Due to the rising concerns for vehicle and driver safety, increasing focus on lowering the transportation costs, and advancements in autonomous vehicles, the artificial intelligence (AI) in transportation market is witnessing significant growth. In 2017, the market valued at $1.4 billion, and it is predicted to generate a revenue of $3.5 billion by 2023, exhibiting a CAGR of 16.5% during the forecast period (2018–2023). AI in transportation involves the use of computer vision, deep learning, and natural language processing technologies.
Video camera, radio detection and ranging (RADAR) sensors, and light detection and ranging (LiDAR) equipment are some of the AI-based hardware installed in fully autonomous vehicles which are under trial. Based on application, the AI in transportation market is bifurcated into human-machine interface (HMI) and advance driver-assistance system (ADAS). Of these, during the historical period (2013–2017), HMI dominated the market in terms of revenue, and it is expected to maintain its lead during the forecast period, owing to its extensive penetration in trucks compared to ADAS.
However, ADAS is anticipated to witness faster growth during the forecast period as it helps in easy handling of the vehicle while driving and parking, and also reduces the chances of accidents by giving prior alarms and warnings. Based on offering, the AI in transportation market is categorized into software and hardware. Of the two, during the historical period (2013–2017), the software category led the market, and it is predicted to dominate it during the 2018–2023 period as well. This is ascribed to the rising deployment of software as a platform, such as Microsoft Azure, in HMI applications.
In the past few years, the market has witnessed a considerable number of partnerships and mergers and acquisition activities. Technology-based start-ups are being acquired by large original equipment manufactures. For instance, in February 2018, NVIDIA corporation and Continental announced that they are coming into a partnership to manufacture AI self-driving vehicle systems modeled on the NVIDIA DRIVE platform, with a market introduction in level 3 autonomous vehicles in 2021. Thus, the trend of partnerships is likely to drive the growth of the AI in transportation market during the forecast period.
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Further, the advancements in autonomous vehicle technology are anticipated to bring a big change in the transportation sector. AI is the only technology that offers real-time and reliable object recognition around vehicles. AI-powered systems enable the coordination, monitoring, and optimization of fleet utilization, lowering of the operation costs, and escalation in the level of services. Automakers such as Volvo AB, and Tesla Inc., automotive suppliers including Valeo SA, and Delphi Technologies PLC, and technology companies such as Google Inc. are focusing on autonomous trucks and other vehicles for commercial purposes.
For instance, in November 2017, Tesla launched an electric semi-truck with semi-autonomous features. Apart from this, many start-ups including nuTonomy Inc., TuSimple Inc., and Nauto Inc. are manufacturing commercial vehicles and passenger cars equipped with autonomous driving systems. The rising consumer preferences toward safe and secured commute is encouraging the automakers to deploy AI in their automobiles. Autonomous vehicles equipped with smart features are anticipated to fuel the AI in transportation market growth in the long term, globally.
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Hence, increasing consolidation among manufacturers, and autonomous vehicle technology advancements for better safety and security are augmenting the market progress.