Passenger Cars Embedded System Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Software, Hardware), By Component Type (Transceivers, Sensors, Memory Devices, Microcontrollers) By Region, By Competition, 2018-2028
Published Date: April - 2025 | Publisher: MIR | No of Pages: 320 | Industry: Automotive | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request Customization| Forecast Period | 2024-2028 |
| Market Size (2022) | USD 4.5 billion |
| CAGR (2023-2028) | 5.99% |
| Fastest Growing Segment | Sensors |
| Largest Market | Asia-Pacific |
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Market Overview
Global Passenger Cars Embedded System Market is worth USD 4.5 Billion in 2022 and is expected to forecast strong growth during the forecast period with a CAGR of 5.99% from 2022 to 2028.
An embedded system is a combination of computer hardware and software with a specific function that is utilized to enhance productivity and reduce pollution. The embedded system is an essential part of the anti-lock braking system, electronic stability control, traction control, and four-wheel drive systems in cars. Microcontrollers, integrated circuits, central processing units, and other hardware components are part of embedded systems, whereas operating systems such as Linux, Windows, Java, and others are part of the software. Reliability, adaptability, toughness, quickness, accuracy, and efficiency of the vehicles are enhanced through embedded systems. Market growth has been facilitated by the application of intelligent devices, GPS systems, parking sensors, and multimedia devices along with government policies to lower emissions and enhance fuel efficiency.
Key Market Drivers
Advancements in Connectivity and Infotainment Systems
Increasing Integration of Advanced Driver Assistance Systems (ADAS)
The integration of advanced driver assistance systems (ADAS) is a pivotal driver for embedded systems in passenger cars. ADAS technologies, such as adaptive cruise control, lane-keeping assist, blind-spot monitoring, and automated emergency braking, rely on embedded sensors and computing power to enhance vehicle safety and assist drivers. ADAS features leverage embedded systems to monitor the vehicle's surroundings and provide real-time warnings or interventions to prevent accidents. This driver assists in mitigating the risks associated with human error. Embedded systems play a vital role in the transition toward autonomous driving. These systems enable features like highway autopilot and advanced parking assistance, which are steppingstones toward fully autonomous vehicles. Governments and safety organizations worldwide are advocating for the adoption of ADAS technologies. This regulatory support encourages automakers to integrate ADAS into their vehicles, driving market growth. Embedded systems are increasingly implementing data fusion techniques to combine information from multiple sensors, such as cameras, radar, lidar, and ultrasonic sensors. This fusion enhances the accuracy and reliability of ADAS features.
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Electrification and Hybridization of Vehicles
The global push toward electrification and hybridization is a significant driver for embedded systems in passenger cars. Electric vehicles (EVs) and hybrid vehicles rely heavily on embedded systems for managing electric powertrains, battery management, and energy efficiency. Embedded systems are crucial for monitoring and managing the health and performance of electric vehicle batteries. Battery management systems (BMS) optimize charging, discharging, and thermal management for improved efficiency and battery life. Hybrid vehicles employ embedded systems to capture and store energy during regenerative braking. This energy recovery mechanism enhances fuel efficiency by converting kinetic energy into stored electrical energy. Embedded systems in EVs facilitate seamless integration with charging infrastructure, enabling fast-charging capabilities, monitoring charging status, and optimizing charging times. This trend supports the growth of electric mobility. Advanced embedded systems analyze driving conditions, traffic, and driver behavior to optimize energy consumption and maximize the driving range of electric vehicles. Real-time data processing and predictive algorithms contribute to efficient electric propulsion.
Autonomous Driving and Sensor Fusion
The pursuit of autonomous driving capabilities is a driving force behind embedded systems in passenger cars. Autonomous vehicles rely on a combination of sensors, including cameras, radar, lidar, ultrasonic sensors, and GPS, all managed by embedded systems, to perceive their environment and make driving decisions. Autonomous vehicles depend on sensor fusion, which involves combining data from multiple sensors to create a comprehensive view of the vehicle's surroundings. Embedded systems process this data, enabling accurate perception and decision-making. Embedded systems are incorporating powerful computing platforms, including graphics processing units (GPUs) and specialized AI processors, to process vast amounts of sensor data in real-time. This computational capability is crucial for safe autonomous driving. Embedded systems are evolving to support various levels of autonomous driving, from advanced driver assistance (Level 2) to fully autonomous driving (Level 5). This progression requires increased processing capabilities and redundancy in embedded systems. Ensuring the safety of autonomous vehicles is paramount. Embedded systems must incorporate redundancy and fail-safe mechanisms to mitigate the risk of system failures, adding complexity to system design.
Sustainability and Green Technologies
Environmental sustainability and green technologies are significant drivers for embedded systems in passenger cars. Automakers are committed to reducing the carbon footprint of vehicles, and embedded systems play a role in achieving energy efficiency and eco-friendly design. Embedded systems are being optimized to minimize power consumption, especially in electric and hybrid vehicles. This trend extends to the efficient management of HVAC systems, lighting, and other vehicle components to reduce energy usage. Automakers are increasingly using sustainable and recyclable materials in embedded systems and vehicle interiors. This includes components such as dashboard displays, upholstery, and trim made from eco-conscious materials. Embedded systems incorporate features that promote eco-driving habits, such as real-time feedback on fuel-efficient driving behaviors, route optimization for reduced emissions, and energy-saving modes. Sustainability trends extend to the production and end-of-life management of embedded systems. Manufacturers are adopting eco-friendly production processes and considering recyclability and disposal in their design choices.
Key Market Challenges
Fast Technological Advances and Complexity of Integration
One of the key challenges within the passenger cars embedded system market on a global scale is the rate at which technology advances and the complexity of incorporating such technology into automobiles. With customer demand for sophisticated features including connectivity, infotainment, driver assistance, and autonomous capabilities on the rise, manufacturers are faced with the task of delivering innovative solutions to the market. The onus is thus on product manufacturers to continuously invest in R&D in order to match or surpass the pace of competitors.
Merging different embedded systems, with their respective hardware and software elements, into a unified and harmonious vehicle architecture is a challenging task. Compatibility and interoperability among these systems are important for a seamless user experience and safety. Software plays a major role in contemporary vehicles to manage different functions, and this makes it possible for software-related problems, such as bugs, vulnerabilities, and even possible cybersecurity threats, to occur. Maintaining the security and trustworthiness of embedded system software is a continuous problem. Customer demand compels the regular introduction of new car models with new technology. This fast cycle can create difficulties in product lifecycle management for embedded systems, such as procuring parts and supporting older vehicles. In order to cope with the changing picture of embedded systems, car manufacturers and suppliers require a qualified workforce. It is difficult to attract and retain talent with knowledge in electronics, software engineering, and cybersecurity.
Connectivity and Data Privacy
The growing connectivity of passenger vehicles, facilitated by embedded systems, creates data privacy and cybersecurity concerns. Contemporary cars are rolling computers, gathering and sending enormous amounts of data. As convenient as connectivity increases user experiences and facilitates features such as over-the-air updates and remote diagnostics, it also raises risks that unwanted individuals can misuse. Safeguarding sensitive customer data and defending against vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication threats is critically important. The theft of sensitive data can create catastrophic consequences in the form of identity theft as well as unwarranted vehicle function access. As governments across the globe roll out data privacy rules such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA), vehicle manufacturers and suppliers have to become compliant and navigate a multifaceted legal environment. Establishing and preserving the trust of consumers in the security of embedded systems is critical. Notorious cybersecurity breaches can damage trust in connected cars, translating to sales and brand value loss.
Evolving Regulatory Landscape
The regulatory landscape for passenger vehicles is changing every day, with governments across the globe implementing new regulations on emissions, safety, cybersecurity, and data privacy. The ever-changing environment creates a number of challenges for vehicle manufacturers and providers of embedded systems. More stringent emissions regulations are propelling the demand for electric and hybrid vehicles. Embedded systems have to accommodate these new powertrains while being compliant with emissions regulations, which will differ markedly by geography. To ensure that embedded systems comply with changing safety regulations, including those pertaining to autonomous driving, it involves significant investments in R&D and extensive testing. Certification processes for sophisticated safety features can take time and involve expense. While governments are imposing regulations to necessitate cybersecurity capabilities and incident reporting as connected vehicle cybersecurity threats intensify, ensuring compliance is indispensable but difficult. Data privacy legislation calls for automakers and providers of embedded systems to come up with data gathering, storage, and sharing processes in compliance with legislation. This is involved in holding a large number of user data securely and openly.
Supply Chain Disruptions
The worldwide passenger cars embedded system market is prone to supply chain disruptions, as witnessed in recent experiences such as the COVID-19 pandemic and chip shortages. These disruptions have a cascading influence on vehicle production and delivery with embedded systems. The automotive sector utilizes extensive semiconductor components for embedded systems. Disruption to the semiconductor supply chain, like the recent shortage, can cause production to slow down and costs to rise. Supply chain disruptions due to transportation, logistics, and border control can affect the on-time delivery of components and finished vehicles. The automotive sector usually adopts just-in-time manufacturing strategies to minimize inventory expenses. But this makes the manufacturers susceptible to supply chain disruptions. Diversifying the supply base can assist in offsetting supply chain risks. But this may be difficult, as not all suppliers might have the stringent quality and reliability standards of embedded systems.
Consumer Expectations and Competition
Meeting customers' expectations for leading-edge features and experiences in an overcrowded market is a continuous challenge for automakers and embedded system suppliers. Customers want more features such as advanced infotainment, connectivity, autonomy capabilities, and electric powertrains. Meeting customers' needs for a multitude of features contributes to feature overload, which makes car interfaces complicated and distracting. Balancing the right proportion is crucial. Since customers demand more functionalities, manufacturers need to keep the costs in check. This is achieved through lean design and production processes to avoid cost inflation. Providing a uniform and intuitive user experience across disparate embedded systems like infotainment, navigation, and driver assist is a great challenge. Confusing or awkward interfaces can irritate users. In a very competitive market, manufacturers and providers of embedded systems need to make their products and services unique. This requires constant innovation and a deep understanding of consumer preferences.
Key Market Trends
Connectivity and Infotainment Evolution
One of the leading trends in the worldwide passenger cars embedded system market is the fast development of connectivity and infotainment systems. Contemporary cars are progressively getting connected, as embedded systems empower functionalities like in-car Wi-Fi, real-time navigation, smartphone connection (i.e., Apple CarPlay and Android Auto), and OTA software updates. Embedded systems are making seamless internet connectivity possible, providing customers with a variety of services from listening to music and watching videos to up-to-the-minute traffic information and remote vehicle monitoring. Infotainment systems have emerged as a hotbed of innovation, with more expansive touchscreen screens, natural language voice recognition, and innovative user interfaces. These systems are at the heart of the in-car experience and are key to driver and passenger satisfaction. Automakers are increasingly leveraging embedded systems to provide OTA software updates, allowing for ongoing improvement of vehicle performance, security, and feature sets. This trend minimizes the necessity for physical recalls and service center visits. Embedded systems are integrated to work effortlessly with smartphones and smart devices so that drivers and passengers can live their digital life from within the vehicle. Integration provides enhanced convenience and productivity for on-road driving.
Advanced Driver Assistance Systems (ADAS) Integration
Embedding advanced driver assistance systems (ADAS) into embedded systems is a prominent trend in the automotive market. ADAS technologies such as adaptive cruise control, lane-keeping assist, blind-spot monitoring, and automated emergency braking depend on embedded sensors and compute power to augment vehicle safety and support drivers. ADAS capabilities take advantage of embedded sensors such as cameras, radar, and lidar to observe the surrounding environment of a vehicle and provide warnings or interventions to avoid crashes. The shift towards autonomous driving is dependent mostly on these embedded systems. Most embedded systems today come with features that enable semi-autonomous driving capabilities, including highway autopilot and advanced parking systems. These capabilities are progressively lowering the driver's workload and leading to safer driving experiences. Governments and safety associations across the globe are advocating for the implementation of ADAS technologies. This reality requires embedded systems to be capable of keeping up with changing safety regulations and standards. Data fusion methods that pool data from two or more sensors are becoming a common feature of embedded systems for increasing the precision and reliability of ADAS capabilities. This technological trend enhances embedded safety system performance.
Electrification and Hybridization
Embedded systems are in the vanguard of the ongoing transformation of the automotive sector into an electrification age. Electric cars and hybrid cars make use of embedded systems for handling electric drive-trains, battery management, and energy efficiency. Embedded systems also have an essential role to monitor and handle electric vehicle battery health and performance. Battery management systems (BMS) ensure charge, discharge, and thermal handling for greater efficiency and battery longevity. Hybrid vehicles utilize embedded systems to harness energy during regenerative braking and hold it back for later usage. These systems optimize fuel efficiency by harnessing kinetic energy and storing it as electrical energy. Embedded systems in electric vehicles connect to charging infrastructure to provide fast-charging, track charging status, and optimize charging time. This trend complements the development of electric mobility. Sophisticated embedded systems scan driving conditions, traffic, and driver behavior to optimize energy use and extend the driving range of electric vehicles. Real-time data processing and forecast algorithms are adding to effective electric propulsion.
Autonomous Driving and Sensor Fusion
The quest for autonomous driving is a revolutionary wave in the world passenger cars embedded system market. Embedded systems are changing to facilitate greater levels of automation, and sensor fusion is a major feature of this movement. Autonomous cars are dependent on an array of sensors, such as cameras, radar, lidar, ultrasonic sensors, and GPS, to sense their environment. Embedded systems process and fuse data from the sensors to present a complete image of the environment around the car. To deal with the high volume of sensor data in real-time, embedded systems are introducing high-performance computing platforms, such as GPUs and dedicated AI processors. These systems facilitate swift decision-making and path planning. Embedded systems are advancing to support multiple levels of autonomous driving, ranging from advanced driver assistance (Level 2) to completely autonomous driving (Level 5). The advance to higher levels of autonomy needs embedded systems that have greater processing capacity and redundancy. Autonomous vehicle safety is given the highest importance. Embedded systems need to have redundancy and fail-safe features to reduce the risk of system failure.
Sustainability and Green Technologies
Environmental sustainability is a key trend influencing embedded systems in passenger vehicles. Car manufacturers are concentrating on minimizing the carbon footprint of vehicles by optimizing embedded systems for energy efficiency and using environmentally friendly materials. Embedded systems are being optimized to reduce power consumption, particularly in electric and hybrid vehicles. This trend is extended to the effective control of HVAC systems, lights, and other vehicle components. Automotive manufacturers are also adopting sustainable and recyclable materials for embedded systems and interior components. These include materials such as dashboard displays, upholstery, and trim made from sustainable material. Embedded systems are also adopting features that encourage eco-driver behavior, including feedback on fuel-efficient driving behavior in real-time, route optimization for lower emissions, and energy-saving modes. Trends towards sustainability apply to production and end-of-life treatment of embedded systems. Companies are taking environmentally friendly production practices and recyclability and final disposal into account in their design considerations.
Segmental Insights
Type Analysis
In 2022, the automotive embedded system market share is dominated by the embedded software sector. Advanced software solutions are necessary for features like advanced driver assistance systems (ADAS), vehicle entertainment, connectivity, and autonomous driving. For instance, Tesla's Autopilot system makes use of integrated software to allow for semi-autonomous driving. Automakers must constantly innovate to meet changing consumer demands for entertainment, convenience, and safety. As a result, there is an increasing demand for embedded software to enable these cutting-edge features in contemporary automobiles.
Automotive embedded software solutions make it possible to anticipate maintenance needs and avert collisions. Additionally, the advent of connected cars is pressuring automakers to enhance their embedded automotive software development capabilities to bridge the gap between a vehicle and a mobility ecosystem, further delivering improvements in vehicle performance based on in-vehicle and beyond Vehicle data.
Regional Insights
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In terms of revenue, the Asia Pacific automotive embedded system market had 35% of the market in 2022. The use of embedded systems is being driven by rising customer demand for modern cars with amenities like entertainment, networking, and driver aid systems. Regional expansion will be aided by the rise of electric vehicles in China, where businesses like NIO are incorporating sophisticated embedded systems for battery management and autonomous capabilities. Additionally, the region's growing technological know-how, manufacturing skills, and government endeavors to promote electric and connected automobiles helps the APAC embedded systems market, which is booming.
The market for electric and hybrid vehicles is expected to expand in North America as it is expected to have the quickest rate of development. In North America, automakers give a specialized research center their subsystem specifications directly, and the center then competes to come up with a solution for the automakers. The actualization of these subsystems, including the hardware and software components, is then the responsibility of the selected providers. The end products are installed into the cars by the automakers, or original equipment manufacturers, who receive the results as input. Governments in North America, as opposed to other regions, facilitate the robust integration of the entire process. Consequently, the Automotive Embedded System Market in North America has a bright future.
Recent Developments
- Inteland Magna International will collaborate to create the newest vehicle embeddedsystems in February 2023. The alliance will concentrate on creating safe,high-performance embedded systems for ADAS, infotainment, and autonomousvehicles.
- Apartnership on next-generation cockpit technology had been announced in January2021 by Qualcomm technology, Inc. and DENSO Corporation, a QualcommIncorporated subsidiary. The usability of in-car entertainment and integratedcockpit systems and products will be improved, and DENSO will provide in-carsolution technologies for these systems.
- Abrand-new 2021 voice-controlled dash cam series with Live View monitoring andautomated video storage was announced in April 2021 by Garmin International,Inc., a subsidiary of Garmin Ltd., to help drivers document incidents.
Key Market Players
- Continental AG
- DensoCorporation
- GarminLtd
- HarmanInternational
- InfineonTechnologies AG
- RobertBosch GmbH
- DelphiTechnologies
- MitsubishiElectric Corporation
- JohnsonElectric Holdings Limited
- NXPSemiconductor
- TexasInstruments Incorporated
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