Passenger Car Digital Twin Market Size - By Component, Digital Twin, Deployment Mode, Vehicle, Propulsion, Application, End Use, Growth Forecast, 2026 – 2035

Passenger Car Digital Twin Market Size

The global passenger car digital twin market was valued at USD 1.7 billion in 2025. The market is expected to grow from USD 2.1 billion in 2026 to USD 19.9 billion in 2035 at a CAGR of 28.7%, according to latest report published by Global Market Insights Inc.

Implementation of digital twins, whether in engineering, manufacturing, or inspection & maintenance, has significantly given rise to positive ROI. A 2025 survey by Hexagon shows that 92% of companies that deploy digital twins report returns above 10%, while over half report at least a 20% return on investment.

Automotive manufacturing is one of the dominant industries that needs such revolutionary technologies to increase not just their position but also to cut their additional costs of rework, fewer prototypes, and parts or equipment failures that significantly result in their gained profits.

As per statistics of the last five years, over 80-90 million vehicles were produced, in which passenger cars were the most. According to OICA, the first three quarters of the year 2025 for passenger car production saw an increase of 5.5% compared to the same period of 2024. Such an increase in the passenger car production is the indication that digital twins will see potential growth opportunities.

Seeing such potential opportunities, leading players have already introduced solutions related to digital twins for automotive manufacturing. For instance, in December 2025, Siemens unveiled its PAVE360 Automotive technology, a new category of digital twin software that is pre-integrated and designed as an off-the-shelf offering to address the escalating complexity of automotive hardware and software integration.

Geographically, the Asia Pacific will be the role model for the market. Countries such as China, India, Japan, South Korea, and many in Southeast Asia are home to many automotive manufacturers who are actively investing much more on IT for an improved infrastructure. Investing in these markets by forming partnerships, mergers, and acquisitions will result in revenue growth and increased market position.

Passenger Car Digital Twin Market Trends

AI and ML will enhance the value of digital twins across the automotive industry. It will help to detect faults and overall vehicle performance before sending it to the market. It precisely checks, detects, and predicts the current and future component failures.
 

OEMs and Tier-1 suppliers are seeing the best results by implementing AI-enabled digital twins. OEMs like Toyota, Hyundai, and General Motors and Tier-1 suppliers like Continental and ZF have already implemented these technologies.
 

For instance, in March 2025, HORSE, the Renault-Geely powertrain powerhouse, had quickly propelled from its recent inception to be at the forefront of digital transformation in automotive production. Through the integration of AI and real-time data tracking, HORSE’s Valladolid is proof that digital twins have become an indispensable tool for overall operational efficiencies and foundational for the future of smart, flexible, and sustainable manufacturing.
 

According to Statista, worldwide spending on IoT is expected to reach USD 1 trillion by 2026. This statistic shows how companies across the industry are revolutionizing their process or infrastructure using the internet of things (IoT).
 

In 2025, expenditure on innovation in the German car industry amounted to around USD 63.5 billion. Companies like BMW are among the leading carmakers following this trend. In June 2025, the BMW Group announced that it is industrializing its Virtual Factory, with production planners continuously scaling applications in the digital twins of over 30 production sites to accelerate production planning worldwide.
 

The BMW Group will integrate more than 40 new or updated vehicles into its global production between now and 2027. This will first be done virtually to ensure immediate stability at the plants. Going forward, the BMW Group’s Virtual Factory is projected to reduce production planning costs by up to 30 percent.
 

Passenger Car Digital Twin Market Analysis

Based on digital twin, the market is divided into system digital twin, product digital twin and process digital twin. The system digital twin segment dominated the market with revenue share of around 55.2% and generating around USD 940.5 million in 2025.
 

• The dominance of the system digital twin segment is primarily due to the increasing demand for integrated vehicle systems simulation and optimization. This type of digital twin helps manufacturers to model complex interactions among various vehicle subsystems, such as powertrain, infotainment, and safety systems. It significantly helps in real-time monitoring and predictive maintenance.
   
• In the projected period between 2026 and 2035, the process digital twin segment is set to grow at the fastest CAGR of 30.2%. Increasing adoption of process optimization and smart manufacturing practices in automotive production will be the central point for the segment.
   
• In January 2026, Siemens launched Digital Twin Composer, a new software that helps create Industrial Metaverse environments. This tool provides real-time insights, allowing companies to test and improve products, processes, or factories, such as autonomous electric vehicles, before building them.
   
• Such solutions make it easier to use process digital twins by giving helpful insights into manufacturing operations, improving efficiency and productivity in passenger car production.
   

Based on propulsion, the passenger car digital twin market is divided into internal combustion engine (ICE) and EV & hybrid. The EV & hybrid segment accounts for 64.6% share in 2025 and is expected to reach USD 13.9 billion by 2035.
 

• According to the IEA, global sales of electric cars are expected to surpass 20 million in 2025 as per the released quarter results, accounting for over a quarter of cars sold worldwide. Such insights indicate how EVs are on the way to acquiring the majority of the passenger car industry.
   
• An EV & hybrid car contains components and sensors that are easily connected with digital twin platforms that make it easy for manufacturers to understand the monitoring or inspection before sending it to the market.
   
• In 2025, the EV and hybrid segment is expected to make up the largest share of the passenger car digital twin market. This growth is mainly because electrified powertrains depend on software and data, making them a perfect match for digital twin technology.
   
• EVs and hybrids use systems like battery packs, inverters, motors, thermal management, and embedded software. Digital twins allow automakers to simulate battery degradation, thermal behavior, and energy efficiency, which are more critical for EVs than traditional internal combustion engine (ICE) vehicles. This makes digital twins a key driver of growth and leadership for this segment in the market.
   
• Recent product launches are mostly dedicated to EVs and hybrids. For example, in March 2025, HORSE announced it would accelerate digital twin integration at its Valladolid facility to improve powertrain production, enhance sustainability, and redefine EV manufacturing strategies. Such efforts strengthen the EV and hybrid segment’s position and drive its revenue growth toward USD 13.9 billion by 2035.
   

Based on vehicle, the passenger car digital twin market is divided into hatchback, SUV and sedan. The SUV segment is expected to grow at the fastest CAGR of 30.1% between 2026 and 2035.
 

• The SUV segment holds the largest portion of the market. The reason behind its dominance is attributed to the sales of the SUV segment. Many carmakers have reported the growth in the SUV segment sales. For example, in January 2025, Mahindra & Mahindra reported in December SUV sales of 50,946 units, a growth of 23%. The SUV segment comprised over 59% of their total vehicle sales, which accumulated to 86,090 units.
   
• For many years, the company has been applying digital manufacturing practices using Siemens digital solutions. Recently, Mahindra & Mahindra has also partnered with Dassault for use of the 3DEXPERIENCE Platform on the Cloud.
   
• The SUV segment is expected to grow at a strong CAGR of 30.1% between 2026 and 2035. This growth is mainly due to the rapid move toward electric vehicles and the increasing use of software in SUVs. Automakers are focusing on electric and hybrid SUVs as key strategies.
   
• Digital twins play a crucial role in battery thermal modeling, range optimization, and vehicle weight management, which are more challenging in larger vehicles. SUVs are being used to introduce next-generation EV designs, so digital twins are included early in the design, testing, and validation stages. This is helping their adoption grow faster than in hatchbacks and sedans.
   

The US passenger car digital twin market reached USD 348.2 million in 2025, growing from USD 306.5 million in 2024.
 

• The U.S. is one of the most promising EV markets for automakers. According to the IEA, in the U.S., electric car sales grew by about 10% year-on-year, reaching more than 1 in 10 cars sold. Tesla and GM lead record U.S. EV sales this year as federal incentives end. In the first half of 2025, over half a million BEVs were sold in the US in total.
   
• Manufacturers in the U.S. are quickly using digital twins in smart factory projects. These projects aim to improve production lines, reduce downtime, and solve supply chain problems. Digital twin command hubs copy production processes in real time. This helps manufacturers find issues faster and improve operations. The move to digital manufacturing, supported by cloud solutions and IoT systems, is increasing the use of digital twins in making passenger cars and analyzing data after production.
   
• In March 2025, the U.S. carmaker General Motors and NVIDIA collaborated on AI for Next-Generation Vehicle Experience and Manufacturing. GM will use the NVIDIA Omniverse platform to create digital twins of assembly lines, allowing for virtual testing and production simulations to reduce downtime.
   

North America passenger car digital twin market is projected to grow at a CAGR of 27.2% between 2026 and 2035 and is estimated to reach USD 4.2 billion by 2035.
 

• In North America, major OEMs are using digital twin technology to improve their manufacturing processes. In March 2025, Hyundai Motor Group announced that it will open a new Metaplant America facility in Georgia. This facility will feature a software-defined factory that simulates production in real time.
   
• The hub will help improve quality control, detect defects, and optimize workflows on the EV assembly line. This approach highlights how digital twins are becoming a key part of modern factory operations as the industry moves toward smarter, data-driven manufacturing.
   
• Additionally, the U.S. automakers are working with tech companies to expand the use of digital twins beyond manufacturing into design and validation. For example, in 2025, General Motors partnered with NVIDIA to use NVIDIA’s Omniverse platform. This platform helps simulate virtual assembly lines to improve manufacturing efficiency. It also supports the development of next-generation vehicle designs and autonomous systems.
   

The Europe region holds 30.9% of the passenger car digital twin market, accounting for USD 527.6 million in 2025.
 

• OEMs in Germany, France, and the UK are using digital twins to simulate vehicle design, testing, and performance. They are also using this technology to meet EU decarbonization goals and regulatory standards. Digital twins are now key tools for engineering, regulatory compliance, and optimizing the lifecycle of vehicles.
   
• European carmakers like BMW, Volkswagen, and Daimler are leading the way in adopting Industry 4.0, especially in countries such as Germany, Italy, and France. They are investing in digital twin technologies, including hardware and software, to improve factory operations. This approach helps speed up development, reduce mistakes, and use resources more effectively, showing Europe’s move toward more digitalized car manufacturing.
   
• The European Union has set a goal for 2035 to ensure that about 90% of new vehicle sales are electric. This target is driving the increased use of digital twin technology in the EV passenger car market. Automakers are being required to redesign vehicles, production systems, and supply chains to focus on electrification. As the 2035 deadline gets closer, digital twins are becoming critical for automakers to increase EV production safely, reliably, and in line with regulations.
   

Germany's passenger car digital twin market is growing quickly in Europe, with a CAGR of 31.8% between 2026 and 2035.

• Germany is driving the adoption of digital twin technology in passenger cars through strong investments in automotive innovation. According to Statista, the car industry in Germany is expected to spend EUR 56.3 billion on innovation by 2025. This shows how much OEMs are focusing on advanced tools. These tools help German automakers simulate vehicle development and improve testing of complex systems such as electrified powertrains, ADAS, and vehicle software.
   
• Germany’s leadership in Industry 4.0 is also helping to integrate digital twins into car manufacturing. Automakers and Tier-1 suppliers are using digital replicas of production lines to monitor equipment, improve assembly processes, and make production more flexible.
   
• German automakers work closely with local technology companies like Siemens and Bosch. These companies provide software, automation, and simulation platforms that support digital twin applications. As cars become more software-based and electrified, this collaboration ensures that digital twin technology remains a key part of Germany’s automotive innovation strategy.
   

The Asia Pacific passenger car digital twin market is estimated to grow at a CAGR of 29% during the analysis timeframe.
 

• In the region, countries like China, Japan, South Korea, and India are leading the adoption of digital twin technologies. These technologies are helping to improve smart manufacturing and support the move toward electric and connected vehicles. This shows the region's focus on advanced manufacturing and strong research and development capabilities.
   
• Governments in the region are promoting Industry 4.0 and digitalization strategies to make it easier for industries, especially automotive, to use digital twin technologies. Policies that support IoT integration, AI use, and smart factory platforms are helping OEMs and suppliers adopt digital twins in their production and lifecycle processes.
   
• For instance, in April 2025, China’s Unity has added digital twin and smart cockpit solutions to its automotive offerings. At the same time, Asian automakers are combining digital twins with AI features and software-defined vehicle functions. These partnerships show how digital twin technology is being used in connected mobility, better user experiences, and advanced driver assistance systems.
   

China is estimated to grow with a CAGR of 29.6% in the projected period between 2026 and 2035, in the Asia Pacific passenger car digital twin market.
 

• China is a global leader in the automotive industry, especially in electric vehicles (EVs), connected vehicles, and smart manufacturing. This has created a strong interest in digital twin technology. Companies like BYD, SAIC, and NIO are investing in simulation hardware, edge computing, IoT sensors, and virtual prototyping systems.
   
• National strategies like "Made in China 2025" and the Industrial Internet Development Action Plan are encouraging digitalization and smart factory transformation. These policies support the use of digital twins in the passenger car market. They also promote teamwork between OEMs, suppliers, and technology providers in areas like simulation, AI, cloud computing, and real-time data systems.
   
• Both Chinese and international technology companies are becoming more involved in China, bringing digital twin platforms and expertise. For example, IPG Automotive celebrated 10 years in China at Open House China 2025 in Shanghai. The event focused on digital twin and virtual development technologies that support local R&D and innovation.
   

Latin America passenger car digital twin market is estimated to reach USD 92 million in 2025 and is anticipated to show lucrative growth over the forecast period.
 

• Automotive companies in this region are using digital twins to design vehicles, improve production, predict maintenance needs, and ensure quality. This trend supports their efforts to modernize and adopt digital strategies.
   
• Brazil is playing a key role in advancing digital twin technology for automotive use in the region. Brazilian OEMs and Tier-1 suppliers are working with global technology companies to introduce digital twin platforms. These platforms use edge computing, GPUs, and IoT sensors to allow real-time testing, predictive maintenance, and advanced simulations for vehicle design and manufacturing.
   
• Governments and industries across Latin America are supporting Industry 4.0 initiatives and improving digital infrastructure. These efforts are helping expand the use of digital twins in passenger car development and manufacturing.
   

Brazil is estimated to grow with a CAGR of 24.9% between 2026 and 2035, in the Latin America passenger car digital twin market.
 

• Federal and state programs in Brazil are supporting Industry 4.0 practices among automotive manufacturers, which is increasing the use of digital twin technologies in production processes. These technologies are being used to improve design and engineering, make factory operations more efficient, and enhance quality control throughout the vehicle lifecycle.
   
• As automotive production grows in Brazil, digital twins are helping OEMs reduce prototyping costs, speed up testing, and meet international quality standards. This is important for both local production and exports.
   
• Brazilian companies are exploring digital twins for predictive maintenance and real-time operational improvements, supported by the increasing availability of IoT and data analytics tools. This broader digital twin ecosystem allows automotive companies to share knowledge on simulation, real-time data integration, and virtual modeling. This creates a strong foundation for advanced applications in passenger car development and lifecycle management.
   

The Middle East and Africa passenger car digital twin market accounted for USD 66.7 million in 2025 and is anticipated to show lucrative growth over the forecast period.
 

• Governments in the Middle East, such as Saudi Arabia and the UAE, along with industry leaders in Africa, especially South Africa, are supporting Industry 4.0 and smart manufacturing. These efforts are driving the use of digital twins in vehicle engineering and production.
   
• In October 2025, South Africa received investments from Chinese and Indian car companies to upgrade their semi-knocked-down (SKD) vehicle assembly operations to full-scale manufacturing.
   
• Although, the use of digital twins is not the same across the region, better connectivity and improved digital infrastructure are helping more advanced applications. In the UAE and Saudi Arabia, governments are focusing on digital transformation programs that include smart mobility and data-driven vehicle development. In parts of Africa, better access to cloud technology, sensor networks, and industrial digitization is slowly creating opportunities for digital twin technology in automotive design and manufacturing.
   

UAE to experience substantial growth in the Middle East and Africa passenger car digital twin market in 2025.

• The UAE has invested in advanced digital infrastructure, including commercial 5.5G networks and AI-powered IoT systems. This provides a strong foundation for automotive digital twin applications that rely on real-time connectivity and fast data analysis.
   
• In October 2025, Stellantis announced plans to set up an EV manufacturing and export hub in Abu Dhabi in partnership with the Abu Dhabi Investment Office (ADIO) and Abu Dhabi Ports Group.
   
• This effort encourages the use of digital twin solutions for vehicle design, simulation, and manufacturing optimization. By using Abu Dhabi's strong infrastructure and strategic location as a regional export center, the project speeds up EV development, improves production efficiency, and attracts investments in advanced digital technologies.
   

Passenger Car Digital Twin Market Share

The top 7 companies in the passenger car digital twin industry are ANSYS, Dassault, GE Vernova, IBM, Microsoft, Robert Bosch and Siemens contributing 38.4% of the market in 2025.
 

ANSYS provides digital twin solutions for passenger cars. These solutions use physics-based models of structures, electronics, and fluids to help with virtual testing, performance analysis, and predicting how the car will perform over time.
 

Dassault offers digital twin tools for passenger cars. These tools combine design, simulation, and lifecycle management to allow virtual vehicle modeling, system testing, and teamwork between engineering and manufacturing teams.
 

GE Vernova focuses on digital twin applications using analytics and industrial software. It helps model, monitor, and improve performance in areas like automotive energy, powertrain, and manufacturing systems.
 

IBM provides digital twin solutions for passenger cars by using data integration, AI, and analytics. These solutions give real-time insights, predictive analysis, and system modeling for connected vehicles and businesses.
 

Microsoft supports digital twin solutions for passenger cars through Azure's cloud services and AI tools. It helps with scalable modeling, real-time data integration, and managing lifecycle data in connected vehicle systems.
 

Robert Bosch offers digital twin solutions for vehicle systems, sensors, and embedded software. These solutions simulate and monitor how components behave in real-world conditions and use operational data.
 

Siemens provides digital twin solutions for passenger cars, covering design, engineering, manufacturing, and lifecycle management. These solutions help with virtual vehicle development, process simulation, and data integration.
 

Passenger Car Digital Twin Market Companies

Major players operating in the passenger car digital twin industry are:

• ANSYS
• Dassault
• GE Vernova
• IBM
• Microsoft
• NVIDIA
• PTC
• Robert Bosch
• SAP
• Siemens
   
• ANSYS has strengths in physics-based simulation, enabling detailed modeling of vehicle structures, electronics, and thermal behavior, supporting virtual testing, performance analysis, and validation across multiple passenger car development phases.
   
• Dassault benefits from integrated design, simulation, and lifecycle management tools, allowing consistent vehicle modeling, data continuity, and collaboration across engineering, manufacturing, and validation teams throughout development processes.
   
• GE Vernova brings capabilities in industrial analytics and system-level digital twin platforms, supporting modeling and optimization of complex systems relevant to automotive manufacturing, energy usage, and power-related applications.
   
• IBM’s competitive edge lies in data management, AI, and enterprise system integration, enabling passenger car digital twins to combine vehicle data with analytics, predictive insights, and large-scale IT environments.
   
• Microsoft offers scalable cloud infrastructure, data platforms, and AI services, supporting deployment, integration, and operation of passenger car digital twins rather than providing core vehicle engineering or simulation capabilities.
   
• Robert Bosch leverages deep automotive component expertise, sensor technologies, and embedded software knowledge, enabling digital twins that closely reflect real-world vehicle systems and operational behavior.
   
• Siemens provides integrated digital twin capabilities across product design, manufacturing, and lifecycle management, supported by strong automotive domain experience and comprehensive engineering and industrial software portfolios.
   

Passenger Car Digital Twin Industry News

• In December 2025, Siemens launched its PAVE360 Automotive technology, a new digital twin software that is ready-to-use and designed to handle the growing challenges of combining automotive hardware and software.
   
• In June 2025, BMW announced that it is expanding its Virtual Factory. Production planners are using digital twins at over 30 production sites to speed up production planning worldwide. This process will start virtually to ensure the plants run smoothly from the beginning.
   
• In March 2025, HORSE, the Renault-Geely powertrain joint venture, quickly became a leader in digital transformation for automotive production. By using AI and real-time data tracking, HORSE’s Valladolid site shows how digital twins are critical for improving operations and building smart, flexible, and sustainable manufacturing systems.
   
• In February 2025, Dassault and Volkswagen announced a long-term partnership. They plan to improve Volkswagen’s digital systems for advanced vehicle development by using Dassault 3DEXPERIENCE platform.
   

The passenger car digital twin market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2022 to 2035, for the following segments:

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Market, By Component

• Hardware
• IoT sensors & devices
• Edge computing hardware
• Data acquisition systems
• Connectivity infrastructure
• Software
• Services
• Professional
• System integration
• Training & consulting
• Support & maintenance
• Managed Servies

Market, By Digital Twin

• System digital twin
• Product digital twin
• Process digital twin

Market, By Deployment Mode

• Cloud-based
• On-premises
• Hybrid

Market, By Vehicle

• Hatchback
• Sedan
• SUV

Market, By Propulsion

• Internal Combustion Engine (ICE)
• EV & Hybrid
• Battery electric vehicle (BEV)
• Plug-in hybrid electric vehicle (PHEV)
• Hybrid electric vehicle (HEV)
• Fuel cell electric vehicle (FCEV)

Market, By Application

• Product design & development
• Predictive maintenance & performance monitoring
• Manufacturing & process optimization
• In-service operations & fleet management

Market, By End Use

• Original equipment manufacturers
• Tier 1 & Tier 2 Suppliers
• Automotive software & technology companies
• Mobility service providers
• Insurance companies
• Aftermarket & service centers

The above information is provided for the following regions and countries:

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Czech Republic
  • Belgium
  • Netherlands
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
  • Singapore
  • Malaysia
  • Indonesia
  • Vietnam
  • Thailand
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Colombia
• MEA
  • South Africa
  • Saudi Arabia
  • UAE