As the automotive industry shifts toward software-defined vehicles (SDVs), in-cabin sensing technologies are evolving beyond regulatory compliance to become a core part of vehicle intelligence. Yulin Wang, Senior Technology Analyst at IDTechEx, highlights how automakers are leveraging existing infrared (NIR) and RGB cameras to enhance user experiences and unlock new revenue streams. This transformation is detailed in the latest IDTechEx report, “In-Cabin Sensing 2025-2035: Technologies, Opportunities, and Markets,” which explores the impact of AI-powered personalization, safety enhancements, and sensor fusion on modern vehicles.
Monetizing In-Cabin Sensing Beyond Compliance
With regulations such as the EU’s Advanced Driver Distraction Warning (ADDW) on the horizon, automakers are required to integrate driver monitoring systems (DMS) that detect drowsiness and distraction. However, as Wang notes, these systems are now being expanded to offer advanced personalization features.
Facial recognition, powered by AI-driven analytics, is enabling driver authentication, customized in-cabin settings, and even security enhancements. Automakers are turning these capabilities into subscription-based services, allowing users to unlock additional comfort, convenience, and safety features post-purchase through over-the-air (OTA) software updates.
The Expanding Role of Occupancy Monitoring Systems (OMS)
Unlike DMS, which is primarily driven by regulation, occupancy monitoring systems (OMS) are gaining traction for their ability to improve passenger safety and in-cabin automation. OMS can enhance airbag deployment, climate control adjustments, and theft prevention, but their adoption faces technical challenges.
One key issue, Wang explains, is sensor obstruction—for example, child seats can block NIR light, reducing detection accuracy. To address this, manufacturers are integrating hybrid sensing solutions that combine NIR+RGB cameras with in-cabin radar.
Radar’s Emergence in In-Cabin Sensing
In-cabin radar technology is a growing trend, offering continuous monitoring of physiological signals like breathing and heart rates. Operating at 60 GHz, these radar sensors are particularly useful for child presence detection, helping prevent tragedies related to unattended children in vehicles.
Tesla has already integrated in-cabin radar in its Model Y, signaling a move toward broader adoption. However, as Wang points out, cost remains a challenge—current radar modules cost over $35 per unit, limiting their deployment in cost-sensitive vehicle segments. Industry projections suggest that with higher production volumes, this cost could drop to $20 per unit, making radar-based sensing more widely accessible in mid-range cars.
Software-Defined Vehicles: The Key Enabler of In-Cabin Innovations
The shift toward SDVs is making these advancements possible. Centralized computing architectures allow automakers to extend hardware capabilities through OTA updates, continuously improving in-cabin sensing features without requiring physical upgrades.
According to IDTechEx research, edge AI computing is playing a crucial role in real-time data processing, enabling features such as emotion recognition, stress detection, and adaptive user experiences. This shift not only improves safety but also enhances user engagement and brand differentiation in an increasingly competitive automotive landscape.
The Future of Smart, Adaptive Vehicles
As highlighted in IDTechEx’s report, “In-Cabin Sensing 2025-2035: Technologies, Opportunities, and Markets,” the automotive industry is entering a new era where in-cabin sensing evolves from a regulatory necessity to a major value proposition. Automakers are leveraging AI-driven functionalities to enhance personalization, safety, and monetization opportunities, paving the way for a smarter, more interactive driving experience.
With DMS adoption mandated by regulations, and OMS and radar-based sensing expanding vehicle intelligence, the next decade will bring rapid innovation in in-cabin technologies. As costs decline and software-defined architectures become the industry standard, vehicles will increasingly adapt to their occupants in real-time, transforming the way people interact with their cars.
For a deeper analysis of these trends, IDTechEx’s report, “In-Cabin Sensing 2025-2035: Technologies, Opportunities, and Markets,” provides detailed insights into the evolving market, key players, and emerging technologies shaping this field.
