Automotive Cybersecurity Market worth $6.0 billion by 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.

The study involved four major activities to estimate the current size of the automotive cybersecurity market. 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.

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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 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.

“The Asia pacific automotive cybersecurity market is projected to hold the largest share by 2028.”

Asia Pacific is estimated to account for the largest market share in 2023, followed by Europe and North America. Countries such as China, India, Japan, South Korea, and the Rest of Asia Pacific are considered under Asia Pacific for market analysis. One of the key factors driving the market growth in this region is the large production of passenger vehicles, coupled with the increasing penetration of connected cars and other advanced technologies. China and India are considered manufacturing hubs for the automotive industry. . In addition, the increasing purchasing power of the population and rising concerns over vehicle pollution have triggered the demand for electric vehicles and semi-autonomous vehicles in Asia Pacific. This in turn would also drive the market growth for automotive cybersecurity.

Key Market Players

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

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