Key Takeaways
Modern cars present a large attack surface with over 50 different IoT devices that can allow hackers to steal data or take remote control of the vehicle.
The automotive security industry is expected to grow at a CAGR of 18.56% for the next 7 years due to increasing regulation and a growing number of attacks.
The market is segmented by hardware vs software and the stage of the vendor’s involvement in manufacturing with concentrated growth in cloud cybersecurity software products.
LG buys Israeli automotive security firm
LG Electronics, the Korean tech giant, is making an acquisition that points to its ambitions in an emerging area: next-generation automotive hardware and services. The company announced last week that it will be acquiring Cybellum, an Israeli automotive cybersecurity specialist that detects and assesses vulnerabilities in connected vehicle services and hardware.
As it stands now, if the valuation remains consistent, the deal in total will be worth some $240 million.
“It’s no secret the critical role software plays in the automotive industry and with it comes the need for effective cybersecurity solutions,” said Dr. Kim Jin-yong, president of the LG Electronics Vehicle component Solutions Company, in a statement. “This latest deal will further strengthen LG’s solid foundation in cybersecurity, enabling us to be even more prepared for the era of connected cars.” This is an area that LG has been eyeing since last year.
Cybellum’s technology, and LG’s acquisition of it, underscore some significant trends in the world of connected cars and cybersecurity.
Why is automotive cybersecurity essential?
Modern cars have dozens of computers on board, and they’re not just for running GPS or playing music. Computers monitor and control nearly every system on your vehicle, including steering, brakes, and the engine itself. Modern vehicles have up to 50 different automotive IoT devices (computers) hackers can attack.
If a vehicle’s computer systems aren’t properly protected, hackers can steal data or even take control of the vehicle. Hackers can use commands to activate or deactivate different features like your A/C and windshield wipers, or to control your steering, brakes, or engine. Check out this video of cybersecurity researchers remotely hacking a Jeep Cherokee while someone was driving it on the highway.
As you can imagine, that makes automotive cyber security a major concern for consumers, auto companies, and OEMs (original equipment manufacturers) alike. This is why automotive cyber security is essential.
Connected vehicles represent a new attack vector for malicious hackers, and a very complicated one. It will only become more complex as vehicles evolve to be “smarter,” more connected and eventually more autonomous: There will be more connected systems and even more reliance on them working correctly to work safely.
Threat Landscape
Upstream Security, a leading provider of cloud-based automotive security solutions, released a 2021 Automotive Cybersecurity Report that shares in-depth insights and statistics gleaned from analyzing publicly reported automotive cyber incidents since 2010. Here are the major takeaways:
The number of automotive cybersecurity incidents has increased dramatically: Since 2016, the number of annual incidents has increased by 605%, with incidents more than doubling in the last year alone.
Most incidents are carried out by criminals: 57% of incidents in 2019 were carried out by cybercriminals to disrupt businesses, steal property, and demanding ransom. Only 38% were the result of researchers with the goal of warning companies and consumers of discovered vulnerabilities.
A third of all incidents involved keyless entry attacks: The top three attack vectors over the past ten years were keyless entry systems (30%), backend servers (27%), and mobile apps (13%), with a 73% growth in server attacks in 2020.
A third of incidents resulted in car theft and break-ins: The top three impacts of incidents over the past ten years were car thefts/break-ins (31%), control over car systems (27%), and data/privacy breaches (23%).
The vast majority of incidents in 2020 involved remote attacks: 80% of incidents in 2020 involved short and long-range remote attacks, which do not require physical access to the vehicle and can be carried out from anywhere in the world.
Compliance and Regulations
Compliance is a pretty big deal when it comes to avoiding fines, penalties, and potential lawsuits.
National government and regulatory bodies across the globe have called for standards and regulations in terms of both safety and privacy. For example, in the U.S., the federal government proposed cybersecurity standards for automobiles — the SPY Car Act of 2017 (S.2182) and the SELF DRIVE Act (H.R. 3388). 2020 saw the creation of new automotive cybersecurity standards and regulations with the WP.29 CSMS regulation from the UN and the ISO/SAE 21434 standard.
These regulations basically require the consent of vehicle owners to use any of their personal driving information that is collected and force auto manufacturers or OEMs to abide by certain cybersecurity frameworks to ensure that critical cybersecurity infrastructure is in place. The development of two more regulations in that last year highlights that automotive cybersecurity is of growing importance to a wide array of stakeholders.
State of the market
The global automotive cybersecurity market size is estimated to be $1.9 billion in 2020. According to Market Research Future, the automotive cyber security market will be worth $8.94 billion by 2028, meaning a CAGR of 18.56%.
Multiple cybersecurity products are needed to protect connected cars. There are essentially three product segments: cybersecurity hardware, embedded cybersecurity software and cloud cybersecurity software. Cloud cybersecurity platforms may be the most important, especially when protecting fleets of vehicles. Cloud cybersecurity provides real-time attack detection for vehicle fleets. The cloud platform also delivers situational awareness for a fleet’s cyber health and threats.
Most of the automobile manufacturers do not have the necessary software development capabilities to keep up with the threats. The automobile manufacturers are mostly responsible for integrating the cybersecurity solution with the hardware of the vehicle while the rest is the responsibility of the cybersecurity provider. The following image shows an overview of the vendor landscape of automotive security
Automotive cybersecurity solution providers develop software specific for the auto industry that can be integrated and run on hardware made by tier 1 and tier 2 suppliers. Tier 1 suppliers are companies that supply parts or systems directly to OEMs. These suppliers usually work with a variety of car companies, but they’re often tightly coupled with one or two OEMs. Many firms supply parts that wind up in cars, even though these firms themselves do not sell directly to OEMs. These firms are called Tier 2 suppliers. Tier 2 suppliers are often experts in their specific domain, but they also support a lot of non-automotive customers and so they don’t have the ability or desire to produce automotive-specific parts. Each layer of this pyramid affects the security of a car and each layer faces different regulations and standards.
Conclusion
Automotive security is an essential industry that can protect the privacy and safety of drivers. The industry’s rapid growth is being driven by increased regulation and a growing number of attacks. Vendors can be segmented in many different ways depending on product and the stage of manufacturing, and there is concentrated growth in cloud solution providers. This is an industry important enough for huge buyouts, but young enough that there is plenty of room for innovation.