Automotive Electronics Market Size

Automotive Electronics Market Size

The global automotive electronics market size was estimated at USD 283.8 billion in 2024 and is expected to grow at a CAGR of 8.6% for the forecast period. Increasing penetration of electric vehicles, growing demand for Automated Driver Assistance Systems (ADAS) solutions, and regulatory & policy support from respective country governments boost the sales of automotive electronics.

The increasing number of electric cars globally reflects the rising demand for automotive electronics in the market. For instance, According to International Energy Agency (IEA), the global EV Outlook 2024 highlighted a rapid sales expansion in the electric cars nearing up-to 14 million units in 2023 which accounts for a 35% increase in the sales as compared to 2022. Due to the surge in sales, there are now 40 million electric vehicles on the road.
 

The incorporation of automotive electronics in electric cars is gaining traction and with the growing concept of connected cars particularly with the user’s phone. The complex systems of cars involve the anti-braking system (ABS), Electronic Brakeforce Distribution (EBD), cabin comfort systems and other related systems which open greater opportunities for the company’s manufacturing system to develop and progress in the market.

Automotive electronics refers to the market of electronic engineering with the focus on the development of electrical and electronic systems. The systems are generally installed in cars and are built in a way to withstand harsh operation conditions in the car. The electronic systems inside the car play a crucial role in the management of the engine through Engine Control Unit (ECU).
 

The ever-increasing ergonomics of the car and the accelerating form of consumer technology adoption rate depicts the transformation of the automotive industry. The contextual awareness of the car represents an important aspect of the automobile sector and highlights an area where the automotive electronics market is set to progress.
 

As the automotive ecosystem is witnessing the changes with quick adoption of digitalization, industry 4.0 is embracing the shift and implementing the power of AI in the manufacturing process. For example, in January 2025, Google brought its AI technology Gemini with Vertex AI for the new Mercedes-Benz CLA. The technology uses Google Map’s platform, the vast data base of 250 million places worldwide to provide information to the users and enhance the experience of driving. The connected features offered by automotive electronics leverages AI and help users to talk to vehicles in their natural language.