Military Vetronics Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product Type (Communication & Navigation Systems, Power System, Display System, C4 Systems), By Platform Type (Unmanned Ground Vehicles, Armored Amphibious Vehicles, Light Protected Vehicles), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 7.23 Billion
CAGR (2026-2031)	5.71%
Fastest Growing Segment	Display System
Largest Market	North America
Market Size (2031)	USD 10.09 Billion

Market Overview

The Global Military Vetronics Market will grow from USD 7.23 Billion in 2025 to USD 10.09 Billion by 2031 at a 5.71% CAGR. Military Vetronics, or vehicle electronics, refers to the integrated electronic systems deployed within military land vehicles to manage critical functions such as communications, navigation, surveillance, and vehicle health monitoring. The primary drivers sustaining the market's growth are the urgent operational requirement for enhanced situational awareness and the widespread initiative to modernize aging military fleets for network-centric warfare. These fundamental factors facilitate seamless information exchange and interoperability among allied forces, distinguishing them from broader technological shifts.

According to the Aerospace, Security and Defence Industries Association of Europe, in 2024, the defense sector recorded a turnover increase of 13.8%, reflecting the intensified investment in these modernization priorities. However, a significant challenge that could impede market expansion is the constraint of Size, Weight, and Power (SWaP). As vehicles become increasingly saturated with electronic subsystems, managing the physical footprint and energy consumption of new components without compromising the vehicle's mobility or payload capacity remains a complex technical obstacle.

Key Market Drivers

Rising Global Defense Expenditures Driven by Geopolitical Instability serves as a primary catalyst propelling the Military Vetronics market, as nations prioritize upgrading land warfare capabilities to counter emerging threats. This surge in fiscal allocation allows defense departments to procure next-generation combat vehicles equipped with advanced electronic backbones and retrofit existing platforms with state-of-the-art mission systems. The influx of capital directly supports the integration of high-cost subsystems such as active protection and secure communications. According to the Stockholm International Peace Research Institute (SIPRI), April 2024, in the 'Trends in World Military Expenditure, 2023' Fact Sheet, total global military expenditure reached $2443 billion in 2023, representing a real-terms increase of 6.8%. This expanded budgetary environment provides the essential funding scale required to sustain complex vetronics procurement programs globally.

Accelerated Modernization and Digitization of Legacy Military Fleets further anchors market expansion, as armed forces seek to bridge the gap between aging hardware and modern digital combat requirements. This driver emphasizes the integration of advanced C4ISR capabilities, requiring robust electronic architectures to handle data-heavy sensor fusion. Defense contractors are witnessing substantial growth in their electronic divisions as a result of these upgrade cycles. According to BAE Systems, July 2024, in the 'Half-yearly Report 2024', the company's Electronic Systems sector recorded sales of £3.4 billion, equating to a growth of 34% on a constant currency basis. Simultaneously, the demand for the vehicles housing these electronics is surging. According to Rheinmetall, August 2024, in the 'Financial report for first half of 2024', sales in the Vehicle Systems division increased by 28% year-on-year to reach €1,300 million. This parallel growth highlights the critical role of embedded electronics in contemporary force modernization.

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Key Market Challenges

The constraint of Size, Weight, and Power (SWaP) significantly hampers the growth of the Global Military Vetronics Market by limiting the integration of essential electronic systems. As military land vehicles become increasingly saturated with advanced communications, sensing, and protection modules, the finite physical limits of power generation and chassis capacity prevent further upgrades. This bottleneck forces a strict trade-off where adding new capabilities compromises vehicle mobility and payload, leading to procurement hesitations and extended development cycles for platform redesigns.

This technical barrier directly contradicts the market's strong financial momentum and product availability. According to the Aerospace Industries Association, the U.S. aerospace and defense sector generated $995 billion in combined sales in 2024, underscoring the massive production of next-generation systems waiting for deployment. However, the SWaP ceiling restricts the actual installation rate of these technologies, as legacy and even modern platforms simply cannot support the additional energy and weight requirements. Consequently, despite robust demand and the availability of advanced vetronics, the physical inability to accommodate them acts as a hard stop on market expansion.

Key Market Trends

The Adoption of Modular Open Systems Architecture (MOSA) is fundamentally reshaping the military vetronics landscape by eliminating proprietary constraints and enabling rapid technology insertion. Defense agencies are increasingly mandating these open standards to decouple hardware from software, ensuring that land vehicles can integrate emerging capabilities like advanced sensors and fire control systems without costly platform redesigns. This shift toward standardized, interoperable backbones allows armed forces to maintain technological superiority against rapidly evolving threats while reducing lifecycle sustainment costs. The industrial impact of this transition is evident in the surging demand for compliant electronic components. According to Curtiss-Wright Corporation, February 2025, in the 'Fourth Quarter and Full-year 2024 Financial Results', the company received record new orders of $3.7 billion in 2024, a 20% increase largely driven by the adoption of MOSA-based solutions across its defense markets.

Simultaneously, the Transition Toward Hybrid-Electric and All-Electric Power Systems is gaining momentum as modern military vehicles require unprecedented levels of onboard energy to support power-hungry vetronics. As platforms become saturated with active protection systems, electronic warfare suites, and high-energy lasers, legacy internal combustion engines struggle to meet the intensified electrical loads. Hybrid architectures address this critical gap by providing efficient power generation and management, while also offering tactical advantages such as silent watch capabilities for enhanced stealth. This demand for advanced energy solutions is directly translating into substantial contracts for specialized defense manufacturers. According to Leonardo DRS, February 2025, in the 'Financial Results for Fourth Quarter and Full Year 2024', the company secured $1.3 billion in new funded contract awards during the final quarter, with bookings primarily driven by urgent customer requirements for electric power and propulsion technologies.

Segmental Insights

Based on leading market intelligence, the Display System segment is currently positioned as the fastest-growing category within the Global Military Vetronics Market. This accelerated growth is fundamentally driven by the critical need for enhanced situational awareness in digitized combat environments. As defense forces integrate complex sensor suites and network-centric capabilities, there is an urgent requirement for ruggedized, high-definition interfaces that visualize real-time video and tactical data. These multi-function displays are essential for consolidating information from disparate sources, thereby optimizing the soldier-machine interface and enabling rapid, informed decision-making during high-stakes military operations.

Regional Insights

North America maintains a dominant position in the global military vetronics market, primarily driven by substantial defense expenditures and strategic modernization initiatives within the United States. The U.S. Department of Defense actively invests in upgrading land vehicle fleets with integrated electronic systems to enhance command, control, and situational awareness capabilities. This market leadership is further supported by a robust industrial base of major defense contractors that develop essential navigation and combat management technologies. Furthermore, the adoption of standardized open architectures facilitates seamless technology integration, ensuring that regional demand for advanced vehicle electronics remains strong and consistent.

Recent Developments

• In November 2024, Hensoldt was awarded a contract to upgrade the sensor capabilities of the Fennek armored reconnaissance vehicles for the German Armed Forces. The modernization program involved the integration of the BAA III observation and reconnaissance equipment, which included high-performance thermal imagers and laser rangefinders. This upgrade aimed to enhance the intelligence, surveillance, and reconnaissance performance of the fleet, ensuring that the vehicles remained effective in detecting and identifying targets under adverse conditions.
• In October 2024, Rheinmetall showcased its advanced Electronic Mission Systems during a major defense exhibition, highlighting a collaboration with partner company blackned. The demonstration featured the TacticalCore solution, a digitized middleware designed to improve domain awareness by establishing resilient communication networks across unmanned and autonomous platforms. The display included an interactive commander’s and gunner’s workstation and a close-proximity situational awareness system, illustrating the company's focus on seamless network integration and modular combat vehicle architectures for future battlefield requirements.
• In October 2024, Leonardo DRS unveiled a new radar-based protection module designed to defend military vehicles against emerging aerial threats, including loitering munitions and unmanned aircraft systems. The system integrated the company's Multi-Mission Hemispheric Radar, which utilized advanced four-dimensional detection technology to identify and track targets with high precision. This launch addressed the increasing need for active protection systems that could be rapidly deployed on various ground platforms to ensure crew survivability in complex threat environments.
• In February 2024, Elbit Systems secured a contract valued at approximately $300 million to supply a comprehensive suite of systems for the armored vehicles of a European customer. The agreement, spanning a six-year period, involved the delivery of weapon stations, reconnaissance capabilities, and driving systems. Additionally, the company was tasked with providing situational awareness solutions aimed at enhancing the operational effectiveness of the vehicle fleet. This contract underscored the growing demand for integrated electronic and optical systems in modernizing land defense platforms across Europe.

Key Market Players

• BAE Systems plc
• General Dynamics Corporation
• L3Harris Technologies, Inc.
• Leonardo S.p.A
• Lockheed Martin Corporation
• RTX Corporation
• Rheinmetall AG
• Saab AB
• Thales SA
• Oshkosh Corporation

By Product Type	By Platform Type	By Region
Communication & Navigation Systems Power System Display System C4 Systems	Unmanned Ground Vehicles Armored Amphibious Vehicles Light Protected Vehicles	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Military Vetronics Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Military Vetronics Market, By Product Type:

• Communication & Navigation Systems
• Power System
• Display System
• C4 Systems

• Military Vetronics Market, By Platform Type:

• Unmanned Ground Vehicles
• Armored Amphibious Vehicles
• Light Protected Vehicles

• Military Vetronics Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE