November 5, 2024

New vehicle tech will be worth US$1.6 trillion by 2034

Autonomous driving, electric vehicles, connected and software-defined vehicles, and in-cabin monitoring are all megatrends reshaping the automotive industry. Together, these technologies combine to form a US$1.6-trillion opportunity by 2034 – nearly a tenfold increase compared to 2023.

The new report from IDTechEx, “Future Automotive Technologies 2024–2034: Applications, Megatrends, Forecasts”, brings together a portfolio of IDTechEx’s research into a single summary of the biggest changes and opportunities coming to the automotive industry. Much of this potential market revenue will be coming from components required for electrification and automation, but the report predicts that services offered by autonomous and connected vehicles have the most room for growth.

Autonomous driving brings hardware and service revenue opportunities. (Source: IDTechEx)

Service revenue from autonomous cars, connected cars and software-defined cars

Autonomous cars are still in the early days, with commercial testing starting to scale in the United States and China, but recent events involving Cruise show that the industry still needs to be apprehensive. There is hope, though.

In December, Waymo announced it had surpassed 7 million driverless miles across San Francisco, Los Angeles and Phoenix. In this time, it claims to have shown that its vehicles are 6.7 times less likely to be involved in an injury-causing accident compared to human drivers.

Despite this success, any incident should and will be scrutinised, and it will take time for regulations and public trust to build. But, over a 10-year horizon, there will be significant growth of autonomous mobility-as-a-service, with services spreading to hundreds of cities worldwide and generating hundreds of trillions of dollars in revenue. 

While autonomous cars are still finding their footing, connected vehicles are already a reality in the automotive industry. Over the past few years, IDTechEx has seen original equipment manufacturers bring in new revenue models based on a feature-as-a-service plan. This allows customers to subscribe to some features of their vehicle, like a heated steering wheel, as they need it. IDTechEx predicts that these models and the features on offer will grow more all-encompassing and complex over the next decade.

IDTechEx’s new report shows that the annual revenue generated through connected and software-defined vehicles will exceed US$700 billion. 

With both autonomous mobility services and connected vehicle services being in their infancy today but growing into hundred-billion-dollar industries in 10 years’ time, it is no wonder the automotive industry is so excited about them. IDTechEx finds that revenue generated through future automotive technology services will grow at a compound annual growth rate (CAGR) of 44.4% between 2023 and 2033. 

Components needed for future automotive technologies

Electrification, automation and in-cabin sensing are all creating new component markets and huge revenue opportunities for the automotive industry. In electric vehicles, the motor, battery and power electronics form a growing market that can expect to see a CAGR of 9.8% between 2023 and 2033. While this is the largest of the component markets, it is not the fastest growing. 

The modern transition to electric powertrains has been happening since the late ’00s, and while technologies like adaptive cruise control have been around longer, it’s only in the last five to 10 years that the industry has seen a new push for high levels of automation. Most new vehicles already have a small array of sensors, but new SAE level 3 and above technologies require many sensors per vehicle.

In addition to external sensors for environmental sensing, there is an even newer push for internal sensors for occupant and driver monitoring. These technologies will be crucial for keeping road users safe when autonomous systems need to hand off to the driver and be sure they are alert.

IDTechEx’s report finds that the Advanced Driver Assistance System and automated vehicle sensors market will grow at a CAGR of 13.7% between 2023 and 2033, and sensors for in-cabin monitoring will grow at a CAGR of 14.7% over the same period. 

The automotive industry is changing rapidly, with new opportunities and revenue streams evolving. IDTechEx’s new report can help navigate these changes and prosper.

Dr James Jeffs

Senior Technology Analyst

IDTechEx

Leave a Reply