Automotive Digital Key Market size is expected to reach USD 15.7 Billion by the end of 2036, growing at a CAGR of 14.5% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of automotive digital key was USD 13.1 Billion. The reason behind the growth is impelled by the growing demand for innovations that help users access their vehicle’s security data through the smartphone application. Over the past century, with the increase in the awareness of vehicle security, along with the rise in per capita disposable income, there has been a surge in the development of initiatives for electro and autonomous mobility. According to the report by Statista, smartphone ownership has increased from 35% to 77% in the US, which is expected to surpass 7 billion by 2023.
The growing advancements in the connectivity of vehicles such as cars to the internet, high convenience, and control for drivers, allowing them to remotely lock and unlock their cars, track their vehicles, and start and stop the engine as well. Such, an increase in recent developments in automotive technology will make these vehicles perfect for usage in the future perspective is expected to boost the growth of the market. For instance, in 2022, travel and tourism made up over USD 7 trillion USD in direct contributions to the global gross domestic product (GDP). This acts as a major growth factor for advanced features in the automobile industry.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
~14.5% |
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Base Year Market Size (2023) |
~ USD 13.1 Billion |
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Forecast Year Market Size (2036) |
~ USD 15.7 Billion |
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Regional Scope |
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Connectivity (Remote, Near-field, Bluetooth)
The remote segment in the automotive digital key market is estimated to gain a robust revenue share of 43% in the coming years owing to the remote access or control of the vehicle, which can be used to lock and unlock the vehicle’s doors, start the ignition, and the track the location of the vehicle. Near-field communication technology enables communication between two devices that are within a short range of each other. Bluetooth provides wireless connectivity between the vehicles and the user’s phone.
Key Type (Electric, Non-Electric)
The electric segment is set to garner a notable share shortly and is likely to remain the largest sub-segment in the application of the automotive digital key market. They use wireless communication technology such as Bluetooth Low Energy (BLE), cellular (4G or 5G), GPS, Wi-Fi, and others to communicate with the car. According to the Bluetooth Market Update 2020, it is expected that 13 million annual shipments of Bluetooth-enabled key fobs and accessories will be seen by 2024. On the other side, non—electric Keys refer to traditional keys that use a mechanical system to operate the vehicle. They do not use electronics or wireless technology to unlock and start the vehicle.
Application (Multi-Function, Single-Function)
The multi-function segment in automotive digital key market is estimated to hold a noteworthy share as this offers a broader range of features, including remote entry, engine start, vehicle diagnostics, and geofencing. While, single-function keys offer a limited number of functionalities, such as remote entry or engine start.
Vehicle Type (Passenger, Commercial)
The demand for passenger vehicles, such as cars and SUVs, is increasing, and therefore the demand for convenience features such as remote entry and engine start would also increase. The demand for digital key technology in commercial vehicles, such as trucks, buses, and delivery vehicles is increasing, as this can provide safety, and security in managing and operating these types of vehicles.
Our in-depth analysis of the global market includes the following segments:
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Connectivity |
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Key Type |
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Application |
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Vehicle Type |
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North American Market Forecast
The automotive digital key market in North America was valued at USD 386 million by 2023 and is predicted to account for the largest share of 43% during the forecasted period. The awareness of vehicle safety is a main growth driver for this market in the U.S., and this market is expected to increase as the popularity of digital keys amongst rental fleet owners so that they can receive or deliver the vehicle without any physical meet. As the occupant fatality rate for passenger cars increased from 1.22 in 2020 to 1.26 in 2021, this shows the requirement for vehicle safety in the region.
APAC Market Statistics
The Asia Pacific automotive digital key market is estimated to be the second largest, during the forecast timeframe, with a 35.7% share of revenue in 2021, led by the higher demand for passenger vehicles, along with the increase in the income of consumers. Asia-Pacific is also expected to further continue its growth in the forecasted period due to the adoption of new norms and policies by the government which encourages the consumption and production of the digital automotive industry.
Author Credits: Harshita Srivastava, Saima Khursheed
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