Automotive Cybersecurity Market Size, Share, and Trends [2023-2028]

The global automotive cybersecurity market size is projected to grow from USD 2.5 billion in 2023 to USD 6.0 billion by 2028, at a CAGR of 18.5%. Increasing adoption of connected vehicles has in turn increased the electronic content per vehicle. This has eventually raised the vulnerability of a vehicle against a cyber-attack, which resulted in recall of vehicles by the reputaed automakers in the recent past. Thereby, the demand for automotive cybersecurity solutions are growing at a rapid pace all over the world.

Moreover, advent of software-defined vehicles in conjunction with growing cloud-based applications in automotive sector are also expected to create lucrative opportunities for the automotive cybersecurity market in the coming years globally.

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Automotive Cybersecurity Market Dynamics:

Driver: Electric vehicles more vulnerable to cyber attacks

Electric vehicles are equipped with advanced connected vehicle technology, which allows EVs to communicate with other vehicles, infrastructure, and various online services. This connectivity increases the vulnerability of vehicles to cyber threats. As EV sales rise, the need for robust cybersecurity solutions will become even more critical to protect these connected systems from potential attacks. As such, the global sales of EVs increased by 55% in 2022 to 10.5 million units from the previous year. China led the way with an 82% growth in new energy vehicle (NEV) sales, and BYD became the global sales leader.

The demand for automotive cybersecurity is likely to grow along with the growing demand for electric vehicles. Moreover, with reputed automakers such as BMW, General Motors, Volvo, Daimler, Stellantis, Toyota, and Volkswagen planning to either partially or completely phase out the production of ICE-powered vehicles by 2030, the demand for electric vehicles is expected to increase in turn, driving the demand for automotive cybersecurity solutions globally.

Opportunity: Advent of software-defined vehicles

The automotive sector has started shifting its focus toward software-centric vehicles. The features and functions of these vehicles are primarily enabled through automotive software. Today, most premium vehicles have up to 150 million lines of software codes, which are typically proportionate among hundreds of electronic control units (ECUs) and a rising number of cameras, RADAR, and light detection and ranging (LiDAR) devices, among others.

Software-defined vehicles have several advantages. For instance, software upgrades pertaining to vehicle infotainment systems, telematics, vehicle diagnostic systems, and others will require a trip to the dealership. However, with software-defined vehicles, customers will be able to receive over-the-air (OTA) updates that cover infotainment improvements, security patches, and the monitoring & tuning of core functionalities, such as powertrain and vehicle dynamics. This will increase the demand for software-defined vehicles, in turn creating growth opportunities for the automotive cybersecurity market during the forecast period.

Software segment is expected to witness significant growth rate in the global automotive cybersecurity market during the forecast period

The software segment is expected to have a larger share in the market during the forecast period. This is owing to the increasing penetration of connected vehicles, and rising adoption of ADAS features in vehicles. Thus, increasing new features in vehicles is likely to support the software segment of the market during the forecast period.

Asia Pacific and North America dominate the software segment of the market. The software segment is projected to grow at the highest rate in Asia Pacific during the forecast period. Automotive OEMs in Japan and South Korea are launching new vehicle models that are equipped with modern connectivity technologies. These OEMs specify their requirements and designs to vendors for the cybersecurity of their vehicles. Vehicle cybersecurity providers and Tier I suppliers develop the actual software as well as functional components for various vehicles.

Endpoint security segment is expected to have significant growth opportunities in global automotive cybesecurity market

The endpoint security segment is anticipated to have significant growth opportunities in Europe and Asia Pacific during the forecast period. Rising concerns pertaining to the safety and security in Europe and Asia Pacific regions are also likely to increase the demand for endpoint security solutions. New vehicles launched in the global market contain around 100 million lines of code and are typically deployed with complex software by automotive manufacturers/OEMs. Automotive OEMs are opting for endpoint security solutions in order to maintain the safety as well as security of a vehicle’s entire code base. All these aforementioned factors are expected to augment revenues for endpoint security segment of the automotive cybersecurity market in the foreseeable future.

Key Market Players:

The automotive cybersecurity market is dominated by global players such as Robert Bosch GmbH (Germany), Continental AG (Germany), Harman International (US), DENSO Corporation (Japan), and Aptiv PLC (Ireland), among others.

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