New vehicle tech will be worth $1.6 trillion by 2034

These advancements are creating an estimated $1.6 trillion market opportunity by 2034, a substantial increase from the market size in 2023. IDTechEx's new report, ‘Future Automotive Technologies 2024-2034: Applications, Megatrends, Forecasts’, consolidates various research findings into a comprehensive overview of the major shifts and prospects in the automotive sector. The report anticipates a considerable portion of this market potential to stem from components needed for electrification and automation, with services related to autonomous and connected vehicles predicted to experience the most growth.

In the realm of autonomous cars, the industry is still in its nascent stages, with significant testing underway in the US and China. Recent incidents, such as those involving Cruise, indicate ongoing challenges. However, there are promising developments. For instance, Waymo announced in December that it had completed 7 million driverless miles across various cities and reported a significantly lower likelihood of accident involvement compared to human drivers. Despite these advancements, the sector faces scrutiny and will need time to gain regulatory approval and public trust. Nonetheless, the next decade is expected to witness substantial growth in autonomous mobility-as-a-service (MaaS), with services expanding globally and potentially generating significant revenue.

Connected vehicles, in contrast, have already become a staple in the automotive industry. Recent years have seen manufacturers introducing new revenue models like feature-as-a-service (FaaS), allowing customers to subscribe to specific vehicle features. The report from IDTechEx suggests that these models will become more comprehensive and intricate over the next ten years. The annual revenue from connected and software-defined vehicles is projected to surpass $700 billion.

Given the early stages but anticipated rapid growth of autonomous mobility and connected vehicle services, these areas are garnering significant interest in the automotive industry. IDTechEx predicts a compound annual growth rate (CAGR) of 44.4% in revenue from automotive technology services between 2023 and 2033.

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

Regarding components for future automotive technologies, electrification, automation, and in-cabin sensing are opening new markets and creating lucrative opportunities. The electric vehicle market, encompassing motors, batteries, and power electronics, is expected to see a CAGR of 9.8% from 2023 to 2033. However, this is not the fastest-growing segment.

The shift towards electric powertrains and higher levels of automation has spurred demand for an array of sensors in vehicles, especially for advanced driver-assistance systems (ADAS) and autonomous vehicles. The need for external environmental sensing and internal occupant monitoring sensors is growing, as they are vital for ensuring safety when control transitions between autonomous systems and drivers. The report finds that the market for ADAS and autonomous vehicle sensors will grow at a CAGR of 13.7%, while the market for in-cabin monitoring sensors is expected to expand at a CAGR of 14.7% during the same period.

The pace of change in the automotive industry is accelerating, presenting new opportunities and avenues for revenue generation. IDTechEx's report, ‘Future Automotive Technologies 2024-2034: Applications, Megatrends, Forecasts’, offers valuable insights to help navigate and capitalise on these evolving trends.

For more information about this comprehensive IDTechEx report, including access to sample pages, please visit www.IDTechEx.com/FutureAutoTech.