According to the MarkNtel Advisors’ research, the market is likely to grow at a CAGR of around 20% during 2021-2026.
The market growth attributes to the snowballing popularity of autonomous vehicles with the high level of driver comfort and reducing chances of accidents. The rising demand for technologically advanced automotive solutions and the urge to own premium segment vehicles is accelerating the market growth.
Further, the growing need for a technologically advanced solution that could help in reducing the incidences of human error while driving and the surging truck platooning that requires rich connectivity technology & automated driving support is propelling the market growth.
Impact of COVID-19
The sudden outbreak of the COVID-19 pandemic has adversely affected the overall automotive & transportation industry due to lockdown and travel restrictions by the government. The spread of the pandemic has altered the way people used to travel in public transport due to the rising safety concerns and the need to maintain social distancing.
However, integrating AI in the transportation sector is a solution to the problem cited above. It will help reduce person-to-person transmission by ensuring the compliance of specific COVID-19 guidelines, thereby increasing efficiency.
Burgeoning Demand for Autonomous Vehicles
Due to the rising preference of consumers to own a premium car and the increasing purchasing power of the consumer, the demand for autonomous vehicles has spurred immensely. Additionally, autonomous vehicles have gained popularity owing to their features including self-driving, and automatic parking.
The autonomous vehicle also reduces the chances of accidents and human error. Thus, the growing demand for autonomous vehicles will fuel the market growth in the forecast timeline.
Deep Learning Accounted for the Largest Market Share
Based on technology, the market bifurcates into Machine Learning, Natural Language Processing, Context-Aware Computing, Computer Vision, and Deep Learning. Among these, deep learning technology acquired the largest share in the Artificial Intelligence Market for the Automotive and Transportation Market owing to its wide range of applications in the transportation management sector.
Further, deep learning is used for training networks to imitate human-like driving behavior. Additionally, with a deep learning mechanism, the safety of the vehicle increases. Thus, this segment contributes to the overall growth of the market.
Autonomous Driving Processing Chips Attained the Highest Market Share
Based on the Application, the market segments into Human-Machine Interface, Driver Monitoring, Driver/ Identity Authentication, Autonomous Driving Processing Chips, and Intelligent Traffic Management System. Out of these, the Autonomous Driving Processing Chips dominated the market in 2019.
Every AI-based vehicle requires certain in-built technologies, sensors, and chips to perform its primary functions meant to be carried out by the driver. Therefore, the demand for Autonomous Driving Processing Chips is soaring in the market.
However, the implementation cost of these technologies is considerably high as AI-based vehicle requires high-end technological features for its performance, thereby hampering the market growth.
North America Dominates the Market
Geographically, North America held the largest share in the market in 2019 due to the mounting integration of self-driving vehicles and the surging automated cars in the US.
The availability of advanced technology to integrate artificial intelligence programs into the logistics industry in this region is higher than in others. Additionally, the rise in usage of AI-based trucks by the US transportation and logistics industry to reduce operational costs is accelerating the market growth in this region.