Automotive Software Market Driving Transformation in SDVs Worldwide

The global automotive software market size was evaluated at USD 52.49 billion in 2024 and is expected to grow around USD 134.94 billion by 2034, registering a CAGR of 12.03% from 2025 to 2034.

Highlights of the Automotive Software Market

• Asia Pacific dominated the global market in 2024.
• North America is expected to witness significant growth in the market over the forecast period.
• By software layer, the application software segment accounted for a considerable revenue share of the market in 2024.
• By vehicle type, the passenger car segment registered the largest revenue share in 2024.
• By application, the autonomous driving segment held a dominant presence in the market in 2024.

Industry Valuation and Growth Rate Projection

The automotive software market refers to software and systems applied in vehicles, particularly in SDVs or software-defined vehicles. These vehicles make software a priority over hardware. For a safe, efficient, and functional transit, automotive software comes in handy. When systems like ADAS, i.e., Advanced Driver-Assistance Systems, are powered by software, the risks of road accidents can be mitigated, thus protecting the travelers.

As the vehicles with automation software programs are becoming increasingly acceptable these days, companies and businesses are forming partnerships with each other to support the industry to flourish.

• According to the McKinsey and Company research, there were a total of 812 mergers and acquisition deals involving automotive companies, which invested $196 billion in the year 2024.

Automotive Software Market: Stats and Figures

• A recent survey of product managers (PMs) assessed how much time Gen AI can save in 10 different use cases, and the outcome was that up to 39 percent of the time could be saved.
• In 2024, when respondents were asked in an IoT Analytics and Microsoft joint survey about how much capability to ascend or descend following market demand was required, 72% of them stated that a seamless facility was required.
• In a spectacular IBM Institute for Business Value (IBM IBV) survey, which consisted of over 200 global industry executives, 74% stated that 2035 vehicles are going to be software-defined and AI-powered. 
• As per the findings shown by PwC’s Global Automotive leader Harald Wimmer and regional PwC executives at the conference, the market share of EVs in the ASEAN-6 has risen significantly, from 225,000 units of private vehicle sales in 2023 to 351,000 units in 2024. 

Industry Leader Announcements

• Mary Barra, chair and CEO of General Motors:

“GM has enjoyed a longstanding partnership with NVIDIA, leveraging its GPUs across our operations. AI not only optimizes manufacturing processes and accelerates virtual testing but also helps us build smarter vehicles while empowering our workforce to focus on craftsmanship. By merging technology with human ingenuity, we unlock new levels of innovation in vehicle manufacturing and beyond.”

How Has AI Benefitted the Market

• The automotive software market has gone through a tremendous revolution with the advent of AI. The benefits provided by AI for the market are provided here:
• Traffic navigation: AI can determine the traffic as well as weather conditions to help drivers make decisions on which route is the most efficient to take.
• Helping the differently abled: Since AI can make driving autonomous, the physically challenged individuals can take a ride safely.
• Cost friendliness: The expenses involved in the process of manufacturing and selling the vehicles can be cut down using AI, as it helps the workflow to be streamlined.
• Diagnosis of risks: AI can identify the technical errors and dangers that might arise later and notify the drivers and passengers to be prepared for the same.

Recent Developments:

• In 2025, Tata Elxsi publicized a partnership with Mercedes-Benz Research and Development India (MBRDI) for manufacturing Software Defined Vehicles (SDV) and Vehicle Software Engineering.
• In 2025, General Motors prolonged its alliance with Nvidia to implement AI-powered technology in the next-generation vehicles and across production facilities.

Geographical Insights 

The global automotive software market is experiencing significant growth, with APAC maintaining its position as the dominant region while Europe emerges as the fastest-growing market. The North American region is expected to grow in the coming years.

North America

The automotive software market in North America is expected to grow at a substantial pace in the coming years, owing to companies coming up with technological advances for the upliftment of the automotive software sector.

• Intel and AWS have shaken hands to offer the customers a pioneering scheme for developing automotive software.
• The Zena CSS reduces chip development time by as far as 12 months and abbreviates silicon engineering by nearly 20% per project, while assisting Original Equipment Manufacturers OEMs and silicon dealers in introducing new vehicles in the market.

Europe

The automotive software market in Europe is growing swiftly, given that companies are collaborating to develop innovative automotive software.

• Tata Elxsi has partnered and signed a deal worth €50 million with the European original equipment manufacturer (OEM). While being a part of this association, Tata Elxsi will set up a dedicated Global Engineering Centre. 

APAC

The automotive software market of the APAC region stood in a leading position as a result of new technologies being tested effectively.

• After a long wait, the test of Nissan minivan, provided with the up-to-date generation of Nissan’s AV hardware and software, run by the chief scientist at Nissan’s Advanced Technology Center, Liam Pedersen, with 15 U.S.-based researchers, worked alongside colleagues in Japan, achieved success.

Competitive Landscape 

The automotive software market is highly competitive, with leading automotive companies such as Apple, NVIDIA, IBM, Google, Denso, Airbiquity, Bosch Software Innovations, Aptiv, Intel, ETAS, Elektrobit, Luxoft, MSC Software, Green Hills Software, Microsoft, and Lectronix holding the highest market share. Emerging automation software firms also play a crucial role by fostering a dynamic and evolving competitive landscape.

The market is dominated by several automotive companies renowned for their significant contributions to cancer research and treatment. Based on recent data, the top three leading companies are:

• Company Name: Apple Inc.
• Year of Incorporation: 1977
• Headquarters: California, United States

The yearly revenue of Apple Inc. was accounted to be $391,035,000 in 2024.

• Company Name: NVIDIA Corporation
• Year of Incorporation: 1993
• Headquarters: California, United States

The gross profit of NVIDIA Corporation jumped from $15,356,000 in 2023 to $44,301,000 in 2024.

Company Name: IBM Corporation

Year of Incorporation: 1911

Headquarters: New York, United States

The gross profit of IBM Corporation was positioned at $35,551,000 in 2024.

• Company Name: Apple Inc.
• Year of Incorporation: 1977
• Headquarters: California, United States

The yearly revenue of Apple Inc. was accounted to be $391,035,000 in 2024.

• Company Name: NVIDIA Corporation
• Year of Incorporation: 1993
• Headquarters: California, United States

The gross profit of NVIDIA Corporation jumped from $15,356,000 in 2023 to $44,301,000 in 2024.

• Company Name: IBM Corporation
• Year of Incorporation: 1911
• Headquarters: New York, United States

The gross profit of IBM Corporation was positioned at $35,551,000 in 2024.