Future Automotive Technologies 2024-2034: Applications, Megatrends, Forecasts
The automotive industry is undergoing a period of profound transformation, driven by several key megatrends that are reshaping the future of vehicles. Autonomous driving, mobility as a service, electric vehicles (EVs), connected cars, and software-defined vehicles are just some of the technologies at the forefront of this evolution, representing a massive $1.6 trillion market opportunity by 2034, according to IDTechEx.
This transformation encompasses everything from autonomous driving and the rise of robotaxis to the increasing adoption of electric vehicles and the potential of connected car services.
Autonomous Driving
Autonomous driving presents two significant opportunities: the expansion of the automotive perception sensor market and the growth of the autonomous mobility sector. The market for automotive perception sensors already exceeds $10 billion, largely fueled by cameras and radars used in advanced driver-assistance systems (ADAS).
ADAS technologies, including adaptive cruise control, automatic emergency braking, and lane-keeping assistance, are increasingly standard features. These systems typically rely on a combination of radars and cameras, and are becoming commonplace in new vehicles, with partially automated Level 2 vehicles now widely available.
While Level 2 systems will continue to see growth, the introduction of SAE Level 3 technologies is the main driver behind an expected 13.6% compound annual growth rate (CAGR) over the next decade. The Mercedes S-Class has already brought Level 3 self-driving technology to consumers in multiple regions, marking a pivotal moment in the journey toward more widespread adoption.
Autonomous driving also promises a cheaper and safer form of mobility through robotaxis. These vehicles will require even more sensors than consumer vehicles, with each robotaxi potentially equipped with tens of thousands of dollars worth of hardware.
The financial opportunity lies more in the service provided than in the hardware used. Considering the current volume of vehicle miles traveled – exceeding ten trillion annually – robotaxis have the potential to generate hundreds of billions of dollars in revenue, as they take on some of this demand. This study provides analysis of current robotaxi services, their performance, and deployment, as well as forecasts for their expansion. It also includes the progression of robotaxis toward becoming a mainstream alternative to vehicle ownership.
Electrification
Electric vehicles transitioned from early adopter technologies to the mainstream in 2022 and 2023. This shift has been accelerated by growing pressure to decarbonize the automotive industry and mitigate climate change. The looming bans on internal combustion engines (ICE) in various nations, along with manufacturers’ internal targets for phasing out ICE vehicles, virtually guarantee EV’s future dominance. The main opportunity lies in new components these vehicles require. Large lithium-ion batteries, powerful traction motors, and associated power electronics, which were not previously a significant part of the automotive market, are now essential.
In 2023, these components combined for over a $100 million market, which will grow significantly over the next decade, and constitute a major portion of the $1.6 trillion future automotive technologies market.
Connected and Software-Defined Vehicles
Connectivity has been present in vehicles for many years, allowing OEMs to receive key information. However, the paradigm shift arises from how OEMs are utilizing vehicle connectivity and modern luxury features to create new revenue streams. Some optional extras, such as heated steering wheels, are already transitioning to a subscription model where customers pay only when needed, such as during the winter.
New luxury features, such as advanced driver-assistance systems, are increasingly defined by software rather than hardware. Subscription models can be created for ongoing updates, keeping the vehicle’s systems up to date and operating smoothly.
In addition to in-vehicle luxury features, connectivity can support in-car payments. Future vehicles will be able to automatically pay for parking, charging, and drive-through food purchases.
The intention is for OEMs to collect transaction fees, enabling them to generate additional profits through vehicle connectivity. This study provides a detailed overview of applications enabled by connectivity, the functionality of software-defined vehicles, and the enabling technology, with associated service revenue projections for the year 2034.
In-Cabin Sensing
Since the advent of early lane-keeping assistance systems, cars have needed to determine if the driver is still in control of the wheel. Torque sensors in the steering system were the most common way of doing this, but these can be deceived. Modern ADAS systems and the emergence of Level 3 systems, where hands-off driving is available in certain situations mean that more sophisticated driver monitoring systems are required.
This report highlights the new technologies that are emerging to monitor driver attentiveness, as well as to protect children and pets that could be left behind. The advantages and disadvantages of each system are detailed, and their market prospects forecasted.
Through these prominent megatrends, the automotive industry is undergoing an irreversible transformation, impacting how customers drive, interact with, and own vehicles. The 10-year forecasts in this report provide insights into the most disruptive technologies in the industry.
