Automotive Ethernet Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Automotive Ethernet Market Data

Automotive Ethernet Market Analysis

The automotive ethernet market generated revenue of USD 2,612.7 million in 2023, which is expected to witness a CAGR of 20.2% during 2024–2030, to reach USD 9,385.5 million by 2030. The major factors responsible for the growth of the market include the declining cost of ethernet technology and the increasing use of smart infotainment systems and advanced driver assistance systems (ADAS) in vehicles.

Furthermore, investments in the connected car concept can provide lucrative opportunities to players operating in the market. Along with this, government schemes and initiatives regarding the integration of advanced safety features and deployment of connected vehicles play an important role, as they minimize the overall cost to manufacturers and customers.

Moreover, automotive ethernet enables the seamless integration and transmission of large volumes of data between different vehicle systems, enabling real-time updates, reconfigurations, and enhancements in SDVs. As these vehicles evolve, enhancing the capabilities and connectivity of in-car systems, the market is expected to grow in response to the increasing need for efficient, high-bandwidth networking in vehicles.

The use of ethernet for communication between ECUs, sensors, and control units improves the interoperability and efficiency of these systems within a software-defined architecture. The emergence of SDVs presents a lucrative opportunity for automotive ethernet, positioning it as a robust networking solution for the automotive industry's progressively software-centric future.

Several factors associated with human drivers, such as the failure to pay attention, inappropriate speed, and unsafe distance from the vehicle moving in front, are responsible for road accidents. Thus, various countries have issued regulations regarding the integration of safety systems in vehicles, which is why key players are integrating connected safety and security systems into vehicles.

Moreover, the integration of real-time connectivity with tire pressure monitoring systems, lane departure warning systems, and roadside assistance is resulting in the market growth.

Automotive Ethernet Industry Trends & Drivers

Advent of Autonomous Vehicles and Connected Solutions Is a Major Market Trend

• The sale of autonomous vehicles is consistently increasing across the world due to the rapid technological advancements and added features they offer over conventional vehicles.
• These include smartphone connectivity within the vehicle, roadside assistance, traffic and collision warnings, and automobile diagnostics, coupled with higher levels of autonomy to reduce risky and dangerous driver behavior.
• In this regard, automotive ethernet can replace traditional cabling for connectivity, as it connects vehicle components with lighter and more effective wires, thus reducing the connectivity cost and cabling weight.
• Therefore, the advent of autonomous and connected vehicles is a major trend being witnessed in the automotive ethernet market.

Increased Demand for Connected Solutions for Greater Passenger Convenience in Vehicles

• The integration of advanced solutions, such as communication, connected devices, and artificial intelligence (AI) technology, in connected vehicles is radically guiding the automotive industry toward innovation, thereby increasing customer satisfaction and enhancing the driving experience.
• Moreover, several proprietary standards for communication are used in automobiles, with each component typically using a dedicated cable or wire.
• By moving to a single standard, all the communications from the different components can coexist on the same switched ethernet network, with a single pair of wires going to each location in the vehicle from a central switch.
• In addition, with the advancements in technologies, the electronic systems of vehicles are becoming more complex, with more controllers, sensors, and interfaces, which require a higher bandwidth.
• These electronic components need to continuously communicate with each other in the connected vehicle, thus resulting in a high demand for automotive ethernet solutions in coming years.

Expensive Installation Cost of Automotive Ethernet

• The high installation cost of automotive ethernet is one of the restraining factors for the market growth. The high cost is due to the development of software, hardware, testing, various security checks, and retrofits for old vehicles, which is a major challenge to the market’s expansion and therefore their adoption.
• In addition to that, switches, transceivers, and cables are ethernet-based components that are inherently more costly than traditional CAN and FlexRay solutions, driving up overall operation costs.
• Also, the development of software applications that effectively utilize the advanced features of automotive ethernet demands specialized skills and resources, adding to the financial burden.
• Rigorous testing and validation procedures ensure reliability and performance in demanding automotive environments but also raise costs and development timelines.
• Moreover, the rising cyber security risks targeting advanced vehicles pose a threat to both manufacturers and consumers, limiting the growth and expansion potential of the market.

Market Segment Breakdown

Component Insights

• The services category is projected to grow at the highest CAGR, of 20.6%, during 2024–2030, as well it holds the largest market share.
• The challenges faced during the deployment of ethernet in vehicles have propelled the demand for implementation, consulting, and training & support services.
• To simplify the complexity, the demand for consulting services has increased among original equipment manufacturers (OEMs).
• Moreover, this category comprises a broad variety of solutions including design, maintenance, integration, testing, consultation, and support for more complex ethernet-based systems.

During the study, the following components are covered in the report:

• Hardware
• Software
• Services (Fastest-Growing and Largest Category)

Bandwidth Analysis

• With OEMs seeking to implement high-speed and low-latency networks with good connectivity in vehicles, the 1 Gbps category is expected to witness the fastest growth during the forecast period, on the basis of bandwidth.
• Furthermore, key players in the automotive ethernet market are heavily investing in the development of 1-Gbps-bandwidth networking solutions to offer smooth functioning and high-speed data transmission.

Below are the four ranges of bandwidth in which automotive ethernet is used:

• 1 Mbps
• 100 Mbps
• 1 Gbps (Largest and Fastest-Growing Category)
• More than 1 Gbps

Application Analysis

• The advanced drive assistance systems category holds the largest market share. This is due to the increasing demand for advanced safety features and improved fuel efficiency of vehicles.
• In this regard, the rising number of regulations for integrating ADAS into automobiles, such as the mandates for anti-lock braking systems (ABS) in all new passenger cars in the European Union (EU) and the U.S., are driving the growth of the automotive ethernet market in this category.
• Whereas, the infotainment system category is projected to witness the highest CAGR, of 20.5%, during 2024–2030. As key players in the industry are providing artificial intelligence (AI) software for in-vehicle infotainment systems, it is increasing customer satisfaction and enhancing the driving experience.
• Infotainment in automobiles refers to the integration of information and entertainment systems that improve the driving experience for passengers. These systems offer a variety of features, including multimedia entertainment, navigation assistance, connectivity, and in-car communication.
• Further, it also allows passengers to enjoy a range of entertainment options, such as music, videos, and streaming services. It also includes GPS navigation for directions and traffic updates, as well as connectivity features that enable seamless integration with smartphones for hands-free calling, messaging, and access to apps.

Below are the major applications in which automotive ethernet plays an important role:

• Advanced Driver-Assistance Systems (ADAS) (Largest Application Category)
• Infotainment System (Fastest-Growing Category)
• Powertrain

Asia-Pacific is Growing with 20.8% CAGR

• Geographically, APAC is the fastest-growing market, advancing at a CAGR of 20.8% during 2024–2030. The key factors responsible for this growth would be technological developments, favorable regulations, and positive economic growth in regional countries.
• Moreover, the number of manufacturers in the region is increasing annually. In addition, China and India are the fastest-growing nations in terms of population, so the demand for automobiles is naturally high.
• On the other hand, North America held the largest market share, of around 50%, in 2023. This dominancy is due to the rising adoption of EVs and PHEVs that depend on reliable communication networks and high speed for effective battery monitoring, power management, and integration of advanced features.
• According to a recent report by the International Energy Agency, the sales of electric vehicles reached 425 billion in 2022, driving up the demand for automotive ethernet.
• Furthermore, key contributors such as NXP Semiconductors N.V. and Microchip Technology play a crucial role in advancing the market for automotive ethernet in this region.
• For instance, Microchip Technology introduced a terabit-scale secure ethernet physical layer designed to facilitate the shift to 112G Pulse Amplitude Modulation 4-level (PAM4) connectivity. This release is intended to enhance transmission signals, connectivity, and data transfer speeds across ethernet switching platforms.

Further, regions and countries analyzed for this report include:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Market Nature - Consolidated

In recent years, players in the market for automotive ethernet have launched several new electronic components to gain a competitive edge over other players. Moreover, the companies are focusing on improving their existing products and investing on new developing new technologies to expand their reach.

Automotive Ethernet Industry News

• Microchip Technology has announced the expansion of its Detroit Automotive Technology Center in Novi, Michigan. The new 24,000-square-foot building includes additional high-voltage and E-mobility labs, as well as technical training rooms for automotive clients to develop and enhance solutions.
• Broadcom Inc. has announced the launch of its high-bandwidth monolithic automotive ethernet switch device, the BCM8958X in 2022. This device is specifically designed to meet the increasing bandwidth requirements for in-vehicle networking applications and to facilitate the adoption of software-defined vehicles (SDVs).
• Toshiba Electronics Europe GmbH announced the launch of “the TC9563XBG” a new ethernet bridge IC. The bridge is planned for usage in automotive zonal architecture, telematics or gateways, infotainment, and industrial equipment.
• Marvell launched an automotive ethernet switch chip, Brightlane 88Q519, that is a 16-port switch combined with 100BASE-T1, 1000BASE-T1, and 10BASE-T1S PHYs which is fully compliant with the valid IEEE 802.3 standards.
• This switch offers higher port counts and higher bandwidth. Moreover, it also supports 16 interface ports and ethernet speeds ranging from 10 Mb/s to 1 Gb/s, with an advanced security subsystem to protect against hackers.