Automotive Cybersecurity Market Trends [2023-2028]

The study involved four major activities to estimate the current size of the automotive cybersecurity market [359 Pages Report]. Exhaustive secondary research was done to collect information on the market, the peer market, and model mapping. The next step was to validate these findings, assumptions, and sizing with the industry experts across value chains through primary research. The bottom-up and top-down approaches were employed to estimate the total market size. After that, market breakdown and data triangulation were used for determining the market size of segments and subsegments.

Published by MarketsandMarkets, 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%. The demand for automotive cybersecurity solutions is fueled by the increased use of electronics per vehicle, a growing number of connected cars, reinforcement of mandates by regulatory bodies for vehicle data protection, significantly growing global automotive V2X market, and the rising sales of electric vehicles globally.

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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 automotive cybersecurity 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 automotive cybersecurity 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.

ICE vehicles segment is expected to be the largest in automotive cybersecurity market during the forecast period

Modern ICE vehicles are equipped with various connected features, such as infotainment systems, GPS navigation, and wireless connectivity. These features introduce potential vulnerabilities that can be exploited by hackers to gain unauthorized access to the vehicle’s systems. Cybersecurity measures are necessary to protect against unauthorized control or manipulation of critical functions, ensuring the safety and privacy of the occupants. This, in turn, is expected to bolster the ICE vehicles segment of the automotive cybersecurity market during the forecast period.

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.

Germany to lead the automotive cybersecurity market in Europe

Germany is the largest automobile market in Europe. It is one of the most advanced and innovative automotive industries in the world. It is known for its engineering excellence and presence of automotive players such as Volkswagen, Audi, Mercedes-Benz, and Daimler, among others. In addition, Germany is one of the leading vehicle manufacturers in Europe, owing to the presence of OEMs and tier 1 companies. Luxury vehicle manufacturers like BMW, Volkswagen, and Mercedes Benz have their head offices in Germany. Germany is one of the countries in Europe to have agreed to follow WP.29 regulations for automotive cybersecurity, which will help accelerate the demand for automotive cybersecurity solutions in the country during the forecast period.

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. These companies have adopted strategies of new product development, expansions, collaborations, partnerships, and acquisitions to gain traction in the market. Collaborations were the most adopted strategy, among others.

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