Vetronics Market Report 2025

The vetronics market size has grown steadily in recent years. It will grow from $3.84 billion in 2024 to $4.01 billion in 2025 at a compound annual growth rate (CAGR) of 4.3%. The growth in the historic period can be attributed to modernization of military vehicles, increasing threats and security challenges, demand for enhanced situational awareness, shift towards network-centric warfare, demand for lightweight and compact electronics, upgradation programs for legacy vehicles.

The vetronics market size is expected to see strong growth in the next few years. It will grow to $4.96 billion in 2029 at a compound annual growth rate (CAGR) of 5.5%. The growth in the forecast period can be attributed to multifunctional displays and HMI, unification of communication protocols, focus on soldier safety and survivability, development of autonomous vehicles, operational efficiency and effectiveness, rising defense budgets. Major trends in the forecast period include integration of advanced electronics, network-centric warfare, digitalization and sensor fusion, artificial intelligence (ai) and machine learning (ml), enhanced vehicle communication, modularity and scalability.

The growing emphasis on military and defense services is driving the vetronics market. Increased terrorist activities, political instability worldwide, and geopolitical tensions in various countries have heightened the focus on defense and military operations, leading to the acquisition of next-generation combat vehicles. For instance, in March 2023, a report from a defense correspondent indicated that Rheinmetall's Military Vehicle Centre of Excellence (MILVEHCOE) in Queensland will produce 186 Boxer vehicles for Australia. Consequently, the rising emphasis on military and defense services is anticipated to accelerate the growth of the vetronics market in the coming years.

The growing defense budget is anticipated to drive the growth of the vetronics market moving forward. Increased defense budgets provide the necessary financial resources for the modernization of military vehicles and equipment with advanced vetronics systems. These systems improve communication, situational awareness, and coordination among military units, enhancing overall defense capabilities and responsiveness. Additionally, larger budgets facilitate research and development, promoting innovation in vetronics technology and solutions. For example, in April 2023, The Peter G. Peterson Foundation, a U.S.-based non-profit organization, reported that U.S. defense spending increased by $71 billion from 2021 to 2022. Thus, the rising defense budget is fueling the growth of the vetronics market.

A key trend influencing the vetronics market is technological advancement. Major industry players are directing their efforts toward developing innovative technologies, including the emergence of wireless communications technology and the increasing modernization of military vehicles. This trend is particularly evident in the utilization of drones and unmanned vehicles for surveillance and various commercial applications. These technologies contribute to improvements in traffic flow analysis methodologies, risk assessment, accident investigation aid, and damage assessments for infrastructure elements like bridges and pavements. Additionally, advances in computer vision algorithms play a crucial role in extracting critical information. In essence, technological advancement is playing a pivotal role in boosting the growth of the vetronics market.

In the competitive landscape of the vetronics market, major companies are actively developing new high-performance computing solutions tailored for military environments, aiming to secure a competitive edge. These advanced solutions integrate cutting-edge computing technologies to enhance the processing speed and efficiency of vehicle electronics, optimizing communication, control, and sensor functionalities in military applications. Illustrating this trend, in May 2022, Kontron AG, a Germany-based electronics company, introduced the DARC VX208 - a rugged and secure mission computer system designed for deployment in challenging military and aerospace environments. This high-performance system caters to various applications, including mission computing, command/control, electronic warfare, and vetronics. Equipped with powerful graphics capabilities, the DARC VX208 offers optional NVIDIA or AMD GPU modules for networked video streaming and real-time situational awareness. The compact design and modular open architecture of the system make it an ideal choice for integrators seeking to deploy high-performance GPU-based technologies on Size, Weight, and Power (SWaP)-constrained vehicle and aircraft platforms. Importantly, the system is free from International Traffic in Arms Regulations (ITAR) restrictions and is based on the low-power Intel Core i7-1185GRE quad-core processor. Additionally, it complies with various military standards for ruggedness and durability.

In August 2024, Rheinmetall, a Germany-based arms manufacturing company, acquired Loc Performance for USD 950 million. With this strategic acquisition in the USA, the Düsseldorf-based Rheinmetall Group is enhancing its position in the world's largest defense market and reinforcing its core business in land vehicles for military clients globally. Moreover, Rheinmetall is bolstering its production capabilities in the USA to target high-volume major orders for U.S. Army vehicle programs, which have a total potential value exceeding USD 60 billion. Rheinmetall is one of only two remaining participants in the current prototype phase of the XM30 program, aimed at introducing a new generation of infantry fighting vehicles. Loc Performance, a US-based provider of driveline, suspension, track systems, rubber products, armor products, and fabricated structures for vehicle platforms, sells directly to the government, its major prime contractors, and notable vehicle manufacturers in sectors such as agriculture, construction, mining, locomotives, mass transportation, and oil & gas industries.

Major companies operating in the vetronics market are Rheinmetall AG, Raytheon Technologies Corporation, L3Harris Technologies Inc., Lockheed Martin Corporation, Thales Group, Curtiss-Wright Corporation, General Dynamics Corporation, Leonardo SpA, Elbit Systems Ltd., Collins Aerospace, Harris Corporation, Northrop Grumman Corporation, Honeywell International Inc., Moog Inc., Ultra Electronics Holdings PLC, Kongsberg Gruppen ASA, ASELSAN AS, Cobham PLC, QinetiQ Group PLC, Meggitt PLC, Safran Electronics & Defense, Rafael Advanced Defense Systems Ltd., Israel Aerospace Industries Ltd., Aselsan Elektronik Sanayi ve Ticaret AS, BAE Systems PLC, General Electric Company, ITT Inc.

North America was the largest region in the vetronics market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the vetronics market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the vetronics market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Vetronics function as the central digital control systems for hub vehicle platforms, acting as the computerized core equipped with a controlled Ethernet switch. They are responsible for managing the electrical systems in ground combat and amphibious vehicles. The vetronics system consists of hardware and software interfaces essential for operating the vehicle's mobility systems, including propulsion, steering, self-protection mechanisms, and inter-vehicle communication. It operates as a fully redundant computer system, ensuring reliability and redundancy in critical functions.

Various types of vehicles utilize vetronics technology, such as main battle tanks, light combat vehicles, armored personnel carriers, infantry fighting vehicles, and similar platforms. Main battle tank vetronics are integral to heavily armored vehicles designed for direct fire and maneuverability, representing a crucial component of ground force strategies for decades. These systems incorporate various subsystems like weapon and control systems, command and communication setups, navigation and display interfaces, sensor and optronics modules, power systems, and other essential components. Vetronics find application in homeland security and military platforms, supporting critical operations within these sectors.

The vetronics market research report is one of a series of new reports that provides vetronics market statistics, including the vetronics industry's global market size, regional shares, competitors with a vetronics market share, detailed vetronics market segments, market trends and opportunities, and any further data you may need to thrive in the vetronics industry. This vetronics market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The vetronics market consists of sales of C3 systems, vehicle protection systems, and power systems. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

This product will be delivered within 3-5 business days.