Automotive cybersecurity market seen reaching $32.27 billion by 2035

Automotive cybersecurity is projected to grow to $32.27 billion by 2035, according to a new market outlook, as connected, autonomous and software-defined vehicles expand the threat surface. Embedded security software led the market in 2024, and regulators in the EU and elsewhere are pushing automakers to harden vehicles end to end.

Why it matters: - Connected vehicles are turning cybersecurity into a core safety and compliance issue, not just an IT expense. - The market’s projected growth to $32.27 billion at a 17.6% CAGR signals rising demand for in-vehicle protection, cloud monitoring and secure software updates. - Regulatory pressure from UN Regulation No. 155, UN Regulation No. 156 and ISO/SAE 21434 is forcing automakers and suppliers to build security into vehicle lifecycles.

What happened: - A new market outlook projects the automotive cybersecurity market will reach $32.27 billion by 2035. - Embedded security software held a 40.5% share of the market in 2024, driven by OEM demand for tamper-proof firmware layers. - North America held the largest regional share, Europe was the fastest-growing compliance-driven market and Asia-Pacific emerged as the growth engine. - The report identifies software as the segment expected to dominate by 2030.

The details: - Automotive cybersecurity covers encryption, intrusion detection systems, firewalls, secure over-the-air updates and threat monitoring for vehicle systems and data. - The market growth outlook is tied to more connected, autonomous and software-defined vehicles. - The report cites a rise in sophisticated cyberattacks, with 92% of automotive cyber incidents carried out remotely. - Industry memory of the 2015 Jeep Cherokee hack continues to shape risk perception after researchers remotely accessed steering and braking functions. - Vehicle/on-board systems security covers ECUs, infotainment, telematics, ADAS and V2X modules. - Backend and telecom security protects cloud platforms, telematics servers and communication channels tied to 5G and V2X infrastructure. - Production security focuses on OT and IIoT systems in manufacturing and on secure software supply chains. - Embedded security software includes runtime protection on ECUs, secure boot and application security layers. - Hardware security modules provide root-of-trust functions, secure key storage and cryptographic tools. - Cloud-based security platforms support fleet threat detection, analytics and centralized monitoring. - Professional services include vulnerability assessment, secure development lifecycle consulting, incident response and post-market telemetry. - On-premises, cloud and hybrid deployment models each play a role in OEM and supplier security architectures. - OEMs are the largest end-user group because they must integrate cybersecurity into new vehicle platforms and meet regulatory requirements. - Tier-1 suppliers are being pushed to deliver components with embedded security features. - Smart-factory operators are securing production environments, while aftermarket and fleet operators need ongoing monitoring for connected vehicles. - Continental AG, Robert Bosch GmbH, Denso Corporation, Harman International and NXP Semiconductors are among the leading companies named in the report. - The top three players together hold about 25% of the global market. - HL Mando Corporation partnered with Argus Cyber Security in 2023 to integrate a CAN intrusion detection system into electrification systems such as brakes and steering. - The European Union’s UN Regulation No. 155 took effect in July 2022 and requires new vehicles sold in the EU to include cybersecurity measures. - UN Regulation No. 156 addresses over-the-air software updates. - The US Department of Transportation’s AV 4.0 framework and NHTSA efforts are shaping higher cybersecurity expectations in the US.

Between the lines: - The market is shifting from reactive defenses to predictive and collaborative security models. - Vehicle Security Operations Centers, AI-driven adaptive firewalls and shared threat-intelligence networks are emerging as the next competitive layer. - Security-by-design is becoming standard because retrofits are costlier and less reliable. - The report also points to major constraints, including high implementation costs, a shortage of automotive cybersecurity talent, complex supply chains and legacy vehicles that are hard to update. - Subscription-based security models still face consumer resistance. - The strongest opportunities sit in AI-powered threat detection, secure OTA platforms, V2X protection, managed security services and quantum-resistant cryptography.

What's next: - Automakers and suppliers are expected to keep investing in secure development lifecycles, hardware roots of trust and cloud-based fleet protection. - Europe should stay the fastest-growing region for regulation-driven adoption, while North America remains the largest revenue market. - Asia-Pacific is likely to keep gaining share as connected car production and EV adoption expand in China, Japan, South Korea and India. - The report expects predictive AI security, zero-trust architectures and Vehicle SOCs to reshape the market over the medium and long term.

The bottom line: - Automotive cybersecurity is moving from a niche layer to a required design principle for modern vehicles, with regulation, connectivity and software-defined platforms driving the next phase of growth.