The automotive cybersecurity market is estimated to be valued at USD 4.33 Bn in 2024 and is expected to reach USD 13.94 Bn by 2031, growing at a compound annual growth rate (CAGR) of 18.18% from 2024 to 2031. The automotive cybersecurity market is driven by rising connectivity in modern vehicles that has introduced several points of vulnerability. As hackers become more sophisticated, the incorporation of artificial intelligence and machine learning capabilities into automotive cybersecurity systems will be crucial.

Market Driver - Increased Use of Electronics in Vehicles with Growing Connectivity

As automotive technology continues to evolve at a rapid pace, modern vehicles are becoming more connected and integrated with electronics. Automakers are adding advanced features such as infotainment systems, telematics, driver-assistance technologies, and connectivity options that allow remote access and software updates over-the-air.

Today's vehicles can contain over 100 million lines of code and rely on various electronic control units over the in-vehicle network. This however, exposes these networks of controllers to hackers who can potentially access the vehicle systems remotely and endanger passenger safety.

Going forward, auto manufacturers will have to integrate cybersecurity at the development stage itself across software, hardware, networks, and supply chain. With future mobility solutions promising even higher levels of automation and data sharing, the priority on safeguarding critical vehicle systems and passenger privacy will continue to intensify among automakers. Their ongoing investments and focus on building security into automotive electronic architectures will remain a key driver for the automotive cybersecurity market.

Market Driver - Enhanced Focus on Cybersecurity Due to the Rise in Cyberattacks

The increasing frequency and sophistication of cyberattacks targeted towards connected vehicles is another key factor accelerating investments in the automotive cybersecurity market. While automakers have acknowledged vulnerabilities for some time, successful real-world attacks are compelling greater action.

High-profile security analyses have managed illegal remote access to exposed vehicle networks and components like brakes, ignition systems, and transmissions in recent times. Meanwhile, wider reports have surfaced of cyber-criminals exploiting vulnerable IoT links in keyless entry systems to steal luxury cars.

The proliferation of ransomware and increasing sophistication of cyber-criminal groups have boosted threats to automotive sector. Advanced persistent threat (APT) actors are specifically targeting vehicles and associated networks for financial gains or cyberespionage goals like stealing intellectual property.

Faced with mounting evidence of real cyberattacks moving closer to passenger harm, automakers must bolster vehicle protection at an accelerated pace. Their enhanced focus on proactively addressing cybersecurity threats will remain imperative for the automotive cybersecurity market.

Market Challenge - Growing Complexity in Vehicle Electronic Systems Makes Cybersecurity Implementation Costly

Growing complexity in vehicle electronic architecture and networks poses major challenges for effective automotive cybersecurity. With more ECUs and network points, the usable attack surface is expanding exponentially. This means automotive security specialists need to devote greater efforts towards code review, penetration testing and fixes for each new system/feature added.

Additionally, as ECUs take on more critical functions related to safety and driver assistance, the risks of attacks are magnifying as well. All of this requires significant investments into areas like dedicated security hardware, regular software updates, intrusion detection systems, and incident response teams.

Most players in the automotive cybersecurity market lack prior experience of dealing with such advanced in-vehicle security needs. With price competition already intense in the automotive industry, absorbing these additional cybersecurity costs can negatively impact margins. Standardization of security practices across the fragmented supply chain remains a challenge as well.

Market Opportunity - Introduction of Wireless Battery Management Systems for Electric Vehicles

One major opportunity in the automotive cybersecurity market arises from the growing electric vehicles (EVs) sector. As EVs rely on large and costly lithium-ion battery packs, battery management systems (BMS) have become a critical component.

As EVs continue gaining mainstream acceptance worldwide, big data from extensive wireless BMS (WBMS)-enabled fleets can help improve battery design and lifetime. Automakers are also exploring WBMS for new revenue models involving used battery leasing programs and performance-based warranties.

As WBMS proliferate across EVs, the market potential for suppliers of specialized wireless security solutions and monitoring services is very high. It can drive significant growth opportunities for automotive cybersecurity market players in the coming years.

Strategy 1: Focus on encryption and authentication

One of the primary strategies adopted by leading automotive cybersecurity solution providers such as Argus Cyber Security, ESCRYPT, and GuardKnox is to focus on developing strong encryption and authentication solutions.

Strategy 2: Adopt a holistic vehicle security approach

Many top players such as Intel, Harman, and Airbiquity have focused on providing end-to-end or holistic vehicle security solutions rather than point solutions.

Strategy 3: Strengthen security through the vehicle lifecycle

Leading companies like DENSO, NXP, and Infineon have adopted a strategy of offering security solutions throughout the vehicle lifecycle from design to decommissioning.

Strategy 4: Form strategic collaborations and partnerships

Top automotive cybersecurity vendors such as Karamba Security, GuardKnox, and Secunet have partnered with leading automakers as well as suppliers to stay close to market needs. For example, in 2021, Karamba partnered with BMW to collaboratively develop security measures.

Insights, By Security Type: Increased Connected Features Drive Demand for Wireless Network Security

In terms of security type, wireless network security contributes 43.4% share of the automotive cybersecurity market in 2024. This is due to the increasing number of connected features in modern automobiles. As vehicles become more connected and integrated with wireless technologies, the risks of cyber-attacks targeting these wireless networks also rises. Many automakers are now offering built-in modem and internet connectivity features as standard even in entry-level models.

To address this growing threat, OEMs are focusing on implementing strong authentication protocols and encryption standards to safeguard wireless vehicle networks. Technologies such as WiFi Protected Access 2 (WPA2), MAC address filtering and virtual private networks (VPNs) are becoming ubiquitous to prevent unauthorized access. Overall, the need to secure expanding wireless connectivity features from external threats is fueling demand for advanced network security controls within automotive cybersecurity solutions.

Insights, By Application: Safety Applications of ADAS Drive Adoption of Endpoint Security

In terms of application, the growth of advanced driver assistance systems (ADAS) and safety features account for 37.2% share of the automotive cybersecurity market in 2024.

Critical vehicle functions like braking, steering, engine control and advanced safety systems all depend on these ECUs operating securely and free of interference. Any potential compromise of an endpoint device like a sensor, actuator or body control module could therefore pose serious risks by enabling the manipulation of active safety and operational features.

To ensure the integrity of safety-critical endpoints, leading automakers are emphasizing endpoint protection strategies. Further, the emerging need to safeguard autonomous driving functionality and ADAS adds further urgency to address endpoint vulnerabilities. As next-gen vehicles increasingly rely on sensor fusion and sophisticated safety logic, robust endpoint security will be paramount. Accordingly, the necessity of protecting ADAS and safety systems at the device periphery is driving OEM focus towards comprehensive endpoint solutions.

• Over-the-Air (OTA) Updates: The increasing use of OTA updates for vehicle software has raised concerns about potential cyber threats during the update process, highlighting the need for secure update mechanisms.
• Remote Vehicle Hacking Demonstrations: Instances where security researchers remotely accessed vehicle controls have underscored vulnerabilities in automotive systems, prompting industry-wide emphasis on automotive cybersecurity.
• Connected Cars Growth: It's projected that by 2025, over 75% of vehicles shipped globally will be connected, significantly increasing the potential attack surface for cyber threats.
• Rise in Automotive Cyber Attacks: Reports indicate a 94% increase in automotive cyber attacks between 2018 and 2022, emphasizing the escalating threat landscape. This will give a major boost to the growth of the automotive cybersecurity market.

The major players operating in the automotive cybersecurity market include Harman International, Continental AG, Robert Bosch GmbH, NXP Semiconductors N.V., Argus Cyber Security Ltd., Karamba Security, ESCRYPT GmbH (a subsidiary of ETAS GmbH, part of Robert Bosch GmbH), Trillium Secure Inc., GuardKnox Cyber Technologies Ltd., Symantec Corporation, SheeldS (Formerly Arilou Automotive Cybersecurity), Vector Informatik GmbH, Broadcom Inc., Honeywell International, Inc., Guard Knox Cyber-Technologies Ltd., and Denso Corporation.

• In November 2023, Continental introduced a scalable telematics platform for agricultural machinery, emphasizing cybersecurity and compliance with the ISO/SAE 21434 standard. Additionally, Continental has been incorporating artificial intelligence (AI) into various aspects of its operations, such as using machine learning to create more precise forecasts of raw-material requirements.
• In October 2023, Harman International announced that its cybersecurity management system was audited and certified for compliance with the ISO/SAE 21434:2021 standard, which focuses on cybersecurity engineering for road vehicles. This certification underscores Harman's commitment to safeguarding connected vehicles against cyber threats.

• By Security Type
  • Wireless Network Security
  • Endpoint Security
  • Application Security
• By Application
  • Infotainment
  • ADAS & Safety System
  • Body Electronics
  • Powertrain
  • Telematics
• By Vehicle Type
  • Passenger Cars
  • Commercial Vehicles
  • Electrical Vehicles