AI in Transportation Market

INCREASING FOCUS ON ENHANCING DRIVER AND VEHICLE SAFETY

A rising number of road accidents and deaths are a major global concern. Developing intelligent systems for road traffic is a way of solving road traffic safety and other such issues. Enabling an even faster connection between transport systems, the 5G network will offer new application options to advance autonomous cars. 5G is expected to have a positive impact on road maintenance with the rise of video and radar data. For instance, road maintenance crews will be able to receive alerts of life-threatening hazards on the road.

The use of AI and 5G will ultimately improve road safety, reducing the total number of accidents on the road.

Autonomous vehicles (AVs) or self-driving vehicles will be able to reduce the risk of alcohol or drug-impaired drivers getting behind the wheel of a conventional vehicle. The continuing evolution of automotive technology aims to deliver greater safety benefits and deliver automated driving systems (ADS). Automated vehicles help reduce crashes, prevent injuries, and save lives. For instance, in June 2020, Mercedes-Benz partnered with NVIDIA to develop an in-vehicle computing system and an AI infrastructure for use in Mercedes models and is expected to roll out in 2024. NVIDIA’s AI computing architecture will aid Mercedes to streamline its progress in autonomous driving.

The Global AI in Transportation Market Industry is poised for substantial growth, with projections indicating a rise from 2.75 USD Billion in 2024 to 8.26 USD Billion by 2035. This trajectory suggests a compound annual growth rate of 10.54% from 2025 to 2035, reflecting the increasing integration of AI technologies across various transportation sectors. The anticipated growth underscores the importance of AI in enhancing efficiency, safety, and sustainability within the transportation landscape.

The implementation of AI-driven traffic management systems is transforming urban mobility, thereby propelling the Global AI in Transportation Market Industry. These systems utilize real-time data analytics to optimize traffic flow, reduce congestion, and improve safety. For instance, cities like Los Angeles are adopting AI technologies to manage traffic signals more effectively, which has resulted in a notable decrease in travel times. The anticipated compound annual growth rate of 10.54% from 2025 to 2035 indicates a growing recognition of AI's potential in enhancing urban infrastructure and mobility solutions.

The increasing demand for autonomous vehicles is a primary driver of the Global AI in Transportation Market Industry. As consumers seek safer and more efficient transportation options, manufacturers are investing heavily in AI technologies to enhance vehicle automation. In 2024, the market is projected to reach 2.75 USD Billion, reflecting a significant shift towards self-driving technology. Companies like Waymo and Tesla are at the forefront, utilizing AI for navigation and decision-making processes. This trend suggests a robust growth trajectory, as the market is expected to expand further, potentially reaching 8.26 USD Billion by 2035.

The convergence of AI and Internet of Things (IoT) technologies is reshaping the Global AI in Transportation Market Industry. This integration enables real-time data sharing and analysis, enhancing operational efficiency across transportation networks. For instance, connected vehicles equipped with AI algorithms can communicate with traffic management systems to optimize routes and reduce delays. As the IoT ecosystem expands, the potential for AI applications in transportation will likely increase, driving market growth and innovation in the coming years.

Safety and regulatory compliance remain paramount in the transportation sector, driving the adoption of AI technologies. The Global AI in Transportation Market Industry is witnessing a surge in AI applications that enhance safety protocols and ensure adherence to regulations. For example, AI systems are being deployed to monitor driver behavior and vehicle performance, thereby reducing accident rates. This focus on safety is likely to contribute to market growth, as stakeholders recognize the importance of integrating AI solutions to mitigate risks and enhance operational efficiency.

Investment in smart infrastructure is a crucial factor influencing the Global AI in Transportation Market Industry. Governments and private entities are increasingly allocating resources towards developing intelligent transportation systems that leverage AI for improved efficiency and sustainability. Initiatives such as the Smart Cities program in various countries aim to integrate AI technologies into transportation networks, facilitating better connectivity and resource management. This trend is expected to bolster market growth, as the demand for innovative solutions continues to rise, aligning with global sustainability goals.

By Region, the study provides market insights into North America, Europe, Asia-Pacific, Middle East and Africa and South America. The North America AI in Transportation market accounted for ~39.8% in 2022. North America is likely to be the largest contributor to the AI transportation market. This includes the US, Canada, and Mexico. Some of the factors responsible for the growth of the market include the rising need for enhanced operational efficiency and increasing adoption to enhance driver and vehicle.

Moreover, the presence of established players such as Intel Corporation, Microsoft Corporation, IBM Corporation, Magna International Inc. is one of the factors driving the growth of the regional market.

Canada is likely to follow the US in terms of regional market share. The growth of the regional market can be attributed to the increasing need for vehicle safety in autonomous vehicles and achieving operational efficiency. For instance, in November 2020, The Magna International launched Gen5 “one-box” solution is a Mobileye EyeQ5-based system—one of the industry’s first where the forward-facing camera and related software are contained in a single assembly.

FIGURE 3: AI IN TRANSPORTATION MARKET SIZE BY REGION 2022 VS 2032

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

Further, the major countries studied in the market report are the U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, South Korea, and Brazil.

The global market for AI in transportation has witnessed significant growth over the forecast period due to the growing need for enhanced vehicle safety. There are several domestic, regional, and global players operating in the AI in transportation market who continuously strive to gain a significant share of the overall market. During the study, MRFR has analyzed some of the major players in the AI in Transportation Market who have contributed to the market growth. These include Siemens Mobility, Nvidia Corporation, NEC Corporation, Huawei Technologies Co.

Ltd, Valeo, Daimler AG, Scania, Continental AG, Magna International Inc., Intel Corporation, IBM Corporation, AB Volvo, Microsoft, Robert Bosch GmbH, and ZF Friedrichshafen AG.

Among these, Robert Bosch GmbH, Continental AG, Daimler AG, Nvidia Corporation, and ZF Friedrichshafen AG are among the top 5 players in the AI in Transportation Market. These players focus on expanding and enhancing their product portfolio and services to remain competitive and increase their customer base. Additionally, these players are focusing on partnerships & collaborations to expand their business and customer base to enhance their market position.