Automotive Software Market Size - By Offering, By Vehicle, By Propulsion, By Application, By End Use, Growth Forecast, 2025 – 2034

Automotive Software Market Size

The global automotive software market size was valued at USD 18.1 billion in 2024 and is estimated to register a CAGR of 10.9% between 2025 and 2034. Connected cars that are on the rise and a growing focus on the vehicle's independence are vital components boosting the market expansion. Many experts, for example, Statista, foresee a remarkable growth in sales of vehicles that are at least a Level 3 of autonomy to go up by 2900%.
 

According to the firm, it will reach the final figure of 58 million units by 2030 compared to 2 million units in 2020. This surge indicates a potential opportunity in the market, which has to do with development of sophisticated software solutions to accommodate complex connectivity, data processing along with autonomous driving.
 

Also, the integration of additional software applications into the automotive systems, such as infotainment and powertrain management systems in the vehicle are additional contributors to the expansion of the market. The growth of vehicle electrification and connectivity also corresponds to the growth of the need for powerful software solutions managing these innovations. For example, BT Group and Tata Technologies plans to establish a automotive software and IT development hub in India in April 2024, seeking to develop software defined vehicles and automated driving technology.
 

Furthermore, in order to expand their worldwide reach, automakers are leveraging new software platforms aimed at improving vehicle performance while strengthening safety features. For example, in December 2024, NXP Semiconductors bought Aviva Links, hence expanding their automotive networking and connectivity portfolio through TaaS. This technology enables OEMs to create multi-gigabit asymmetrical APM links for multi-gigabit networks with the goal of achieving interoperable ASA-based telecom systems.
 

Automotive Software Market Trends

• The proliferation of interested in and usage of automotive vehicles across the globe as well as the greater need for them to have more safety features is driving the growth of automotive software market. The trend towards Software Defined Vehicles (SDVs) is changing the automotive industry since automakers are constantly developing new software programs into their vehicles for better user experiences. There is a growing demand for entertainment systems in vehicles and this has led to new innovations that foster better interaction between drivers the vehicles they drive. The global automotive infotainment market reached 27.3 USD billion in 2023 and is predicted to grow at a CAGR exceeding 6.5% from 2024 and 2032.
   
• There are several opportunities of growth in automotive software market due to the increasing focus into electric and autonomous vehicles. As more manufacturers transition to a greener environment, there will be an increasing demand for better power managing software for electric powertrains and autonomous vehicles.
   
• Statista estimates that by 2030, over 26% of the auto sales markets globally are likely to be electric. Furthermore, in the case of the United States, the size of the electric vehicle market was USD 119.8 billion between in the year 2024 and is expected to surge to over USD 450 billion by the year 2034, translating to a staggering CAGR of 13.7%.
   
• Various justifications exist as to why this is the case, and several reports also indicate the contemporary threats posed within the automotive software realm, such as cyber security threats. The automotive industry has emerged as one of the most vulnerable industries when it comes to cyber-attacks. Considering a global report of automotive cyber security published by Upstream Security in the year 2024, nearly ninety-five percent of cyber-attacks targeting the car manufacturing industries were remote attacks that occurred in the year 2023. There is a profound imperative for the car manufacturing realm to innovate low cost and efficient software solutions to mitigate such attacks while maintaining the integrity and privacy of the user.
   

Automotive Software Market Analysis

Based on offering, the automotive software market is divided into operating system, middleware, and application software. In 2024, the operating system segment was valued at over USD 5 billion.
 

• The role of operating systems in ensuring a perfect amalgamation of applications and hardware in the automotive sector has assumed a greater significance due to the intricacy that is always increasing concerning automotive functionalities. Companies are taking advantage of their proficiency in the development of new goods to keep pace with the changing trends. For example, in 2023, Tesla announced modifications to its operating system, enabling the modification of the vehicle performance in real-time, based on how the drivers behave and the surroundings.
   
• An upsurge in the demand of interface between different hardware and software components given rise to the adoption of middleware in the automotive software market. It supports the communication between diverse set of software applications. This is important with the increased level of interconnectivity of vehicles.
   
• The uptick in the consumers appetite for advanced infotainment, navigation, and connectivity, growth in the demand of application software which is dedicated to delivering a top-notch user experience to the users whenever they are in a vehicle, along with other factors are driving growth of the market. The differentiation in the applications that automotive consumers seek is pushing automakers to invest in more and more creative applications because today’s consumers expect to be connected in their vehicles.
   

Based on end use, the automotive software market is categorized into OEM and aftermarket. The OEM segment is anticipated to register a CAGR of over 9% from 2025 to 2034.
 

• Competitive conditions in the automotive software sector are set to be greatly influenced by the increasing investment efforts by the OEMs in advanced automotive software as well as the regulatory requirements that are imposed. In this area, vehicle manufacturers have shifted their R&D expenditures to the creation of the software that improves the vehicle and complements the user. For example, Hyundai made an announcement intending to put in fundings worth around USD 366 billion with an aim to enhance Korean economy through investments made in the SDVs market in 2025.
   
• Another set of emerging trends indicate that consumers have begun to actively source for aftermarket software solutions that are able to enhance the car features as well as performance. As many consumers seek to have their cars be distinct or unique in functionalities, aftermarket software solutions are readily available to optimize their performance.
   

Based on application, the automotive software market is segmented into safety systems, infotainment & telematics, powertrain & chassis, body control & comfort, and others. Infotainment & telematics segment dominated the market and accounted for over USD 4.5 billion in 2024.
 

• The expected growth in focus towards vehicle safety, and the compliance towards governmental regulations is expected to lead to growth in the purchase of advanced safety software solutions for automobiles. With stricter controls and regulations being put in place or becoming active, the focus towards use of proper safety software is continuously heightened to ensure vehicle weight compliance.
   
• The increasing demand for access and entertainment in vehicles is driving the development of infotainment and telematics systems that offer live information or direct engagement with users. Car manufacturers are, therefore, striving to manufacture integrated infotainment systems that focus on enhancing the user experience during driving.
   
• It is the demand for efficient diesel management and chassis management systems that encourages designers to develop additional software applications that help improve vehicle and fuel economy. When striving for maximum output and emissions minimization, manufacturers are increasingly likely to turn to advanced computerized solutions for management of powertrain processes.
   
• Growing consumer demand for high levels of comfort and convenience in vehicles is increasing the sales of software that controls body systems such as climate control and seat positioning. Car manufacturers are incorporating software applications in a bid to improve the comfort of these vehicles and the overall experience of driving.
   

Based on vehicles, the automotive software market is segmented into passenger cars and commercial vehicles. The passenger cars segment held a market share of around 10% in 2024.
 

• The growing popularity of passenger cars that come pre-installed with new technologies is accelerating the growth of the market. End users have adopted such modern technologies as connectivity, safety systems and infotainment in their cars. Manufacturers of passenger cars have incorporated sophisticated computer software into their vehicles including but not limited to over-the-air updates, self-driving features and enhanced personalized user experience.
   
• The analysis on the automotive software market indicates that it is growing in relevance alongside the increasing usage of modern technologies in commercial vehicles. With the increased technological sophistication of the commercial vehicles, there is a growing need for software that optimizes performance, safety and regulatory compliance.
   

North America dominated the global automotive software market with a major share of over 35% in 2024 and U.S. leads the market in region.
 

• In the commercial industry, the shift towards fuel efficient vehicles is increasing, especially with manufacturers homing in on making advancements in engine performance. In the years between 2025 and 2030, unit sales are estimated to rise by 1.30% and as a result the market volume is expected to reach as high as 15.65 million by 2030. These figures suggest that there will be an upward trend in the demand for vehicles. The trends were spotted by Statista recently.
   
• Moreover, the ADAS is important for the overall safety of the vehicle and any legal compliance. Satisfying the demand for fast and safe vehicles is becoming easy for automotive manufacturers since they are putting money into software that ensure the features are managed well. Smart software solutions are crucial for maintaining up with the increasing demand for cars with lots of technology in them from customers.
   

The automotive software market in Germany is expected to experience significant and promising growth from 2025 to 2034.
 

• The automotive software industry is in high demand, and this is to be blamed on the strong car industry that includes firms like Volkswagen, BMW, and Mercedes-Benz focusing on the emission reduction and vehicle efficiency. This situation has created a demand for better software solutions.
   
• Meeting the tough restrictions pertaining to emissions of the European Union is expected to take the design of piston pins to newer levels. Because these parts help to cut down on fuel use and emissions by lowering friction and increasing combustion efficiency, they let the engine function better.
   

The automotive software market in the China is anticipated to witness lucrative growth between 2025 and 2034.
 

• Automakers are paying more attention to the engine technology and investing in advanced piston pins which improve the engine’s performance. This is especially so as the need to address climate change increases and the need to reduce the carbon footprint increases too.
   
• The transition towards the adoption of hybrid and battery-operated cars is adding to the already increasing demand for advanced piston pins which are lightweight but deliver high power. The high-tech materials and designs would be adopted by the manufacturers to keep pace with the continuously evolving market.
   

The automotive software market in Brazil is expected to experience significant and promising growth from 2025 to 2034.
 

• Brazil is rapidly adopting the use advanced piston pins as the auto mobile manufacturers are giving priority to the production of vehicles which are fuel efficient keeping in mind the government incentive in this regard and the high fuel prices.
   
• As Brazil strives to achieve its goal of energy efficient transport, the demand for advanced piston pin solutions is expected to rise. These components lower fuel use and thus reduce emissions by reducing friction and better optimization of the combustion processes.
   

Automotive Software Market Share

Robert Bosch, NXP Semiconductors, and Magna International collectively hold a significant market share of over 12% in automotive software industry.
 

• Robert Bosch integrates innovation and technology, investing in the latest materials and manufacturing practices, targeted at creating bespoke automotive software solutions for its clients. The company continues to work on meeting and surpassing industry standards and consumer changing needs.
   
• NXP Semiconductors focuses on research and development by building lightweight and robust automotive software for electric and hybrid cars. The company works on automotive software that increases engine effectiveness and meets the required emission levels in combination with its materials science expertise Nexia. In addition, the company partners with automakers to develop specific solutions that improve efficiency and dependability.
   
• Magna International is expanding their catalogue of products by leveraging technology to enhance their software designs. The firm is actively pursuing sustainable options in their designs to meet the growing need for eco-friendly automotive components and market while also seeking to improve the qualities of the engine and lowering friction with smart engineering solutions.
   

Automotive Software Market Companies

Major players operating in the automotive software industry include:

• Aptiv
• BlackBerry Limited (QNX)
• Continental
• Denso Corporation
• Harman International
• Magna International
• NVIDIA
• NXP Semiconductors
• Robert Bosch
• Siemens
   

There exists a global and a regional competition in the automotive software market, affording the vendors a plethora of customer’s needs to cater to. The international dealers rule the market because of their competitive acquisition policies as well as through their investment into a diversified software portfolio, which includes but is not limited to, advanced driver-assistance systems, in-vehicle infotainment, Vehicle-to-everything, and autonomous driving. They remain the leaders in the global market thanks to their comprehensive attention to the innovation strategies and any possible integration.
 

The regional vendors keeping operating through systems procurement, came armed with the insights of the trade and offered competitively priced options. Nonetheless, these vendors and manufacturers were caught off guard amid surmounting student initiatives rising, and draconian regulations being imposed. There hangs a fair chance that the localization policies may be done away with. There is an escalation revolving around mergers and acquisitions, and this has prompted a drastic growth in the market meaning there is is an inflation in demand too. The structural change has set the merger acquition trend which should aid in closing the technological gap.
 

Automotive Software Industry News

• In December 2024, Accenture sought out to strengthen its software capabilities by acquiring AOX, a German software subsidiary focused on aiding automotive makers and suppliers in embedded software under the Accenture aegis. Such move comes in response to the integrating automotive sector realizing the broader challenges involved in Embedded Software Defined Vehicles.
   
• In November 2024, Arm and Panasonic became close partners with aims of creating a specific automotive framework standard focusing on the Software-Defined Vehicle Architecture. The partnership encourages extending the VirtIO Framework beyond device and OS virtualization, to allow quick decoupling of the automotive software from the hardware ensuring improved TTM across the industry.
   
• Siemens AG, one of the biggest automotive manufacturers recently, in October 2024, signed off on a 10 billion USD deal to acquire Altair Engineering Inc., an automotive software company. This acquisition strengthens the capacity of Siemens in simulation technology space using advanced artificial intelligence, data science and high computing integrated with Siemens knowledge on both mechanical and electronic device designs.
   

The automotive software market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

Click here to Buy Section of this Report

Market, By Offering

• Operating system
• Middleware
• Application software

Market, By Vehicle

• Passenger cars
  • Hatchback
  • Sedan
  • SUV 
• Commercial vehicles
  • Light Commercial Vehicles (LCV)
  • Heavy Commercial Vehicles (HCV)

Market, By Propulsion

• ICE
• Electric vehicle

Market, By Application

• Safety systems
• Infotainment & telematics
• Powertrain & chassis
• Body control & comfort
• Others

Market, By End Use

• OEM
• Aftermarket

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• MEA
  • UAE
  • South Africa
  • Saudi Arabia