mutual goals by combining expertise and infrastructure. In January 2025, Rheinmetall AG, a German technology company, formed a partnership with Bohemia Interactive Simulations (BISim), a military simulation provider based in the Czech Republic, to push the development of next-generation defense training technologies. The partnership focuses on delivering highly realistic, scalable, and interoperable training solutions across diverse mission profiles - from individual soldier training to integrated multi-force exercises. By merging BISim’s modular software with Rheinmetall’s practical defense systems, the collaboration aims to drive innovation in synthetic training and enhance efficiency, safety, and effectiveness in complex multi-domain operations.

In August 2025, Applied Virtual Simulation Pty Ltd, an Australia-based simulation technology company, acquired AFV Sim for an undisclosed amount. Through this acquisition, AVS aims to enhance its defense simulation capabilities by integrating AFV Sim’s expertise in armored vehicle control systems, thereby expanding its production capacity, global reach, and long-term customer support. AFV Sim is a UK-based provider of advanced simulation and control system technologies for armored vehicle training and defense applications.

Major companies operating in the military vehicle simulations market are Raytheon Technologies Corp., Boeing Co., Lockheed Martin Corporation, General Dynamics Corp., Northrop Grumman Corp., Collins Aerospace Companies, BAE Systems plc, Thales Group, L3Harris Technologies Inc., Leonardo S.p.A., ST Engineering Ltd., Rheinmetall AG, Israel Aerospace Industries Ltd., Saab AB, CAE Inc., FlightSafety International Inc., Arotech Corporation, FAAC Incorporated, Frasca International Inc., AVT Simulation Inc.

Asia-Pacific was the largest region in the military vehicle simulations market in 2025. The regions covered in the military vehicle simulations market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

Tariffs on electronic components, computing hardware, and specialized display systems are increasing overall system costs and extending lead times in the military vehicle simulations market, particularly for high-fidelity platforms and full mission simulators. These impacts are most pronounced in segments such as simulation platforms, visual display and tracking subsystems, and cloud-capable systems, and in regions that rely heavily on imported hardware and software integration, including parts of Asia-Pacific, Latin America, and Eastern Europe. However, tariffs are also encouraging regionalization of supply chains, localized manufacturing of simulator hardware, and increased investment in domestic integration capabilities, which can strengthen local simulation ecosystems and reduce long-term dependency on foreign suppliers.

The military vehicle simulations market research report is one of a series of new reports that provides military vehicle simulations market statistics, including military vehicle simulations industry global market size, regional shares, competitors with a military vehicle simulations market share, detailed military vehicle simulations market segments, market trends and opportunities, and any further data you may need to thrive in the military vehicle simulations industry. This military vehicle simulations market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

Military vehicle simulations involve the creation of digital or virtual environments that accurately emulate the functionalities, behaviors, and operational surroundings of defense transport systems. These simulations are crafted through sophisticated modeling techniques to simulate real-world scenarios, allowing for precise evaluation of vehicle performance and reactions across various conditions.

The primary categories within military vehicle simulations include military vehicle simulation platforms, military vehicle simulation systems, military vehicle simulation maintenance, among others. Military vehicle simulation platforms provide all-encompassing environments intended to offer immersive simulation experiences for military vehicle operations. These platforms are classified based on vehicle type, such as armored vehicles, trucks and transport vehicles, tanks, light tactical vehicles, and reconnaissance vehicles. They incorporate diverse technologies including artificial intelligence, augmented reality, virtual reality, cloud-based simulation, and data analytics and big data. Their applications span training and education, mission planning, operational support, research and development, as well as testing and evaluation, serving various end users like defense forces, government bodies, private contractors, academic institutions, and research facilities.

The countries covered in the military vehicle simulations market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The military vehicle simulations market consists of revenues earned by entities by providing services such as training systems integration, scenario generation, performance analysis, and consulting. The market value includes the value of related goods sold by the service provider or included within the service offering. The military vehicle simulations market also includes sales of visual display systems, vehicle cabin replicas, tracking devices, and audio systems. 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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