Hardware-in-the-Loop (HIL) Testing Market Size - By Component, By Offering, By Testing Phase, By End Use, Analysis, Share, Growth Forecast, 2025 - 2034

Hardware-in-the-Loop Testing Market Size

The hardware-in-the-loop (HIL) testing market was valued at USD 948 million in 2024 and is projected to grow at a CAGR of 9.7% between 2025 and 2034. The accelerating integration of autonomous vehicles and advanced driving technologies (ADAS) is considerably increasing the need for HIL testing. These systems are dependent on algorithms and computation data along with other sensor inputs which makes validation beforehand thorough necessary.
 

HIL testing allows manufacturers to create a driving environment in which the autonomous control systems can be put into real-life situations to check safety, dependability, and performance. With more stringent safety laws taking effect, the automotive industry is now adopting HIL testing within the development workflow processes.
 

For example, Waymo’s autonomous ride-hailing service expansion into Los Angeles and Phoenix in 2024 showcases the real-world necessity of time-sensitive simulations and algorithmic actions for AI with HIL testing for accurate portrayal of road conditions and reliability from varying circumstantial elements. Moreover, the transition of autonomous vehicles from Level 3 to 5 calls for deep learning validation for heuristic AI and ML-controlled selection processes.
 

The field of HIL testing is being revolutionized with the acceleration of development in industrial automation and smart grids. The implementation of Industry 4.0, robotics, and automated systems in most factories necessitates real consideration of HIL testing together with PLCs and ICSs. HIL testing enables engineers to recreate operational scenarios to provide assurance on system functionality, reliability, fault tolerance, and integration with IoT systems.
 

For instance, Siemens partnered with Indian power utilities in 2024 to put into place smart AI-controlled super grids that improve framework flexibility and efficiency. These engineers conducted project-based HIL-validation of power electronics and grid control systems through the use of error simulations and scenario-based simulations to integrate the systems into the existing framework.
 

Hardware-in-the-Loop Testing Market Trends

• The application of AI and ML in HIL testing is enhanced by anomaly detection, decision making on-the-fly, and predictive analysis. AI algorithms are capable of complex stimuli modeling, shifting test pointers, and performing defect indentations which is not possible with traditional techniques. ML models aid in adaptive testing by utilizing previously examined data, thus increasing accuracy while decreasing the amount of time necessary to validate the system.
   
• As an illustration, in 2023, the automated machine learning market was valued at USD 1.4 billion and is predicted to grow with a CAGR of more than 30% from 2024 to 2032. This automatically results in greater machine learning adoption which will fuel the growth of the HIL testing market.
   
• The enhancement of HIL testing using cloud and edge computing technologies includes remote access, virtualization, and real-time information processing. With cloud computing, engineers can perform large, automated simulations, accumulate massive amounts of test data, and work with other users from different countries without the need for physical infrastructure.
   
• Edge computing reduces the distance between the processor and the hardware to increase the speed to guarantee real-time response to critical situations such as autonomous vehicles and smart grids. HIL environments become more flexible, cost-effective, and easier to get to because of this combination.
   
• As an example, the value of the global edge computing market was USD 13.4 billion in 2023, and it is expected to grow by more than 28% annually from 2024 to 2032. Edge computing facilitates the proper and secure execution of HIL tests in a distributed environment while supporting industries with very challenging real-time processing requirements.
   

Hardware-in-the-Loop Testing Market Analysis

Based on components, the hardware-in-the-loop testing market is divided into hardware, software, and services. In 2024, the hardware segment dominated the market accounting for around 54% share and is expected to grow at a CAGR of over 9% during the forecast period.
 

• As embedded systems become more complex, there's a growing need for advanced hardware capable of real-time processing. For example, in January 2023, dSPACE GmbH and National Instruments incorporated new high-speed modular processors and sequential I/O interfaces.
   
• To improve the testing procedures for autonomous vehicle sensor sophisticated programs have been developed. In March 2024, LeddarTech announced the LeddarEcho, a LiDAR simulation software for dSPACE's AURELION used in HIL applications. It is also expected to streamline the sensor testing processes for self-driving cars.
   
• Now there is an increasing requirement for HIL edge computing which allows for data processing to be completed in the most immediate location possible. This results in lower latency and increased speed of reaction for users in an autonomous vehicle, industrial automation, as well as similar areas.
   
• An increased use of GPUs and FPGAs for real time simulations is readily noticeable in the HIL environment. These devices allow quite powerful computations to be carried out which immediately leads to the ability for advanced power electronics and ADAS to be tested.
   

Based on the offering, the hardware-in-the-loop (HIL) testing market is segmented into open-loop and closed-loop. In 2024, the closed-loop segment dominates the market with 67% of market share and the segment is expected to grow at a CAGR of over 9.5% from 2025 to 2034.
 

• The escalating application of electric and self-driving cars is increasing the requirement for closed-loop HIL testing to verify the real-time functionalities of sensors, controllers, and actuators integration. This approach guarantees a flawless incorporation of AI powered decision making in contemporary vehicles.
   
• The merged scope of 5G and V2X Communication Testing has further widened the perimeter of closed-loop HIL systems in automotive and smart infrastructure integration. The closed-loop system supports real-time testing of vehicle to everything (V2X) communication, which is critical for functioning in connected and autonomous mobility ecosystems.
   
• A case in point, a cross-industry collaboration involving automotive and telecommunications companies executed a prototype of closed-loop HIL testing in V2X communication systems over 5G during August 2024. This project focused on the tested autonomous and connected vehicle systems in their operational environment for dependability and safety.
   

Based on the testing phase, the hardware-in-the-loop testing market is segmented into design validation, integration testing, acceptance testing, manufacturing testing, performance testing, and others, with the design validation category expected to dominate as it plays a crucial role in ensuring system performance, reliability, and safety before full-scale production.
 

• Industries are shifting towards the early-stage implementation of HIL within system design so that design errors can be detected during the early stages of development. This method minimizes expensive revisions needed at the end stages and optimizes product development timelines.
   
• For instance, the use of HIL simulations together with predictive engineering analytics in 2023 was intended for flaw detection within the earliest phases of the design process. These methods allow for expensive modifications to be avoided, thus boosting productivity timelines.
   
• Virtual HIL testing for rapid prototyping is currently advancing for improved design validation, enabling the control of systems virtualization for testing before the hardware is available. Consequently, development threats are mitigated, and the time needed to transform ideas into production-ready goods is reduced.
   
• Needless to say, the advancement of design validation through AI and machine learning integration enhances predictive analysis and automated fault detection systems, enabling advanced HIL testing for initial stages of the validation process.
   

In 2024, the U.S. region in North America dominated the hardware-in-the-loop testing market with around 84% market share and generated around USD 283 million in revenue.
 

• Currently in the U.S., the continuous integration of self-driving vehicle technology is fueling increased HIL adoption for ADAS, sensor fusion, and AI-driven automated vehicle systems. Companies are also adopting HIL in the automotive and industrial automation sectors due to the increasing need for cybersecurity software vulnerability testing on integrated systems.
   
• As both the U.S. and Canada move toward adopting cleaner sources of energy, the robust investment into renewable energy and smart grids is contributing to HIL use in power electronics, energy storage, and grid management.
   
• As Statista reports, by 2030, the projection is that there will be approximately 20.8 million self-driving cars in the US which will result in full adoption of HIL for ADAS and sensor fusion, and claiming extensive resource need.
   

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

• Germany remains a prominent country within the market of HIL testing due to the country’s strong automobile, aerospace, and industrial automation industries. Their focus toward the testing of new vehicles, specifically EVs and autonomous vehicles, accelerates the use of HIL. Major automobile manufacturers and OEMs are known to deeply fund simulation-based validation as a means for improving safety and efficiency.
   
• Furthermore, Germany’s growing automation and robotics industry supports the integration of HIL systems, guaranteeing accuracy in the validation of mechatronic systems for various branches of engineering.
   
• For example, in April 2024 Rohde & Schwarz partnered with IPG Automotive to launch an all-encompassing hardware-in-the-loop (HIL) automotive radar test system designed for the enhancement of Adlerview ADB S and driving assistance (ADAS) sensors development and testing.
   

The hardware-in-the-loop (HIL) testing market in the China is expected to experience significant and promising growth from 2025 to 2034.
 

• In China, the HIL adoption of systems for battery management (BMS), ADAS validation, and powertrain testing is being accelerated by government subsidies along with the primary automotive players' aggressive penetrations into EVs and also the advancements in electric vehicles (EVs) and autonomous driving.
   
• In September 2024, China announced funding for infrastructure supporting electric vehicles (EVs) which, in turn, resulted in greater usage of HIL systems for the testing of battery management systems and powertrain systems.
   
• The development of Chinese HIL markets is being driven by progress made in the automotive, aerospace and industrial automation domains towards the objectives of EVs and autonomous driving. The introduction of electric vehicles (EVs) and HIL systems for simulation and validation of them has resulted in further advancement of autonomous driving.
   

The hardware-in-the-loop testing market in Saudi Arabia is expected to experience significant and promising growth from 2025 to 2034.
 

• As Saudi Arabia moves towards its Vision 2030 objective, there is a notable increase in the need for HIL in power electronics, microgrid control, and battery storage system testing due to the investments towards renewable energy and smart grid projects.
   
• For example, the Saudi Electricity Company implemented HIL-based testing solutions in March 2025 to make certain the integration of large-scale solar farms into the national grid was done reliably and efficiently.
   
• The HIL testing market is growing in Saudi Arabia as a result of increased spending in the automotive, aerospace and defense industries. These advances will contribute towards the kingdom's Vision 2030, which will, in turn, increase the need for HIL testing in self-driving cars and e-mobility applications.
   

Hardware-in-the-Loop Testing Market Share

• Top 7 companies in the hardware-in-the-loop (HIL) testing industry are National Instruments, Aptiv, Robert Bosch, dSPACE GmbH, MathWorks, Elektrobit, and Spirent Communications contributes around 43% of the market in 2024.
   
• NI aims to offer modular tailored HIL testing solutions with integrated LabVIEW and VeriStand to aid in real-time simulation and control of automotive and aerospace industries. The company works with market leaders to improve ADAS and EV testing, alongside procuring more PXI-based hardware units. This ensures increased scalability for more complex HIL simulations. IT over NI expands PXI-based hardware offerings.
   
• Aptiv improves HIL testing with high-fidelity simulation platforms for electric and autonomous vehicles. It combines sensor fusion and real-time hardware-in-the-loop validation to ensure precise ADAS testing. The company improves virtual validation which shortens the development cycles of safety-critical systems. In parallel, Aptiv works with OEMs to implement proprietary vehicle control software that is easier to use and integrate with HIL testing systems.
   
• Bosch implemented HIL testing with powertrain, ADAS and electric vehicle systems to validate safety compliance. The company improves model-based development to enhance simulation accuracy. Bosch offers HIL systems on the cloud, making them hosting providers for customer’s systems that need real-time analyses and testing. Their strategic AI investments in automating testing has made Bosch more efficient and faster when adapting new technologies into vehicles.
   

Hardware-in-the-Loop Testing Market Companies

Major players operating in the hardware-in-the-loop (HIL) testing industry are:

• Aptiv
• dSPACE
• Elektrobit
• Ipg Automotive
• MathWorks
• National Instruments
• Opal-RT Technologies
• Robert Bosch
• Spirent Communications
• Vector Informatik
   

Companies engaged with the HIL testing market centre around modern and innovative simulation technologies aimed at cost and time reduction. These companies automate systems and improve integration across the automotive, aerospace, and energy industries using AI technology as well as automation for system validation. Collaborations with OEMs and research institutes fuel new innovation, while HIL solutions in cloud technology make it more accessible to many. Moreover, these companies are now investing in modular systems which help in meeting the stringent test and regulatory requirements while bound to certain parameters of system validation, ensuring compliance and high performance.
 

For holistic and enhanced simulations as well as optimized testing, this technology greatly enhances the firm's ability to leverage its global footprint through the establishment of regional testing centres supporting global industry-specific regulatory compliance. Moreover, firms can deploy flexibly through capitalist models such as subscription-based payments or Software as a Service (SaaS) enabling easy and cost-effective scaling. The precision of the testing and the effectiveness of the systems validation processes are ever more enhanced through the use of continuous software updates and AI analytics.
 

Hardware-in-the-Loop Testing Industry News

• In April of 2024, IPG Automotive in collaboration with Rohde and Schwarz developed a complete HIL automotive radar test solution. The solution integrates Rohde and Schwarz's AREG800A Radar Object Simulator and QAT100 Multi-Channel Advanced Antenna Array with IPG's CarMaker simulation software, allowing vehicle manufacturers to perform ADAS/AD scenario simulations. Their goal is to significantly lower costs by moving the AD testing “from the proving ground to the development lab.”
   
• In August 2024, VI-grade, an industry leader in automotive simulation technologies, teamed up with Step Lab, a testing machine manufacturer, to offer a unified Mechanical Hardware-in-the-Loop (mHiL) solution for examining automotive shock absorbers. This partnership seeks to streamline the development activities while shortening the time-to-market for sophisticated testing systems. The mHiL technique integrates with active and semi-active suspension systems and advanced control methodologies by employing VI-grade’s real-time AutoHawk platform and Step Lab’s mechanical skills.
   
• In July 2023, dSPACE and ETAS formed a strategic alliance with the goal of improving Hardware-in-the-Loop (HIL) testing technologies. This partnership is aimed at developing new HIL techniques to address the increasing sophistication of automotive systems, especially with the deployment of advanced driver assistance systems (ADAS) and electric vehicles (EVs). It is anticipated that this collaboration will bring about new developments in HIL testing approaches, which would allow manufacturers to validate their systems earlier in the developmental phase, thus shortening the time to market and enhancing the quality of the products.
   
• March 2025, Emerson introduced NI LabVIEW+ suite for HIL which is a comprehensive software solution aimed at improving embedded systems high-fidelity validation through hardware in the loop (HIL) testing. The suite enables integration of testing, validation and data analysis on all levels within a single platform for industries such as automotive, aerospace, and electronics. Uses NI’s Switch Load and Signal Conditioning hardware to imitate sophisticated real-life scenarios that are very challenging to reproduce mechanically.
   

The hardware-in-the-loop (HIL) testing market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2021 to 2034, for the following segments:

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Market, By Component

• Hardware
  • I/O interfaces
  • Processors
  • Real-time simulators
  • Data acquisition systems
  • Others
• Software
• Services
  • Professional services
  • Managed services

Market, By Offering

• Open loop
• Closed loop

Market, By Testing Phase

• Design validation
• Integration testing
• Acceptance testing
• Manufacturing testing
• Performance testing
• Others

Market, By End Use

• Automotive
• Aerospace & defense
• Industrial automation
• Medical devices
• Power electronics
• Others

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

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