Automobile Industry Set to Invest Over US$188 Billion in Digitalization by 2033 to Ensure a Seamless EV Transition and Production Scaling
Traditional automobile manufacturers face the considerable challenge of transferring their product lineups to Electric Vehicles (EVs), while balancing the need to maintain sales and profits to afford the switchover from sales of their vehicles with Internal Combustion Engines (ICEs). A new report from global technology intelligence firm ABI Research forecasts that automobile manufacturers will spend US$83.3 billion on digital technologies in 2023, growing by a CAGR of 8.5% to surpass US$188 billion in 2033.
“The transfer to EVs is driving demand for software, as manufacturers need to design new vehicles and simulate the vehicles’ performance. The new production lines will also need to be simulated before launch. Manufacturers are realizing the potential of digital twins to enable teams to collaborate to bring the new operations to life,” says Michael Larner, Industrial and Manufacturing Markets Research Director at ABI Research. Before creating digital twins, automobile manufacturers will need to remove data silos and create digital threads with suppliers such as Amazon Web Services (AWS), Google, NVIDIA, and Siemens standing to benefit.
Regarding regions, “Latin America is forecast to be the fastest growing region (a CAGR of 9%) as OEMs scale digital investments across their facilities and invest in locations such as Mexico and Brazil. Meanwhile, in North America, Europe, the Middle East, and Africa (EMEA), investments will be driven by the transfer to EVs and competition among the OEMs’ different plants for producing the new vehicle lineup,” Larner concludes.
These findings are from ABI Research’s Digital Transformation of Automobile Manufacturing application analysis report. This report is part of the company’s Industrial and Manufacturing Markets research service, which includes research, data, and ABI Insights. Based on extensive primary interviews, Application Analysis reports present an in-depth analysis of key market trends and factors for a specific technology.
