Automotive Extended Reality Market Size & Share, by Component (Virtual Reality, Augmented Reality, Mixed Reality); Application (Automobile Sales, Virtual Testing) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2024-2036

  • Report ID: 3421
  • Published Date: Oct 06, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2024-2036

Automotive Extended Reality Market size is estimated to surpass USD 900 billion by the end of 2036, growing at a CAGR of 5% during the forecast period i.e., 2024-2036. In the year 2023, the industry size of automotive extended reality was around USD 41 billion. The growth of the market can be attributed to the rapid development of virtual reality (VR) technology, in the form of extended reality (XR). XR Cars uses a combination of virtual reality and augmented reality to provide virtual sales opportunities for auto manufacturers and sellers. Customers can view and experience all the features of any car model from the comfort of home, where virtual reality is available. More than 70% of young people consider the emerging technologies and interactive features to be extremely useful and engaging when buying a vehicle, as well as their preference for purchasing vehicles from an XR car dealer.

In addition, the increase in sales of automobiles with the adopted of new technologies such as automotive dealer management system is one of the largest growth drivers for the market is expected to be supported by an increasing use of XR in the automotive sector. The technology is not yet widely implemented on the ground, but it is expected to grow significantly over the period from 2025 onwards and have a significant share by 2030. 

Automotive Extended Reality Market Overview
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Automotive Extended Reality Sector: Growth Drivers and Challenges

Growth Drivers

  • Increasing Awareness about the Technology – The growth of this market can be ascribed to the increasing awareness about automotive extended reality technology. The technology becomes more familiar to consumers, and they're increasingly willing to engage it as an instrument of vehicle experience prior to purchase.
  • Consumer Preference for In-car Experience - With the evolution of technology and growing consumer demand for advanced in-car experiences, automakers are investing in XR technology to create innovative and attractive. XR technologies, such as virtual reality and augmented reality, have advanced rapidly in recent years, making them more accessible and more cost-effective for the auto industry. Additionally, XR technology can help improve vehicle safety and comfort, for example by using head-up displays and driver assistance systems.


  • Lack of Standardization – There is no single standard for XR hardware and software  which can make it difficult for developers to create cross-perform applications. This is predicted to hamper the market growth in the upcoming period.
  • Safety Concerns Associated with Automotive Extended Reality are Predicted to Restrict the Market Growth in the Future Times.
  • High Cost of Hardware is another Significant Factor Posing Limitation on the Market Expansion in Upcoming times.

Automotive Extended Reality Market: Key Insights

Base Year


Forecast Year

2024 – 2036



Base Year Market Size

~USD 41 billion

Forecast Year Market Size

~USD 900 billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Automotive Extended Reality Segmentation

Component (Virtual Reality, Augmented Reality, Mixed Reality)

the AR segment is estimated to hold around 40% share of the global automotive extended reality market by the end of 2036. For a variety of reasons, AR's dominant position on the XR automotive market is due to its ability to work in a broad range of applications within the vehicle industry from visual aids to hands free maintenance instructions. Moreover, compared with traditional 2D interfaces, the experience of Augmented Reality is more interactive and engaging for users. It's also an ideal tool to be used in car applications because it can interact at the same time with virtual objects. The use of AR in automotive sector widely can be seen in self-driving cars and autonomous cars. By 2040 there will be 75% autonomous cars running on road that will include AR technology. 

Application (Automobile Sales, Virtual Testing)

Automotive extended reality market from the virtual testing segment is estimated to hold the highest revenue during the forecast period. Car manufacturers can replicate the real world drive conditions and vehicle tests in a safe, regulated environment by means of virtual testing. Virtual testing also eliminates the need for physical prototypes, which saves both time and money when performing a test.

Our in-depth analysis of the global market includes the following segments:


  • Virtual Reality
  • Augmented Reality
  • Mixed Reality


  • Automobile Sales
  • Virtual Testing

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Automotive Extended Reality Industry - Regional Scope

North America Market Forecasts

The automotive extended reality market in the North America is estimated to hold 35% of the revenue share by the end of 2036. A number of factors, including the fact that North America has been known to adopt emerging technologies like augmented reality before, can be considered as driving growth in this market. Therefore, manufacturers and suppliers in the region have started to invest in augmented reality solutions for improving their operations as well as enhancing customers' experience. In addition, there is a strong car manufacturing sector in the region with many manufacturers, service providers and distributors active on the market. The United States is one of the countries with the world's leading automobile industry, contributing at least 3% to the country's gross domestic product (GDP). The country produced nearly 8.82 million vehicles in 2020. This further is driving the growth of extended reality in automotive industry of North America region in the projected period.

Asia Pacific Market Statistics

The automotive extended reality market in the Asia Pacific region is estimated to grow significantly during the forecast period. The urbanization rate in the Asia Pacific region is expanding rapidly that is resulting in growing demand for personal vehicles. This is increasing the demand for automotive XR technology in the region during the projected period.  

Research Nester
Automotive Extended Reality Market Region
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Companies Dominating the Automotive Extended Reality Landscape

    • Apple, Inc.
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Microsoft Corporation
    • Google LLC
    • Meta Platforms Inc.
    • Intel Corporation
    • Accenture
    • Qualcomm Technologies, Inc.
    •  Koninklijke Philips N.V.
    • SphereGen Technologies
    • AugRay LLC.


In The News

  • BMW Group introduces research update with Meta Reality Lab Research, demonstrating for the first time the ability to accurately display stable virtual  and mixed reality content to passengers in a vehicle the car is moving quickly, even when turning and going over speed bumps. , and acceleration. By integrating Meta Quest's tracking system with BMW's sensor data, the researchers created a series of stable "lock-in" gaming, entertainment, productivity, and meditation experiences.
  • Valeo's immersive technology is shown at Laval Virtual. The emerging of virtual and mixed reality has opened up opportunities for the automotive industry. Valeo will be taking part for the first time in Virtual Laval between April 12 and 14. The Group will present its innovations in order to accelerate the development and deployment of solutions for automotive applications.  

Author Credits:  Harshita Srivastava, Saima Khursheed

  • Report ID: 3421
  • Published Date: Oct 06, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

The growing adoption of extended reality in automotive sector and increasing awareness about its benefits are some of the major factors anticipated to drive the growth of the automotive extended reality market.

The market is anticipated to attain a CAGR of ~5% over the forecast period, i.e., 2024 - 2036.

The major players in the market are of Microsoft Corporation, Google LLC, Meta Platforms Inc., Intel Corporation, Accenture, Qualcomm Technologies, Inc., Koninklijke Philips N.V., and others.

The virtual testing segment is anticipated to garner the largest market size by the end of 2036 and display significant growth opportunities.

The market in North America is projected to hold the largest market share by the end of 2036 and provide more business opportunities in the future.
Automotive Extended Reality Market Report Scope

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