Automotive Software Testing Market

The automotive software testing market is projected to grow from USD 9.10 billion in 2025 to USD 12.75 billion by 2032 at a CAGR of 1.3%. The passenger car segment is estimated to witness the highest software testing demand, as modern cars rely heavily on technology. EVs require software to manage batteries and charging, while connected vehicles have smart infotainment systems, navigation, and smartphone integration. OEMs and tier-1 suppliers are integrating multiple components into a single unit for effective space utilization and cost benefits. This would amplify the need for rigorous software testing to ensure optimal performance, safety, and energy efficiency. Advanced driver assistance systems (ADAS), like cruise control, automatic braking, and lane keep assist, also require complex software and testing for efficient operations. Additionally, as vehicles are getting more advanced and are equipped with connected features, the need for automotive software testing keeps growing globally.

The EV segment is expected to grow at the fastest rate globally during the forecast period.

EVs depend on advanced software to manage battery systems, drive control, regenerative braking, and power distribution. As battery technology evolves, lithium-ion batteries will advance to solid-state and sodium-ion batteries, and software validation will ensure safety, efficiency, and seamless integration with high-voltage systems in passenger and commercial vehicles. Similarly, electric motors require rigorous testing, particularly for thermal management, to enhance performance and longevity.

Fleet managers rely on precise real-time data to monitor and optimize commercial vehicles, making software integrity an essential factor. Over-the-air updates demand strict testing to prevent risks to drivers, vehicle performance, and safety. Thus, with the growing complexity of EV systems, the demand for software testing is rising, driving innovation and ensuring the seamless operation of EVs.

The passenger car segment is expected to be the largest during the forecast period.

The automotive software testing market is classified based on vehicle type, including passenger and commercial vehicles. In recent years, there have been significant advancements in autonomous driving technology and connected features, and passenger cars are becoming more intelligent and capable of offering enhanced safety and convenience features. Modern vehicles rely more on software for features like automatic braking, lane-keeping, and even self-parking, all of which must be tested thoroughly. In March 2025, Volvo's passenger vehicle division announced that it would incorporate artificial intelligence (AI) and virtual environments into its safety software development. Moreover, in February 2025, Hexagon's (Sweden) manufacturing intelligence division launched a cloud-native solution designed to streamline the testing, training, and validation of Advanced Driver-Assistance Systems (ADAS) and autonomous vehicle systems.

Asia Pacific is expected to be the largest market for automotive software testing during the forecast period.

Asia Pacific is expected to witness significant market growth because countries like China, Japan, South Korea, and India have strong vehicle manufacturing bases, most of which use advanced software testing. Particularly in China, the rapid growth of EVs has demanded software for battery management and charging systems, which has driven the need for advanced software testing. Further, Japanese OEMs like Toyota and Honda are advancing hybrid and all-electric platforms, backed by USD 2.4 billion in government subsidies for battery production. South Korea's Hyundai and Kia are heavily investing in EV platforms like E-GMP, with Hyundai planning to spend USD 16 billion on electrification by 2030. Domestic automakers heavily invest in ADAS, autonomous driving, V2X communication, and AI-driven vehicle software. Nissan showcased its latest autonomous driving technology by testing its driverless vehicle in Yokohama, Japan. Additionally, in October 2024, in collaboration with Nippon Telegraph and Telephone, Toyota announced an investment of USD 3.27 billion (500 billion yen) by 2030 to develop an AI infrastructure platform to reduce traffic accidents. This platform will enhance driver-assist technologies and is expected to be deployed by 2028. Companies like Hyundai and BYD are investing heavily in developing next-gen vehicle software. In January 2024, BYD planned to invest USD 701.8 million into developing all-terrain professional test drive sites across China. This investment supports the company's research and development, particularly in-vehicle software and autonomous driving technologies. Software testing is key to making ADAS and autonomous systems safe and reliable by simulating real-world scenarios before deployment. Hyundai and BYD use advanced simulations and real-world tests to fine-tune their software. This push also boosts local testing firms in high demand for their expertise. As OEMs continue to expand their software-driven strategies, collaborations with specialized testing firms will play an essential role in accelerating the deployment of intelligent vehicle technologies.

The major players in the automotive software testing market are DEKRA SE (Germany), Dewesoft (Slovenia), Luxoft (Switzerland), Applus Services SA (Spain), and TUV Nord (Germany). These companies have expanded and undergone new product launches, partnerships, mergers, and acquisitions to gain traction in the market.

Research Coverage:

The report covers the automotive software testing market in terms of Application (powertrain, cabin & comfort, body control, ADAS & safety, infotainment, braking system, steering system, autonomous driving, HMI, and connected services), Vehicle Type (Passenger Cars and Commercial Vehicles), Electric Vehicle Type (BEVs, PHEVs, and HEVs) and Region. It also covers the competitive landscape and company profiles of the significant players in the automotive software testing market ecosystem.

The study also includes an in-depth competitive analysis of the key market players with their company profiles, key observations related to product and business offerings, recent developments, and key market strategies.

Key Benefits of Buying the Report:

• The report will help market leaders/new entrants with information on the closest approximations of revenue numbers for the overall automotive software testing market and its subsegments.
• This report will help stakeholders understand the competitive landscape and gain more insights, enabling them to position their businesses better and plan suitable go-to-market strategies.
• The report also helps stakeholders understand the market pulse and provides information on key market drivers, restraints, challenges, and opportunities.
• The report also helps stakeholders understand the automotive software testing market's current and future pricing trends.