Automotive Cybersecurity Market Size, Share & Industry Analysis, By Form (Embedded Security (In-vehicle) and Standalone Security (External), By Vehicle Type (Hatchback/Sedan, SUV, LCV, and HCV), By Propulsion (ICE and Electric), By Application (ADAS & Safety Systems, Body Control & Comfort Systems, Infotainment Systems, Powertrain Systems, and Telematics Systems), By Security Type (Network Security, Endpoint Security, Application Security, and Cloud Security), By Offering (Hardware Based Solutions and Software Based Solutions), and Regional Forecast, 2024 – 2032

The global automotive cybersecurity market size was valued at USD 5.20 billion in 2023. The market is projected to grow from USD 5.83 billion in 2024 and reach USD 19.75 billion by 2032, exhibiting a CAGR of 16.5% during the forecast period. Asia-Pacific dominated the global market with a market share of 52.5% in 2023. The market growth is driven by increasing vehicle connectivity through telematics and V2X, rising cyber threats, the growth of software-defined and autonomous vehicles, and the adoption of AI and ML for advanced threat detection. Regulatory compliance with standards like ISO/SAE 21434 and UNECE WP.29, expanding EV and V2G adoption, and regional government initiatives further fuel market growth.

Automotive cybersecurity involves protecting vehicle systems, networks, and data from cyber threats. It encompasses safeguarding modern vehicles with connected technologies against hacking, data breaches, and other malicious activities. This field focuses on securing vehicle communication interfaces, software, hardware, and onboard systems to ensure passenger safety, data integrity, and vehicle reliability, addressing vulnerabilities that arise from increasing connectivity and integration of advanced technologies in modern vehicles.

The market growth can be attributed to increasing vehicle connectivity and rising cyber threats, driving the demand for automotive cybersecurity solutions. A key trend of adopting artificial intelligence and machine learning for improved threat detection and response is expected to fuel the market growth over the period. AI and machine learning ensure robust protection against evolving cyberattacks while supporting the development of secure, smart, and autonomous vehicles.

The COVID-19 pandemic significantly impacted the market, accelerating the shift to digital and connected vehicle technologies. Increased remote work and reliance on digital services elevated the risk of cyber threats, driving demand for robust cybersecurity solutions. However, supply chain disruptions and reduced automotive production initially slowed the market growth. The renewed focus on cybersecurity fostered advancements and investments in secure automotive technologies post-pandemic.

Automotive Cybersecurity Market Trends

Adoption of Advanced Technologies Fuels Market Development

The employment of artificial intelligence and machine learning tends to drive the growth of the market. These technologies enable advanced threat detection and response mechanisms, providing real-time analysis and mitigation of cyber threats. AI and ML algorithms are able to predict and identify anomalies, ensuring proactive defense against potential attacks. They enhance the accuracy and efficiency of cybersecurity measures, reducing the reliance on manual monitoring and intervention.

In addition, the integration of AI and ML in cybersecurity solutions allows for continuous learning and adaptation to evolving threats, ensuring robust protection for connected and autonomous vehicles. This trend is fostering innovation and improving vehicle safety and is poised to drive the demand for dedicated cybersecurity solutions in the automotive sector over the forecast period.

Moreover, the increasing adoption of vehicle-to-everything (V2X) communication and over-the-air (OTA) software updates has amplified the need for resilient cybersecurity frameworks. V2X technology, which facilitates real-time data exchange between vehicles, infrastructure, and pedestrians, is vulnerable to potential cyber intrusions. Likewise, OTA updates, while essential for software upgrades and security patches, present new attack surfaces that hackers can exploit. To mitigate such risks, automakers are investing in end-to-end encryption, secure boot mechanisms, and intrusion detection systems (IDS) to fortify vehicular networks.

In November 2022, RISE (Research Institutes of Sweden), a state-owned organization, launched an advanced cybersecurity initiative focused on vehicle testing. The RISE Cyber Test Lab for Automotive allows the automotive industry to conduct vehicle testing utilizing cutting-edge cyber technology and the most rigorous testing methodologies globally.

Furthermore, regulatory compliance plays a crucial role in shaping the automotive cybersecurity landscape. With governments and industry bodies introducing stringent cybersecurity guidelines, manufacturers are required to adhere to standards such as ISO/SAE 21434 and UNECE WP.29. These regulations mandate the implementation of risk management frameworks, secure software development practices, and continuous monitoring of vehicle cybersecurity threats. Compliance with these standards not only ensures legal adherence but also builds consumer trust in connected and autonomous vehicles.

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Automotive Cybersecurity Market Growth Factors

Increasing Vehicle Connectivity Generates Demand for Automotive Cybersecurity Solutions

Increased vehicle connectivity is considered a major driver behind the automotive cybersecurity market growth. As vehicles become more connected through advanced telematics, infotainment systems, and Vehicle-to-Everything (V2X) communication, the risk of cyber threats and vulnerabilities rises significantly. While enhancing convenience and functionality, these connected features create multiple entry points for potential cyber-attacks.

Ensuring the safekeeping of these interconnected systems is crucial to protecting sensitive data, ensuring passenger safety, and maintaining vehicle integrity. Consequently, the demand for robust cybersecurity solutions is growing, prompting manufacturers to invest in advanced technologies and security measures. This factor is expected to fuel the market growth during the forecasted period.

Moreover, the rapid expansion of software-defined vehicles (SDVs) is further intensifying the need for comprehensive cybersecurity frameworks. Unlike traditional vehicles, SDVs rely heavily on software-driven functionalities for vehicle control, diagnostics, and user experience. This shift increases the complexity of cybersecurity risks, necessitating continuous security updates, vulnerability management, and real-time monitoring to prevent unauthorized access and potential breaches. Automakers are increasingly integrating Security Operations Centers (SOCs) to enhance threat intelligence and incident response capabilities.

In June 2023, Continental Automotive achieved successful certification audit compliance with ISO/SAE 21434:2021 and implemented a robust Cybersecurity Management System (CSMS) across the organization. ISO/SAE 21434:2021 sets a globally recognized standard, providing a comprehensive framework for managing cybersecurity risks effectively throughout the lifecycle of automotive systems.

RESTRAINING FACTORS

Complexity of Integrating Cybersecurity Measures May Restrain Market Growth

Modern vehicles are intricate ecosystems of interconnected electronic components, each requiring protection against cyber threats. Implementing effective cybersecurity involves understanding and securing numerous interfaces, protocols, and software layers, which are mostly technically challenging and time-consuming. Manufacturers have to navigate compatibility issues, ensure seamless operation with existing systems, and address potential performance impacts.

This complexity demands specialized expertise and resources, which is limited or costly for some companies. Moreover, the lively nature of cyber threats necessitates continuous updates and adaptations, further complicating integration efforts. These factors collectively slow down the adoption of robust cybersecurity solutions in the automotive industry despite the pressing need for enhanced vehicle security in an increasingly connected environment, thus hampering product adoption.

Additionally, cost constraints pose a significant challenge in the widespread implementation of advanced cybersecurity solutions. The development and deployment of high-end security architectures, including intrusion detection systems (IDS), secure gateways, and blockchain-based authentication mechanisms, require substantial investment. For many small and mid-sized OEMs and Tier 1 suppliers, allocating resources for cybersecurity without affecting profitability remains a concern. As a result, cost-benefit analysis often influences decision-making, leading some manufacturers to adopt minimal compliance-driven security rather than investing in comprehensive, future-ready cybersecurity solutions.

Furthermore, regulatory fragmentation across different regions adds another layer of complexity to cybersecurity integration. While global standards such as ISO/SAE 21434 and UNECE WP.29 provide a framework for cybersecurity compliance, their interpretations and enforcement vary across countries and jurisdictions. This lack of uniformity forces automakers to tailor security measures to different regulatory environments, increasing the time and cost required for implementation. The absence of a globally harmonized cybersecurity policy slows down innovation and creates inconsistencies in vehicle security levels across markets.

Automotive Cybersecurity Market Segmentation Analysis

By Form Analysis

Innovations in Cybersecurity Technologies to Foster Embedded Security (In-vehicle) Segment Growth

By form, the market is segmented into embedded security (in-vehicle) and standalone security (external).

The embedded security (in-vehicle) segment dominated the market in 2023. Innovations in cybersecurity technologies, such as Hardware Security Modules (HSMs), secure boot, and Over-the-Air (OTA) updates, are driving the adoption of embedded security in vehicles. These technologies help in protecting critical vehicle systems from unauthorized access and cyberattacks.

The standalone security (external) segment is poised to emerge as the fastest-growing segment during the forecasted period. Governments and regulatory bodies are executing stringent cybersecurity regulations for the automotive industry. Compliance with these regulations often requires standalone security measures to protect vehicles from external threats.

In January 2024, SAE and ISO collaborated to create two new documents aimed at advancing cybersecurity in automotive. These initiatives, spearheaded by the Vehicle Cybersecurity Systems Engineering Committee, introduce novel concepts and offer supplementary guidance related to the ISO/SAE 21434 standard on Cybersecurity Engineering for Road Vehicles. The documents will specifically address the Cybersecurity Assurance Level (CAL) and Targeted Attack Feasibility (TAF).

Moreover, the increasing integration of Artificial Intelligence (AI) and Machine Learning (ML) in cybersecurity solutions is expected to enhance the capabilities of both embedded and standalone security systems. AI-driven security solutions can analyze vast amounts of data in real-time, identifying anomalies and potential threats more effectively than traditional security mechanisms. Automakers are leveraging AI to develop adaptive security frameworks that continuously evolve in response to emerging cyber risks. This trend is anticipated to further drive market growth.

By Vehicle Type Analysis

SUV Holds Leading Position Driven by their Versatility and Higher Demand

In terms of vehicle type, the market includes hatchback/sedan, SUV, LCV, and HCV.

The SUV segment held the principal share of the market in 2023. SUVs have become one of the most popular vehicle segments globally due to their versatility, spaciousness, and perceived safety. This popularity leads to higher sales volumes and a greater focus on ensuring their cybersecurity.

The HCV segment is poised to expand at a higher growth rate over the forecast period. Modern HCVs are integrated with advanced fleet management systems that track and optimize routes, monitor vehicle health, and manage logistics. Securing these systems is essential to prevent data breaches and ensure operational efficiency.

The rise of autonomous and semi-autonomous vehicles in the SUV and HCV segments is driving the need for advanced cybersecurity solutions. These vehicles rely on complex software ecosystems, sensors, and connectivity modules, making them prime targets for cyber threats. OEMs are increasingly investing in robust endpoint security solutions and intrusion detection systems to safeguard these vehicles against potential cyberattacks. This factor is expected to further accelerate the demand for cybersecurity measures in these segments.

By Propulsion Analysis

Generation of Significant Data Amounts by Modern ICE Vehicles to Propel Segment Expansion

With respect to propulsion, the market is bifurcated into ICE and electric.

The ICE segment held the largest market share in 2023. Modern ICE vehicles generate and transmit significant amounts of data, including operational, diagnostic, and personal information. Protecting this data from unsanctioned access and cyber threats is crucial, driving the need for effective cybersecurity solutions. This fuels the demand for the segment.

The electric segment is estimated to propel with the fastest-growing CAGR during the forecast period. EVs rely heavily on software and digital systems for battery management, energy efficiency, and autonomous driving capabilities. Protecting these critical systems from cyber threats is essential for ensuring vehicle safety and reliability. Thus, the increase in EV sales is expected to directly contribute to the market's growth during the forecast period.

In July 2022, DEKRA and VicOne, a subsidiary focused on vehicle security under Trend Micro Incorporated, partnered to offer collaborative solutions. They aim to assist automotive manufacturers and suppliers in adhering to new international regulations and standards in vehicle security. Leveraging their technical expertise and certification services, they support suppliers transitioning into the electric vehicle industry, ensuring efficient implementation and compliance with global security standards.

The growing adoption of Vehicle-to-Grid (V2G) technology in EVs is further complicating cybersecurity challenges. V2G enables bidirectional energy transfer between EVs and the power grid, making cybersecurity a critical concern to prevent unauthorized access and grid-related cyber threats. Automakers and energy companies are developing encrypted communication protocols and blockchain-based authentication mechanisms to secure V2G transactions, which is anticipated to contribute to the market’s growth.

By Application Analysis

Body Control & Comfort Systems Dominate Impelled by Incorporation of a Wide Range of Electronic Systems in Modern Automobiles

Categorized by application, the market caters to ADAS & safety systems, body control & comfort systems, infotainment systems, powertrain systems, and telematics systems.

The body control & comfort systems segment grabbed the majority of the market share in 2023. Modern automobiles are equipped with a wide range of electronic systems for body control and comfort, including lighting, climate control, power windows, and seat adjustments. The complexity and integration of these systems necessitate robust security measures to guard against potential vulnerabilities. This factor is slated to fuel the growth of the segment over the forecast timeframe.

The telematics systems segment is estimated to expand at the fastest-growing CAGR during the forecast period. The advancement and deployment of automated and connected vehicles rely heavily on telematics systems for communication and data exchange. Fortifying these systems against cyber threats is critical to ensure the protection and dependability of autonomous and connected vehicles, which is slated to boost the growth of the segment over the forecast period 2024-2032.

Cybersecurity in telematics systems is becoming increasingly crucial as automakers shift towards cloud-based fleet management solutions. Fleet operators rely on real-time data analytics, predictive maintenance, and remote diagnostics to optimize vehicle performance. However, cybercriminals are targeting cloud-connected telematics platforms to manipulate vehicle data or disrupt operations. This has led to the adoption of zero-trust security frameworks and advanced threat intelligence solutions to strengthen the security of cloud-based telematics applications.

By Security Type Analysis

Stringent Regulations for Vehicle Safety to Bolster Network Security Segment Growth

Classified by security type, the market encompasses network security, endpoint security, application security, and cloud security.

The network security segment dominated the market with the largest share in 2023. Stringent regulations and standards for vehicle safety and cybersecurity, such as UNECE WP.29, mandate robust network security measures, encouraging automakers to invest in advanced solutions. The growth of remote diagnostics, Over-the-Air (OTA) updates, and fleet management services increases the need for secure network connections to prevent cyber intrusions.

In February 2023, SEGULA Technologies, a global leader in automotive engineering, and C2A Security, an esteemed specialist in cybersecurity in automotive, joined forces to provide car manufacturers and mobility companies with an expanded array of cybersecurity services. This collaboration enables them to assess their vehicles' resilience against cyber threats and comply with emerging automotive security regulations and standards such as WP.29 and ISO/SAE 21434.

The emergence of 5G-enabled connected vehicles is expected to drive innovation in cloud security solutions. The high-speed, low-latency connectivity of 5G networks enables seamless communication between vehicles, infrastructure, and cloud platforms. However, this also introduces new cybersecurity risks, making cloud security solutions a priority for automakers. Companies are investing in next-generation firewalls, AI-powered threat detection, and multi-layered encryption to protect data transmission within connected vehicle ecosystems.

The application security segment is anticipated to register a high growth rate over the considered period. Modern vehicles are equipped with numerous applications for infotainment, navigation, diagnostics, and vehicle control. Protecting these applications from vulnerabilities and attacks is essential. This generates the need for cybersecurity solutions, which are slated to accelerate the growth of the segment during the forecasted period.

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By Offering Analysis

Hardware Based Solutions Segment Led Due to Requirement for Robust Hardware-based Security Measures

By offering, the market encompasses hardware based solutions and software based solutions.

The hardware based solutions segment dominated the market with the largest share in 2023. Compliance with automotive cybersecurity regulations and standards, such as UNECE WP.29 and ISO/SAE 21434, often requires robust hardware-based security measures to protect against cyber threats. This factor fuels the segment's growth.

The software based solutions segment is anticipated to witness a high growth rate over the considered period. With the rise of connected vehicles, there is a mounting need for software solutions to secure communication channels, data exchange, and network interactions within and outside the vehicle. Therefore, modern vehicles are prone to cyber threats, which is expected to advance the growth of the segment during the forecast period.

In October 2024, ETAS GmbH, its cybersecurity division ESCRYPT, and Rambus, a prominent supplier of hardware security IP, revealed a strategic partnership. They aim to jointly develop and deliver a bundled security solution that merges Rambus' RT-640 embedded hardware security module (eHSM) IP with ETAS' SoC security software solution, ESCRYPT CycurSoC. This collaboration seeks to enhance integrated security offerings for their respective industries.

REGIONAL INSIGHTS

Emergence of High-end System Integration into Automobiles Boosts Asia Pacific’s Market Development

By region, the market is studied across North America, Europe, Asia Pacific, and the rest of the world.

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Asia Pacific held the largest automotive cybersecurity market share in 2023 and is attributed to developing at a fastest-growing CAGR during the forecast period. The region amounts to a dominant volume of automobiles on the street. These vehicles are almost equipped with at least an infotainment system and other electronic systems that are susceptible to cybersecurity threats. Besides, logistics fleets with location-sharing and communication-based applications also fuel the market dominance. However, the emergence of high-end automated system integration and the embracement of electric vehicles are poised to contribute to the fast growth of the market in the Asia Pacific region over the forecast period.

Government initiatives in Asia Pacific are accelerating cybersecurity adoption in the automotive sector. Countries such as China, Japan, and South Korea are implementing stringent cybersecurity policies to protect connected and autonomous vehicles from cyber threats. China's New Energy Vehicle (NEV) regulations, for instance, mandate enhanced data protection measures, while Japan’s METI (Ministry of Economy, Trade, and Industry) has issued cybersecurity guidelines for vehicle manufacturers. These regulatory developments are expected to further drive market growth.

North America held the second-largest market share in 2023. A high adoption rate of connected and autonomous vehicles in North America increases the demand for robust cybersecurity measures. In addition, the region consists of several technology companies that are at the forefront of adopting advanced automotive technologies, which drives the market growth. In April 2024, Argus Cyber Security, a global frontrunner in cybersecurity in automotive, unveiled the inauguration of its new penetration testing laboratory in Detroit, Michigan. This state-of-the-art facility is premeditated to address the increasing demand from North American OEMs and Tier 1 suppliers for localized cybersecurity penetration testing services.

Moreover, the increasing number of cyberattacks targeting automotive infrastructure in North America is pushing OEMs and regulatory bodies to strengthen cybersecurity frameworks. The U.S. National Highway Traffic Safety Administration (NHTSA) has emphasized the need for vehicle cybersecurity best practices, and recent breaches in fleet management systems have further highlighted vulnerabilities. This has led to the growing adoption of Intrusion Detection and Prevention Systems (IDPS) in vehicle networks to mitigate threats proactively.

Europe also significantly contributes to the market growth. Germany, the U.K., and others are home to major luxury car manufacturers that equip high-end technologies into their vehicles. This generates a need for cybersecurity solutions in the regional market, fostering market growth over a period of time. In November 2020, university researchers successfully breached and took control of a Tesla Model X in approximately two minutes. Using only a key fob, a Raspberry Pi, and a replacement engine control unit, they demonstrated the vulnerability, with the entire kit costing about USD 200.

Additionally, the European Union’s General Data Protection Regulation (GDPR) and the UNECE WP.29 cybersecurity regulation are key drivers shaping the regional market. European automakers must comply with strict data protection laws, ensuring that cybersecurity is a fundamental part of vehicle design and functionality. The WP.29 regulation requires automakers to implement cybersecurity management systems (CSMS) and software update management systems (SUMS) to mitigate cyber risks effectively. The enforcement of these regulations is expected to drive significant investment in automotive cybersecurity solutions.

The rest of the world involves Latin America and the Middle East & Africa sub-regions. The expanding automotive industry in Brazil and Mexico boosts the demand for cybersecurity solutions to protect against cyber threats. The increasing adoption of connected and smart vehicles in the region is a significant driver for the market growth.

KEY INDUSTRY PLAYERS

Prominent Companies Focus on Partnerships to Gain a Competitive Edge

The automotive cybersecurity market involves key players aiming for innovation and strategic partnerships. Major companies include Harman International, Aptiv, Karamba Security, Upstream Security, and Argus Cyber Security, among others. These firms leverage advanced technologies such as AI and machine learning to enhance their cybersecurity offerings. Partnerships and collaborations with automakers and tech companies are common to strengthen market presence.

Mergers and acquisitions also shape the competitive landscape to expand product portfolios, product launches, and geographic reach. Regional players in North America, Europe, and Asia Pacific drive significant competition, while emerging markets in Latin America and the Middle East & Africa are gaining attention due to rising vehicle connectivity and regulatory measures.

List of Top Automotive Cybersecurity Companies:

• Harman International (U.S.)


• Continental AG (Germany)


• Robert Bosch GmbH (Germany)


• NXP Semiconductors (Netherlands)


• Argus Cyber Security (Israel)


• Karamba Security (Israel)


• GuardKnox (Israel)


• Trillium Secure (U.S.)


• ESCRYPT (Germany)


• SafeRide Technologies (Israel)


• Autotalks (Israel)


• Vector Informatik GmbH (Germany)


• Dellfer (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2024: VicOne obtained DEKRA certification for ISO/SAE 21434 automotive cybersecurity, enhancing its integrated services to meet international standards.


• March 2024: The University of Windsor's SHIELD Automotive Cybersecurity Centre of Excellence and Block Harbor, an automotive cybersecurity firm, announced that they are collaborating to offer students hands-on learning opportunities with real-world test cases. Block Harbor provided Breakwater test cases, including the UNR155 Mitigation Test Suite, to integrate with Windsor's Automotive Cybersecurity Penetration Test Platform.


• February 2024: AutoCrypt, a company specializing in automotive cybersecurity and smart mobility technology, introduced AutoCrypt CSTP, a comprehensive cybersecurity testing platform. This platform is specifically designed to facilitate integrated cybersecurity testing for vehicle type approval, in alignment with UNECE's Regulations 155/156 and SAC's GB and GB/T standards.


• October 2023: Tata Elxsi, a global leader in design and technology services across various industries, announced a collaborative effort with the Indian Institute of Science (IISc) to develop an Automotive Cyber Security Solution. This initiative is part of their ongoing partnership outlined in an existing Memorandum of Understanding (MoU).


• September 2023: Neusoft Corporation (Neusoft, SSE:600718) achieved official ISO/SAE 21434 certification for its Automotive Cybersecurity Management System. This certification follows evaluations such as A-SPICE (V3.1) CL3, TISAX AL3, and dual certifications for ISO 26262 management systems and products. These recognitions further bolster Neusoft's leadership in software design, development, product R&D, mass production, information security, and comprehensive risk assessment and control capabilities.


• July 2023: JOYNEXT obtained certification from TÜV SÜD, a third-party testing and certification organization, confirming compliance with the ISO/SAE 21434 Automotive Cybersecurity Process.


• January 2023: NIST announced that it is establishing a Community of Interest (COI) for industry discussion and feedback on its work impacting the automotive sector, covering topics such as cryptography, supply chain security, AI cybersecurity in automated vehicles, and more. The COI will engage stakeholders to comment on NIST publications, develop use cases, and address cybersecurity challenges posed by new technologies.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as prominent companies, product types, and leading applications of the product. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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