Automotive Ethernet Market by Component (Hardware, Software, and Services), Vehicle Type (Passenger Cars and Commercial Vehicles), Application (Chassis, Infotainment, Driver Assistance, Powertrain, Body and Comfort, and Others), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2022–2031

Global Automotive Ethernet Market Analysis

The global automotive ethernet market size was valued $2,135.1 million in 2021 and is predicted to grow with a CAGR of 14.4%, by generating a revenue of $8,765.8 million by 2031.

Global Automotive Ethernet Market Synopsis

Automotive ethernet is a physical network that is used to connect various components in a car using a wired network. Automotive manufacturers are increasingly adopting various advanced car functions such as high-powered entertainment systems, seat heating control, advanced airbags, voice input system, Bluetooth integration, automatic mirrors, navigation systems, smartphone connectivity, driver-responsive performance, etc. All of these automotive applications are increasing the bandwidth requirements and making the software used in cars more complicated. Hence, automotive manufacturers are adding more computer-based systems, connections, and applications. However, it is increasing the cost of cabling, network interfaces, etc. Automotive Ethernet deployment will reduce these costs. Several trends show that major car manufacturers are intending to move to Ethernet for all classes of cars in addition to the luxury class.

Automotive ethernet relies heavily on forward error correction (FEC) signal processing techniques to ensure the validity of the data being transmitted. Adding the redundant data bits, however, increases overhead to the link and reduces the effective bandwidth. Moreover, the FEC-based solutions can effectively react to only moderate noise profiles, hence, making them unsuitable for handling instant noises from EMC events.

Earlier there were only limited in-vehicle applications that needed a very low amount of data in few kbps. However, advancements such as driver-assistance systems (ADAS), have led to increasing in the demand for bandwidth. Due to the introduction of ethernet systems in the vehicle-internal networks, the bandwidth can be increased significantly as compared to legacy bus systems. Furthermore, software or configuration updates can be distributed faster. These advantages of automotive ethernet systems are anticipated to have a positive impact on the automotive ethernet market outlook during the forecast period.

Automotive Ethernet Overview

Automotive ethernet is the physical network that is mostly used to link components within the car using a cable. Automotive ethernet offers crucial benefits including the connection between electric vehicles and charging stations, in-vehicle communication, etc. There are numerous communication bus systems in a car such as CAN, FlexRay, LVDS, MOST, etc. Every vehicle component has its dedicated wiring and communication needs. The wiring harness is the 3rd highest-cost element in a car owing to the complex cabling. With the use of automotive ethernet, the cost of automobiles can be reduced greatly as compared to the standard wire harness. 

COVID-19 Impact on Automotive Ethernet Market

The COVID-19 pandemic had adversely impacted many businesses with unprecedented challenges around the globe. With the government imposing lockdowns and quarantine mandates many daily activities were halted. These restrictions refrained people from visiting dealership showrooms to buy vehicles, resulting in a steep decline in vehicle sales. The world economy took a hit which has been worse than many earlier economic crises earlier and obstructions in international operations negatively affected the automotive industry, across the globe. This in turn, also affected the global automotive ethernet market growth. However, advancements in the COVID-19 vaccination, government stimulus packages, and the recovery in the global economy have initiated a growth trend in the automotive sector.

Growing Vehicle Demand Worldwide along with Increasing Adoption of Advanced Technologies in the Automotive Industry are Expected to Drive the Automotive Ethernet Market

The massive automotive ethernet market growth is majorly attributed to the increased demand for vehicles across the globe. Ease in supply chain disturbances post-COVID-19 pandemic led numerous vehicle manufacturers to register healthy vehicle production and sales. Presently, consumers are increasingly inclined toward experiencing an advanced in-car experience, hence, there is a tremendous rise in digital transformation in the automotive industry. The addition of innovative solutions such as connected devices, machine learning (ML) and artificial intelligence (AI), connected vehicles, etc. accelerates innovation in the automotive industry and ultimately, increases automotive ethernet market demand. solutions. Companies are highly focusing on intelligent automotive ethernet solutions to design the cutting-edge, high-bandwidth communications systems required by next-generation vehicles.

Increasing Number of Potential Attackers May Restrain the Automotive Ethernet Market Growth

The number of potential attackers on ethernet systems is higher compared to other automotive bus technologies. Yet there are no standardized techniques for automotive ethernet networks to limit access to untrusted devices. The misuse of devices such as modifications of software parts and the replacement of components with third-party devices can direct undefined behavior and impact the security of the vehicle. Thus, it is crucial to ensure consistency of the automotive ethernet network by controlling access to unknown network participants, misbehavior of existent devices, as well as any spoofing attempts.  

Growing Emphasis on the Reduction of Carbon Footprint to Create Investment Opportunities

Carbon emission is one of the major concerns these days due to global warming and CO₂ is one of the major contributors to global warming. The vehicular emissions greatly lead to CO₂ emissions. For instance, according to research conducted by U.S. Environmental Protection Agency, in 2019, greenhouse gas emissions from the transportation sector accounted for around 29% of total U.S. greenhouse gas emissions. Therefore, the adoption of ‘two low-power’ versions of automobile ethernet is expected to significantly increase, which mainly helps in the reduction of CO₂ emissions. Also, several companies like Microchip Technology Inc., a leading provider of mixed-signal, Flash-IP solutions, and microcontroller, are developing novel technological innovations as a strategy to grow in the market. These strategies are estimated to increase investments and fuel the automotive ethernet market opportunity in the upcoming years.

Global Automotive Ethernet Market Share, by Component

Based on component, the market has been divided into hardware, software, and services. Among these, the hardware sub-segment held the largest market share in 2021 whereas the services sub-segment is anticipated to experience the fastest growth during the forecast period.

Global Automotive Ethernet Market Size, by Component, 2021

Source: Research Dive Analysis

The hardware sub-segment of automotive ethernet industry held the largest market share in the global automotive ethernet market during the forecast period. There are broad range of major benefits of automotive ethernet such as scalability which is increased transaction speed without sacrificing security. The exponential increase in the demand for infotainment and advanced driver-assistance system (ADAS) has encouraged the automotive original equipment manufacturers (OEMs) to use ethernet hardware components such as gateway, repeaters, and bridges routers. Also, key companies like NXP Semiconductors are coming up with product innovations, which are further creating a significant impact on the global automotive ethernet market share. Such product advancements are anticipated to drive the automotive ethernet market trend in the upcoming years.

The services sub-segment of the global automotive ethernet industry is expected to grow with the highest CAGR during the forecast period. The services sub-segment generally involves training & support and consulting. The highly expanding demand for consulting services at the original equipment manufacturers (OEMs) to manage the in-vehicle network complexity is one of the important aspects fueling the growth of the services sub-segment. Moreover, the growing instances of troubles experienced during the adoption of ethernet systems in cars may further boost the necessity for services sub-segment in the upcoming years.

Global Automotive Ethernet Market Value, by Application

Based on application, the market has been divided into chassis, infotainment, driver assistance, powertrain, body and comfort, and others. Among these, the driver assistance sub-segment is expected to have the largest market share and the fastest growth during the forecast period.

lobal Automotive Ethernet Market Forecast, by Application, 2021

Source: Research Dive Analysis

The driver assistance sub-segment of the global automotive ethernet market is projected to have the fastest growth during the forecast period. Driver assistance applications include systems developed to assist the driver in the driving process and increase safety for the driver, passengers, and pedestrians. Advanced driver assistance systems and V2X connectivity are the two major elements of autonomous vehicles. The more sophisticated the system is, the more will be complexity required to handle electrical and electronic systems. These advanced systems produce, process, and consume large volumes of data in real time. To process this huge volume of data in real-time with a very low level of latency, a reliable, high-speed network is required and Automotive Ethernet is the right choice for this purpose.

Global Automotive Ethernet Market Trends, by Vehicle Type

Based on vehicle type, the market has been divided into passenger cars and commercial vehicles. Among these, the commercial vehicles sub-segment is predicted to have the fastest growth and passenger cars sub-segment is anticipated to garner the maximum automotive ethernet market share in the global market.

Global Automotive Ethernet Market Growth, by Vehicle Type, 2021

Source: Research Dive Analysis

The commercial vehicle sub-segment of the global automotive ethernet market is predicted to have a most rapid growth during the forecast period. A commercial vehicle is any type of motor vehicle which is used for transporting goods or paying passengers. Increasing infrastructural investments and digitization is estimated to contribute to the growth of the commercial vehicle segment in the upcoming years. Many key players like Molex, a technology leader in data communications and commercial vehicles are strategizing collaborations to grow in the market. For instance, in January 2018, Molex and Aquantia, a leading player in high-speed transceivers, announced a strategic tie-up. As per this agreement, both companies will work on leveraging ‘Aquantia Multi-Gig Automotive Ethernet’ technologies in the Molex 10 Gbps automotive ethernet network in order to escalate data bandwidth in autonomous and connected vehicles. Such advanced strategies may bolster the sub-segment growth, in the projected period.

The passenger cars sub-segment is predicted to have a dominating market share in the global market during the analysis timeframe. The rise in economic conditions and technological advancements in passenger cars is propelling extensive growth in the passenger cars sub-segment of the automotive ethernet industry. Also, automotive ethernet provides numerous key features such as low cost, higher bandwidth, that are suitable for both multiple car series. These factors are major drivers to boost the growth of passenger cars sub-segment during the projected timeframe.

Global Automotive Ethernet Market Size, Regional Insights

The automotive ethernet market was investigated across North America, Europe, Asia-Pacific, and LAMEA.

Global Automotive Ethernet Market Size & Forecast, by region, 2021-2031 (USD Million)

Source: Research Dive Analysis

The Market for Automotive Ethernet in Asia-Pacific is the Most Dominant and Fastest Growing

The Asia-Pacific automotive ethernet market is expected to register the highest revenue during the forecast period. The Asia-Pacific automotive ethernet market is registering exponential growth due to growth in the automotive sector. The automotive sector has witnessed notable transformation owing to technological innovations and stable socio-political conditions. Asia-Pacific region is contributing the largest share in terms of manufacturing of vehicles as well as sales of vehicles globally. Furthermore, the mass consumer base and surging disposable income across the emerging countries in this region are fueling the automotive industry, and ultimately, the automotive ethernet industry.    

Competitive Scenario in the Global Automotive Ethernet Market

Product launches and mergers & acquisitions are common strategies followed by major market players. For instance, in March 2019, Broadcom launched BCM8956X, a family of automotive multilayer ethernet switches. This product will help the company address the growing need for bandwidth, security, and time-sensitive networking (TSN). The product is IEEE compliant for 100 BASE-T1 PHY. Broadcom would help automotive OEMs and leading suppliers to enter into the Gigabit Ethernet Systems.

Source: Research Dive Analysis

Some of the leading automotive ethernet market players are Vector Informatik GmbH, NXP Semiconductors, Marvell, Molex, Broadcom, Microchip Technology Inc., Aukua Systems Inc., Keysight Technologies, Cadence Design Systems, Inc, and Texas Instruments Incorporated.