Automotive Cloud Market is Estimated to Witness High Growth Owing to Growing Vehicle Connectivity Demand and Penetration of Advanced Computing
The global automotive cloud market is estimated to be valued at US$ 27.90 Bn in 2024, exhibiting a compound annual growth rate (CAGR) of 19.6% from 2024 to 2031. The Global Automotive Cloud Market is witnessing a high growth owing to the rising demand for connectivity in vehicles and advanced computing. Furthermore, increasing complexity of vehicle architectures necessitating cloud-based solutions is pushing the growth of the market.
Market Dynamics:
The global automotive cloud market is driven by the growing vehicle connectivity demand and the penetration of advanced computing. Connected vehicle technologies are gaining traction worldwide with increasing number of cars being equipped with in-built connectivity solutions. In addition, the growing demand for advanced technologies such as autonomous driving, predictive maintenance, and real-time vehicle telematics are propelling the uptake of automotive cloud platforms among original equipment manufacturer (OEMs). Cloud computing offers scalable, reliable, and cost-effective solutions to address data processing and storage needs of connected vehicles. The networking of millions of connected cars will generate huge volume of data that can be effectively managed and processed on the cloud with the help of advanced technologies like Artificial intelligence (AI), machine learning (ML) and big data analytics. This is expected to fuel the growth of the automotive cloud market during the forecast period.
Market Drivers
Growing Demand for Connected Vehicles is Driving the Automotive Cloud Market
Connected vehicles are gaining immense popularity as they offer various features like vehicle diagnostics, tracking, and navigation through cloud connectivity. The rising demand for enhanced in-vehicle experience is encouraging automakers to incorporate advanced cloud-based technologies in vehicles. This rapid growth of connected vehicles will fuel the adoption of automotive cloud platforms by OEMs to efficiently manage the vast amount of data generated through multiple vehicle systems and customer apps. Cloud connectivity provides seamless over-the-air software updates and remote vehicle access, improving overall vehicle performance and safety. Therefore, the increasing demand for connected vehicles is a key driver boosting the growth of the automotive cloud market.
Growing Adoption of Telematics Solutions is Driving the Automotive Cloud Market
Telematics is proving to be a game-changing technology for automakers as it enables various remote services. Cloud-based telematics solutions offer vehicle tracking, emergency calling, onboard diagnostics, and predictive maintenance capabilities. They also allow fleet managers to monitor vehicle health, driver behavior, fuel usage, and location in real-time. An increasing number of OEMs are integrating advanced telematics control units (TCUs) with cloud platforms to provide value-added services to commercial and private vehicle owners. For instance, General Motors, General Motors deployed OnStar Guardian telematics solution that uses cloud connectivity for safety, security and remote access features. This growing adoption of telematics among automakers and commercial fleets worldwide is propelling the automotive cloud market growth.
Market Restraints
Data Security and Privacy Concerns Restrict Market Growth
While automotive cloud facilitates seamless vehicle connectivity and access to various apps, there are genuine concerns around cybersecurity and privacy of sensitive vehicle data. As vehicles get smarter with the integration of advanced electronic control systems, they become more vulnerable to cyber-attacks. Any security breach of cloud servers can expose confidential vehicle diagnostics, location history, infotainment settings, and biometric data of owners. This poses threats in the form of vehicle hacking, identity theft, and privacy violations. The unclear legal frameworks around data protection further complicate matters. Therefore, data security and privacy risks restrict full-fledged adoption of automotive cloud platforms by OEMs and end users.
Lack of Standardization Hinders Market Growth
The lack of global standards for interoperability of automotive cloud platforms poses a major challenge for their seamless integration across different vehicle models and geographies. Since various OEMs develop proprietary cloud-based solutions, ensuring compatibility becomes difficult. This affects the development of innovative cloud-connected features and services in a collaborative way. Moreover, different regulatory norms across countries regarding data localization and cloud service policy also lack unification. This fragmented landscape delays the maturation of automotive cloud market by restricting cross-industry cooperation, large-scale pilots, and integrated mobility solutions on a common platform. Unless standardized protocols and regulatory frameworks are established, the market potential may not be fully realized.
Market Opportunities
Growing Demand for Advanced Mobility Services Presents Lucrative Opportunities
The growing popularity of Mobility as a Service (MaaS) concept is opening new revenue streams for automotive cloud platforms. Cloud-based models will play a pivotal role in enabling integrated transportation systems through connected fleets of shared vehicles available on demand. This presents an opportunity to provide unique MaaS offerings combining various public and private transport options through a single platform. Moreover, the evolution of autonomous vehicles will further fuel the demand for automotive cloud as it can remotely manage OTA updates, transport monitoring, and passenger services in driverless fleets. The automotive cloud can support advanced applications involving artificial intelligence, big data analytics for predictive maintenance, and computer vision for ADAS that have huge market potential.
Emerging Technology Trends Will Shape Future Opportunities
Emerging transformative technologies like 5G, edge computing, AI/ML, and Blockchain will significantly impact the automotive cloud landscape. 5G connectivity will enable cloud-based ultra-low latency applications inside vehicles. Edge computing deployments at localized network edges can optimize latency and data processing for safety-critical functions. AI and ML algorithms can accelerate data-driven services through automotive cloud platforms. Blockchain can facilitate secure authentication, car-sharing transactions, and usage-based insurance schemes. Therefore, innovating cloud-oriented solutions surrounding these trends presents lucrative opportunities for market leaders to cement their position and gain a competitive edge.
Link: https://www.coherentmarketinsights.com/market-insight/automotive-cloud-market-4746
Key Market Developments:
- In December 2023, Renesas Electronics Corporation, a leading provider of advanced semiconductor solutions, introduced an innovative, cloud-oriented development platform aimed at enhancing the workflow of automotive AI software developers. Named the AI Workbench, this extensive virtual development space provides professionals with the capabilities to create, model, and optimize automotive software via a cloud infrastructure. The new solution fosters greater productivity and precision among developers by integrating Microsoft Azure's services along with essential instruments such as Visual Studio Code and the Renesas' Software Development Kit.
- In November 2023, Salesforce, a cloud-based software company that provides customer relationship management (CRM) solutions and applications focused on sales, customer service, marketing automation, e-commerce, analytics, and application development, unveiled a series of enhancements to its Automotive Cloud platform with the goal of empowering automotive firms to better utilize data and AI. These enhancements are crafted to craft more tailored experiences within vehicles, streamline fleet operations, and make the processes of vehicle financing and leasing more efficient. The platform's aim is to consolidate disparate data streams, such as vehicle diagnostics, maintenance logs, and customer profiles, to provide actionable intelligence and customized interactions for vehicle users in real time.
- In March 2022, Wipro Limited, a prominent global IT, consulting, and business process services company, introduced its "Cloud Car" platform. This innovative platform provides automobile manufacturers with an integrated, cloud-native software solution, backed by an end-to-end cybersecurity system, to accelerate innovation at a lower cost and ensure software-defined vehicles (SDVs) remain digitally relevant for years to come.
- In November 2021, Wipro, an Indian multinational corporation that provides information technology, consulting, and business process services, introduced Click-Shift-Drive, a cloud-based automotive e-commerce solution designed to streamline the car-buying process. This end-to-end solution enables automakers and dealers to offer a seamless experience, from research and loan approval to purchase and delivery, leveraging Salesforce technologies and augmented reality capabilities. Key features include rapid deployment in just eight weeks and the ability to cater to the growing demand for online car-buying, with 50% of car-buying journeys already beginning online.
Key Market Players:
Airbiquity Inc., Amazon Web Services, Inc., Apple (US), Blackberry Limited, Bosch (Germany), Continental AG (Germany), Denso Corporation, Delphi Automotive PLC, Ericsson AB, Harman International, Infor, LG Electronics, Microsoft, Oracle, Robert Bosch GmbH, Salesforce, SAP, ServiceNow, Sierra Wireless, and Tomtom International Bv
