Automotive Cybersecurity Market Set to Reach 7.85 Billion by 2031

Rising Connectivity Drives a New Security Imperative

The global automotive cybersecurity market is entering a decisive growth phase, with the sector projected to reach USD 7.85 billion by 2031. This expansion is being fueled by the rapid integration of connected technologies in vehicles, stricter regulatory frameworks, and a growing awareness of cyber risks within the automotive ecosystem.

Modern vehicles are no longer isolated mechanical machines; they are complex, software-driven platforms linked to the cloud, mobile networks, and external devices. As connectivity becomes a core feature for safety, efficiency, and user experience, it simultaneously opens the door to potential cyberattacks on critical vehicle systems.

Key Market Drivers: From Connected Cars to Autonomous Mobility

Several structural trends are underpinning the robust outlook for the automotive cybersecurity market:

Proliferation of connected vehicles – Infotainment systems, telematics units, digital keys, and over-the-air (OTA) updates are now standard in many new vehicles. Each connection point increases the potential attack surface and underscores the need for advanced cybersecurity solutions.
Growth of advanced driver-assistance systems (ADAS) and autonomous functions – Features such as adaptive cruise control, lane-keeping assistance, and automated parking rely on complex software and continuous data exchange. Protecting these systems from hacking is essential to ensure road safety.
Shift toward software-defined vehicles – Automakers are transitioning to architectures where core vehicle functions are governed by centralized software platforms. This shift demands robust cybersecurity frameworks that span the entire lifecycle of the vehicle.
Expansion of the electric vehicle (EV) market – EVs rely heavily on digital platforms for battery management, charging infrastructure, and navigation. Securing vehicle-to-grid (V2G) and vehicle-to-infrastructure (V2I) communications is becoming increasingly important.

Regulations and Standards Accelerate Adoption

Governments and international bodies are playing a critical role in shaping the automotive cybersecurity landscape. Regulations are moving from recommendations to mandatory standards, compelling manufacturers to integrate security by design.

Global frameworks such as UNECE WP.29 cybersecurity regulations and international standards like ISO/SAE 21434 (Road Vehicles – Cybersecurity Engineering) require automakers to implement rigorous cybersecurity management systems. Compliance is no longer optional for companies that wish to sell vehicles in key markets, especially in Europe and other regions adopting similar guidelines.

These regulations are driving:

Formal risk assessment processes across the entire vehicle lifecycle
Continuous monitoring and incident response capabilities
Secure software development and update mechanisms
Stronger collaboration between OEMs, suppliers, and cybersecurity specialists

Market Segmentation: Solutions, Services, and Applications

The automotive cybersecurity market can be broadly categorized into security solutions and cybersecurity services:

Security solutions – This includes embedded security hardware and software such as firewalls, intrusion detection and prevention systems (IDPS), secure gateways, encryption modules, and secure onboard communication frameworks. These technologies protect in-vehicle networks like CAN, LIN, FlexRay, and Ethernet.
Cybersecurity services – Consulting, vulnerability assessments, penetration testing, security operations center (SOC) services, and managed detection and response are increasingly in demand. Many automakers rely on specialized providers to manage ongoing cybersecurity operations.

From an application standpoint, cybersecurity is being integrated into:

Telematics and infotainment – Securing connectivity to smartphones, cloud services, and external applications.
ADAS and safety systems – Ensuring that crucial driving assistance features cannot be manipulated.
Powertrain and body control – Protecting core vehicle functions from unauthorized access.
Over-the-air updates – Guaranteeing the integrity and authenticity of software updates throughout the vehicle’s life.

Regional Outlook: North America, Europe, and Asia-Pacific in Focus

North America and Europe currently lead the automotive cybersecurity market, supported by:

High adoption of connected car technologies
Early implementation of cybersecurity regulations and standards
Presence of major automotive OEMs and technology providers

The Asia-Pacific region is expected to experience strong growth as countries such as China, Japan, and South Korea accelerate investment in connected and autonomous vehicle technologies. Expanding vehicle production, rising consumer expectations for digital features, and supportive government initiatives are boosting demand for cybersecurity solutions.

Competitive Landscape and Industry Collaboration

The market is characterized by a mix of established cybersecurity firms, automotive suppliers, semiconductor manufacturers, and specialized startups. Companies are increasingly forming strategic partnerships to combine automotive engineering expertise with deep cybersecurity knowledge.

Common strategies include:

Joint development of security platforms integrated directly into vehicle electronic control units (ECUs)
Acquisitions of niche cybersecurity firms by larger automotive or technology players
Cooperation with cloud providers to secure data flows between vehicles and backend systems

Industry alliances and working groups are also emerging to develop best practices, share threat intelligence, and create interoperable security frameworks that can be deployed across multiple brands and regions.

Challenges and Future Opportunities

Despite strong growth prospects, the automotive cybersecurity market faces several challenges:

Complex supply chains – Vehicles integrate components from numerous suppliers, making it difficult to enforce consistent cybersecurity standards across all tiers.
Legacy systems – Older vehicle platforms and infrastructure may not have been designed with cybersecurity in mind, complicating secure integration.
Shortage of specialized talent – The automotive sector is competing with other industries for skilled cybersecurity professionals.

At the same time, new opportunities are emerging in areas such as:

AI-driven threat detection tailored to vehicle environments
Security analytics platforms for large connected fleets
Cybersecurity-as-a-service models for smaller OEMs and mobility providers

Conclusion: Security as a Cornerstone of the Future Automotive Ecosystem

As vehicles evolve into connected, software-centric platforms, cybersecurity is becoming a foundational requirement rather than an optional add-on. The projected rise of the automotive cybersecurity market to USD 7.85 billion by 2031 reflects a broad recognition across the industry that safeguarding digital functions is essential to protecting passengers, infrastructure, and brand trust.

Manufacturers, suppliers, regulators, and technology partners that prioritize robust cybersecurity strategies today will be better positioned to compete in a future defined by connected, electric, and autonomous mobility. In that future, the security of data and systems will be as critical as the physical safety features that have long been central to automotive design.