In-Cabin Automotive AI Market Size, Share & Trends Analysis Report By Product Type (Radar, Camera, Voice Assistance, Smart Sensor), By Applications (Occupant Monitoring System, Driver Monitoring System, Conversation Assistance, Smart HVAC) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global in-cabin automotive AI market size was valued at USD 112.39 million in 2022. It is estimated to reach USD 3,215.04 million by 2031, growing at a CAGR of 45.21% during the forecast period (2023–2031).

Artificial intelligence (AI) systems continue to take over exciting new responsibilities that simplify and improve the driving experience. Automotive companies see AI as a new mode for increasing their profitability margins. In-car experiences comprise the complete user experience, including the driver and all passengers, to improve the total in-cabin experience. This might include AI applications in intelligent driver assistance programs that enhance safety or infotainment systems to instruct drivers while providing content recommendations to passengers in the backseat.

One of the most successful aspects in promoting customer loyalty for automotive manufacturers is in-cabin AI and the experience. Automakers are engaging with crucial ecosystem providers to give their customers additional value. Improved driver experience, safety, and intelligent in-car assistance are among the advantages of the AI-powered cabin. Object categorization, scene understanding, location services, natural language understanding, face detection/fingerprint recognition, sensor processing and fusion, voice/noise cancellation, and voice/speech recognition are all essential components of automotive AI that enable a smart cockpit. Together, they create an AI-powered in-cabin experience.

Highlights

• Camera dominates the product type segment
• Driver monitoring system dominates the application segment
• North America is the highest shareholder in the global market

Market Dynamics

Market drivers

Rising demand for the autonomous vehicles

The automotive industry is dynamic as it is experiencing changes with technological innovations. Several leading companies in the industry are creating significant investments in the research and development of technologies. The rising trend of autonomous vehicles in the automotive sector invites more significant investments in developing these automobiles. Additionally, the regulatory framework, government funding, and investment support for digital infrastructure are influencing self-driving car technology and would create market opportunities for the in-cabin automotive AI market.

Various sensors, including radio detection and ranging (RADAR) and light detection and ranging (LiDAR) systems, are combined in an autonomous vehicle to perform tasks automatically and without a driver's assistance. All the functions are controlled from the cabin, which creates demand for in-cabin automotive AI for better performance. As for performing situational analysis, motion planning, and trajectory control, these sensors help in navigation. Moreover, one of the prominent factors is growing safety concerns, and developments in automotive technologies have led to the acceptance of autonomous vehicles. Such factors are expected to fuel the in-cabin automotive AI market growth in the forecast period.

Increasing concerns of passenger and pedestrian safety

The increasing demand for safe driving and a convenient driving experience leads the automotive segment to indulge in artificial intelligence. Artificial intelligence technologies advancement such as deep learning and machine learning helps in the technological improvement of self-driving cars, thus improving the driver experience. The advanced driver assistance system (ADAS) is one of the upcoming next-generation automotive trends as it promises to enhance vehicle safety by helping to simplify the driving process. Likewise, ADAS aids in reducing driver distraction that leads to accidents, creating opportunities for the in-cabin automotive AI market.

Furthermore, the Centers for Disease Control state that motor vehicle accidents are the top two reasons for death and accidental injury in the U.S. Even non-alcoholic impaired drivers' possibility for an accident increases significantly with increasing distraction. Additionally, using cell phones is one of the biggest distractions, and it is one of the primary reasons for the rise in accident rates. With the increase in demand for luxury vehicles, the OEMs are providing the best new technology-driven vehicles to improve the customer experience, thus, fostering the need for the in-cabin automotive AI market.

Market restraint

Design challenges

The main in-cabin automotive AI component is a driver monitoring system placed near the steering wheel and cannot monitor the whole cabin. Along with this, there are plenty of design issues that engineers are working on, which the driver monitoring system must overcome. First and foremost, these devices must be adaptable regarding placement and footprint within the vehicle. Moreover, the sensor must run at a low power level to avoid draining the car's battery life. Hardware and software must be tuned for a small footprint, low energy consumption, and good thermal management to meet both objectives. Even electromagnetic (EM) radiation is emitted and absorbed by automobile-sensitive systems, particularly the ignition spark circuit and radio. As a result, these driving monitoring systems must be able to endure high-frequency EM noise while releasing minimal noise to safeguard other circuits. Therefore, such factors restrict the market's growth.

Market opportunities

Increasing demand for occupant safety and security

Customers have moved toward safety technology as the frequency of accidents has increased. The government has mandated that all automobiles include an occupant protection system on every vehicle. The occupant protection system has significantly minimized the number of injuries sustained in an accident. In recent years, sophisticated electronic components with excellent performance reliability have been combined with occupant protection systems. As a result of ongoing research and development in the field of safety technologies, as well as rising demand for safety, the market for safety systems such as occupant protection systems has reached a saturation point.

Additionally, the industry is expected to benefit from increased driver safety awareness and the growing influence of safety regulations enforced by the European Union and the U.S. Department of Transportation. Due to stringent requirements, automotive manufacturers are being pushed to use the most up-to-date sensor-based systems. Further, the criteria for electronic safety systems in the car sector are becoming increasingly stringent. Hence, the factor mentioned above offers tremendous opportunities for market growth.

Regional Analysis

Based on region, the global in-cabin automotive AI market is bifurcated into North America, Europe, South America, the U.K., the Middle East and Africa, China, and Asia-Pacific and Japan.

North america dominates the global market

North America is the most significant global in-cabin automotive AI market shareholder and is anticipated to exhibit a CAGR of 42.49% during the forecast period. The North American region comprises developed countries like the U.S., Canada, and Mexico. Consumers prefer modern technologies for comfort inside the vehicle, which is anticipated to propel the demand for in-cabin automotive AI in this region. Furthermore, the key drivers responsible for increasing demand for in-cabin automotive AI in the region are increasing investments in the automotive sector and rising consumer knowledge about the comfort and safety of the vehicle. Some key manufacturers and suppliers in North America are Ambarella, ARM, Bitsensing Inc., Bosch (Robert Bosch GmbH), Caaresys, Denso Corporation, Edgetensor Technologies Inc., and Eyeris.

Europe is projected to exhibit a CAGR of 47.89% over the forecast period. The government rising concern for road safety has boosted the market for in-cabin automotive AI components. Moreover, Euro NCAP has announced that it is necessary to have driver monitoring systems tested with five-star safety ratings. The European General Safety Regulation has also mandated driver monitoring technology for every new car, van, truck, and bus from 2024. In addition, European car users are more cautious about the safety of the driver and the passenger. A review by the European Commission found driver's distraction to be the likely factor in 10%-30% of road collisions in Europe each year, which will create market opportunities for in-cabin automotive AI applications.

Technological improvements in the automotive industry combined with the growing adoption of driver safety systems in the U.K. will increase opportunities for the in-cabin automotive AI market. Moreover, U.K.-based in-cabin automotive company B-Secur has developed a biometric-based authentication technology called HeartKey that identifies users by analyzing their heartbeats. Such technological advancements will further propel the demand for in-cabin automotive AI systems.

The Asia-Pacific region and Japan will see an increase in demand for installing communication-based computer gear inside automobiles, opening up new markets for manufacturers and workshops. An increase in the popularity of ADAS, connectivity, and infotainment systems among youth will further boost business expansion. Consumers in economies such as Japan and Singapore are particularly interested in a technology that works according to their moods and emotions. The use of convolutional neural network (CNN) algorithm related to emotion recognition is gaining prominence in the Asia-Pacific and Japan region, thus fostering the growth of the in-cabin automotive AI market. However, the high cost of in-cabin automotive AI components will restrict the market's growth in the region as the technology is advanced and high-tech, making it expensive to install.

Many new technological advancements exist, including automotive developments in South America and projected growth in Brazil's truck and bus market. Moreover, Foreign Direct Investment (FDI) in Colombia and Argentina's supply chain localization boosts the region's in-cabin automotive AI market potential. With increased disposable income and rising living standards, the in-cabin automotive AI market is experiencing the most rapid adoption in the Middle East & Africa as people want their traveling to be comfortable, luxurious, and, most importantly, safe. The increasing focus on vehicle interiors and rising concern for in-vehicle driver and passenger safety is expected to increase demand for in-cabin automotive AI technology in the Middle East and Africa region.

Segmental Analysis

The global in-cabin automotive AI market is segmented by product type and application.

Based on product type, the global market is divided into radar, camera, smart sensor, and voice assistant.

The camera segment is responsible for the most significant market share and is expected to exhibit a CAGR of 46.73% over the forecast period. The camera is an in-expensive part of automotive AI, and the increasing trend of automated driving means that cameras are being gradually used in passenger compartments. Advancements in technology like image detection can make the vehicle aware when the driver shows signs of fatigue. It can also disclose the size and seat position of the occupants for more personal adjustment of the system. After an accident, pictures could be transferred directly to the emergency center to make the services better equipped when they arrive for help. If the driver is not paying attention, the possibility of an accident remains very high even with ADAS. As a result, cameras and vision systems are now being added inside to monitor the driver and, gradually, the other occupants.

Nowadays, voice technology is not limited to automatic speech recognition: it has been upgraded to language understanding. Over the years, the growing technology in the automotive sector has increased the market for Voice Assistants worldwide. Voice Assistant technology has proliferated, right from controlling cabin functionality to now as entertainment. Driving involves using hands a lot, which leads to voice being the only natural user interface to execute tasks such as playing music and navigating. In-car tasks tend to be single-time instructions that require little cognitive load, so the driver's voice is the ideal method to be used while the driver can focus on driving.

Based on application, the global market is segmented into the occupant monitoring system, driver monitoring system, conversation assistance, and smart HVAC. 

The driver monitoring system segment owns the highest market share and is estimated to exhibit a CAGR of 43.74% during the forecast period. Driver monitoring systems use driver-facing cameras equipped with light-emitting diodes (LEDs) and lasers to see the driver's face in the dark, such as at night or even if the driver is wearing sunglasses. The software collects the data points from the driver to create a baseline initially to see what the driver's normal attentive state looks like so the driver monitoring system software can determine whether the driver is awake, is blinking more than usual, driver's eyes are narrow or are the driver's eyes closing, and the head position of the driver is correct or not. Due to their critical role in improving road safety, driver monitoring systems are becoming increasingly popular in commercial fleets and private passenger vehicles.

The internal monitoring system is rapidly expanding with developments in driverless vehicles. This is because people are now concerned about the safety of the driver and other traveling passengers. The system can identify the occupants' presence and provide specific reminders, such as fastening their seat belts. The camera is also positioned so that all seats are in its field of vision. The demand for occupant monitoring systems is rising in commercial fleets of vehicles to identify unauthorized passengers or objects within the cab. Moreover, the technology is used for child detection and safety for passenger vehicles. Likewise, brands that offer this system in their safety rating from 2022 will be rewarded by European New Car Assessment Program (Euro NCAP).

Recent Developments

• March 2023- Cipia, an AI computer vision in-cabin automotive consulting firm, announced a new Tier 1 design win for Chinese automaker Chery. The two new Chery models will be equipped with Cipia's Driver Sense driver monitoring system (DMS), which will be integrated into the vehicles' In-Vehicle Infotainment (IVI) system and powered by a Qualcomm SOC.

• March 2023- Smart Eye, the global leader in AI for Human Insight, partnered with Texas Instruments (TI). The companies' technologies collaborate to provide automakers with an innovative interior sensing solution that enhances driver safety and enables enhanced comfort, wellness, and entertainment in the cabin.