Frost & Sullivan Forecasts $238 Billion Market for AI-Enabled Automotive Features by 2030

Sonatus-sponsored report finds in-vehicle edge AI is reshaping how OEMs design, operate, and monetize across the automotive lifecycle

SUNNYVALE, Calif.--(BUSINESS WIRE)--In-vehicle artificial intelligence is on track to become one of the most transformative technologies in the automotive industry, with a total market opportunity expected to grow from $43 billion in 2025 to $238 billion in 2030, according to a new report by Frost & Sullivan, sponsored by Sonatus. The study finds that AI-driven innovations such as prognostics, in-vehicle AI companions, battery management systems, and sensor virtualization, are reshaping how automakers design, operate and monetize vehicles.

The findings indicate a fundamental shift: AI is transitioning from a cloud-centric, luxury-focused implementation to mass-market, in-vehicle edge execution. This is expected to deliver significant cost savings, enhanced safety, and new revenue opportunities for automakers, with a projected compound annual growth rate (CAGR) of 40% across Europe, North America, and Japan.

Automakers are accelerating investments in centralized compute platforms, over-the-air (OTA) updates, and adaptive as well as personalized intelligence. Adaptive intelligence enables vehicles to automatically adjust performance and settings in response to real-world conditions, driving behavior, and road environments, while personalized intelligence tailors the in-cabin experience to individual preferences. These advances are becoming essential as OEMs confront rising energy costs, stricter regulations, mounting security requirements, and escalating warranty and recall expenses.

Meanwhile, structural changes are speeding the transition: platforms are consolidating into centralized compute systems, vehicles generate gigabytes of monetizable data daily, and consumers now demand the same pace of innovation that they enjoy from smartphones, apps, and other connected services. Intelligence is rapidly becoming the core differentiator in how cars are designed, operated, and monetized.

The financial implications for the automotive industry are significant. Frost & Sullivan’s research analyzed a mix of edge AI use cases and their business impact, highlighting how intelligence-driven capabilities can deliver multi-billion dollar cost savings and new revenue streams. While these examples represent only part of the broader opportunity, they illustrate the scale of transformation already underway:

• Energy efficiency gains: $2.84 billion in 2025, to $20.93 billion by 2030 (42% CAGR)
• Warranty cost reductions: $0.65 billion in 2025, to $11.77 billion by 2030 (78.5% CAGR)
• Battery degradation reduction: $0.72 billion in 2025, to $6.10 billion in 2030 (53.3% CAGR)

“AI at the edge is reshaping the fundamentals of the automotive industry, moving from isolated use cases to a central role in how vehicles are designed, operated, and monetized,” said Ajit Chander Swaminathan, associate partner head of mobility Americas, Frost & Sullivan. “Our research shows that the convergence of centralized compute platforms, an abundance of vehicle data, and consumer demand for personalization is creating a $238-billion opportunity for the SDV market. Together, these forces are transforming intelligence from a feature into a foundation.”

Sonatus, a leader in intelligence-driven software-defined vehicle technology, delivers the AI toolchain and in-vehicle orchestration that makes edge AI scalable and practical for mass adoption. Sonatus enables OEMs to observe vehicle behavior, analyze data, and act on insights across every domain, embedding AI throughout the vehicle, from powertrain and battery systems to safety, comfort, and personalization. Already embedded in more than 6 million production vehicles, Sonatus is working with a wide array of ecosystem partners to deliver immediate impact.

“Intelligence is the new horsepower. It’s no longer enough for vehicles to collect data; they need to act on it in real time,” said Sanjay Khatri, head of product marketing, Sonatus. “With AI guiding how data is captured, interpreted, and used within the vehicle, Sonatus gives OEMs a faster, smarter path to operational efficiency, improved vehicle safety, and the personalized services customers are willing to pay for.”

To access the complete report, visit https://www.sonatus.com/resources/in-vehicle-edge-and-cloud-ai-at-scale/.

Sonatus will showcase its full suite of intelligence-driven software-defined vehicle technologies alongside partner implementations at the Consumer Electronics Show, Las Vegas Convention Center, West Hall Booth 5439, from Jan. 6-9. For more information on Sonatus’s presence at CES visit: https://www.sonatus.com/sonatus-at-ces-2026/

ABOUT FROST & SULLIVAN

Frost & Sullivan, the Growth Pipeline Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation, and leadership. The company’s Growth Pipeline as a Service provides the CEO’s Growth Team with transformational strategies and best-practice models to drive the generation, evaluation, and implementation of powerful growth opportunities. For over 60 years, Frost & Sullivan has partnered with investors, corporate leaders, and governments to identify, prioritize, and execute transformational growth strategies.

ABOUT SONATUS

Sonatus is a leading technology provider for intelligence-driven software-defined vehicles that are scalable and upgradable. Our AI solutions and software-defined technologies empower OEMs and suppliers to reduce costs, speed time to market, and deliver uncompromising quality. Founded in 2018, Sonatus is privately held, backed by leading investors spanning the automotive, semiconductor, and venture capital sectors, and its technology is in more than 6 million production vehicles from leading global automakers. Sonatus is headquartered in Sunnyvale, Calif. (Silicon Valley), with regional headquarters in Dublin, and offices in Bangalore, Detroit, Frankfurt, Kraków, Paris, Pune, Seoul, Shanghai, Taipei, and Tokyo. For more information, visit www.sonatus.com.

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