ARTIFICIAL INTELLIGENCE IN TRANSPORTATION MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

Global artificial intelligence in transportation market is estimated to be valued at US$ 2.11 Bn in 2024 and is expected to reach US$ 6.51 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 17.5% from 2024 to 2031.

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One of the major trends in the global artificial intelligence in transportation market is increasing adoption of autonomous vehicles. Automakers and technology companies are investing heavily in research and development of self-driving vehicles. These are focusing on developing advanced AI systems that can process data from sensors to detect objects and navigate through traffic without human intervention. The rise of connected and autonomous vehicles can transform transportation and boost demand for AI technologies in applications such as advanced driver assistance systems, autonomous passenger cars, and commercial vehicles. With further technological advancements, autonomous vehicles are poised to become mainstream over the next decade.

Increasing Demand for Autonomous Vehicles

The transportation sector is rapidly embracing automation technology due to growing demand for autonomous vehicles. Due to continuous advancements in artificial intelligence and its integration in self-driving features, people prefer  driverless vehicles. The freedom and flexibility provided by autonomous driving attracts many people. As people does not need to drive themselves, they can utilize travel time productively for work, rest or entertainment. This is especially valuable for growing elderly population who face challenges in operating vehicles.

Autonomous technology makes travel safer and more efficient. Automated vehicles minimize human error, thus, preventing majority of road accidents globally that occurs due to distraction or drunk driving. These can also communicate with each other to optimize traffic flow and reduce congestion. With AI-based navigation assistance, drive time and energy consumption is being cut down substantially. Leading automotive companies and tech giants are heavily investing to build fully autonomous cars that can handle all aspects of driving without human intervention. While the technology still needs to progress further to achieve level 5 automation, it is anticipated that autonomous vehicles will become mainstream and reshape the future of transportation.

For instance, in October 2023, Amazon, a multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence launched Automated Vehicle Inspection (AVI), a cutting-edge AI technology that is designed to ensure the safety and reliability of its delivery vans by detecting even the smallest anomalies, such as tire issues or body damage, before these become on-road problems.

Improving Mobility options with AI-enabled sharing services

Growing popularity of mobility-on-demand services like ridesharing and vehicle leasing has boosted adoption of AI technologies in transportation. These shared mobility services offer flexibility and affordability, thus, providing easy access to transportation when needed without getting private vehicle ownership. Startups and tech companies are leveraging AI to optimize shared fleets, facility demand-responsive operations and improve customer experience. By using predictive algorithms, autonomous vehicles can be dispatched efficiently based on short-term usage patterns. AI is also enhancing routing and navigation, thus, managing vehicle repositioning and payment settlements seamlessly.

This transition to shared platform-based models is fundamentally reshaping consumer transportation behaviour. It helps to address mobility needs of millennials who prefer access over ownership. These on-demand services also cater l to high-density urban developments which incentivize reduced private vehicle usage. As AI makes such services even more personalized, affordable and scalable, their popularity as an alternative to private transportation increases. This compel more traditional operators to incorporate new automated technologies and business approaches to stay relevant in a rapidly evolving marketplace.