CONNECTED VEHICLES MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

Connected Vehicles Market Size and Forecast – 2024 - 2031

The global connected vehicles market is estimated to be valued at USD 75.20 Bn in 2024 and is expected to reach USD 170.30 Bn by 2031, growing at a compound annual growth rate (CAGR) of 12.4% from 2024 to 2031.

Key Takeaways of the Connected Vehicles Market:

• The passenger cars are expected to contribute the highest market share of 55.5% in 2024.
• Aftermarket segment is expected to contribute the highest market share of 53.1% in 2024.
• Vehicle-to-vehicle contributes the highest market share of 45.3% in 2024.
• North America is the leading market and is expected to account for 47.5% market share in 2024.

Market Overview:

The connected vehicles market growth is attributed to increasing demand for connected services such as fleet management, predictive maintenance, usage-based insurance and other connectivity solutions in commercial vehicles. In addition, increasing adoption of advanced driving assistance systems and government mandates for vehicle safety and connectivity are fueling the market growth. However, lack of standardization in connectivity protocols and high costs associated with the implementation of connected vehicle solutions are some of the challenges inhibiting the market growth. Still, upcoming opportunities around autonomous driving, blockchain, and 5G connectivity are expected to provide new growth avenues for connected vehicles market in coming years.

Segmental Insights

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Vehicle Type Insights: Convenience and Connectivity Drives Demand for Connected Passenger Cars

By vehicle type, passenger cars are expected to contribute the highest market share of 55.5% in 2024 owing to modern consumers' increasing demand for convenience and connectivity features in their vehicles. Driven by younger demographics and rapid advancements in mobile technology, there is a growing need for seamless integration of smartphones and in-vehicle systems among passenger car owners. The ability to manage vehicle diagnostics, receive real-time navigation assist, monitor fleet usage, access infotainment like music and media, and leverage advanced safety features through connectivity has become an important decision factor.

End-User Insights: Commercial Fleet Management Optimization Drives Demand from Aftermarket

By end-user industry, the aftermarket segment is expected to contribute the highest market share of 53.1% in 2024 due to the segment's focus on optimizing commercial fleet management operations through connectivity solutions. Fleet owners and operators recognize the scope connected vehicles offer in maximizing asset utilization, reducing downtime, scheduling predictive maintenance, monitoring driver behavior, streamlining logistics and ensuring regulatory compliance.

Vehicle-to-vehicle Witnessed High Traction due to Emphasis on Advanced Safety

By communication, vehicle-to-vehicle contributes the highest market share of 45.3% in 2024 as it facilitates critical safety applications that automakers and drivers prioritize. Connected car technologies based on vehicle-to-vehicle communication are finding more success compared to other applications owing to the strong emphasis on advancing road safety. Technologies such as forward collision warning, blind spot monitoring, do-not-pass warning and left turn assist that leverage real-time data shared between connected vehicles are highly effective in preventing accidents attributed to line-of-sight and human error.

Regional Insights

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North America Connected Vehicles Market Trends

North America is the leading market and is expected to account for 47.5% market share in 2024. The growth can be attributed to strong government support for connected and autonomous vehicle technologies. Countries such as the US and Canada have implemented regulations that promote research and development in connectivity solutions. Additionally, the presence of major automotive OEMs and technology companies in the region is driving innovations.

Asia Pacific Connected Vehicles Market Trends

The Asia Pacific region is expected to exhibit the fastest growth, led by China, Japan and South Korea. The market share is expected to account for 34.6% in 2024. The governments of these countries are actively working to build connected infrastructure and encourage adoption of connected vehicles. Local automakers are also ramping up their connected car portfolios. Companied like Toyota, Honda and Hyundai are at the forefront of bringing advanced connectivity features to mainstream vehicles.

Connected Vehicles Market Outlook for Key Countries

United States Connected Vehicles Market Trends

The rise of autonomous vehicle testing is bringing new opportunities for connected vehicle technology adoption. Several states have passed new laws supporting autonomous vehicle testing on public roads and the US Department of Transportation has provided guidance for safe deployment of these vehicles. For instance, automakers logged over 130,000 miles of autonomous vehicle testing in California alone in 2021 (California Department of Motor Vehicles).

China Connected Vehicles Market Trends

China's market continues to grow exponentially on the back of supportive policies and growing consumer appetite for connected mobility solutions. Industry partnerships between automakers like SAIC, GAC and tech giants Alibaba and Baidu are fueling innovations. The rapid integration of connectivity features in new vehicles has also increased demand for high-speed cellular networks, hardware components, and cloud-based solutions to enable diverse in-vehicle applications and services. This is supported by the Chinese government's continued investments and policy backing for 5G infrastructure development across the country.

Germany Connected Vehicles Market Trends

Connectivity has become increasingly important for both drivers and passengers in vehicles across Germany in recent years. As more people rely on their smartphones and desire to remain digitally connected even while on the go, there is demand for vehicles that integrate seamlessly with mobile devices and offer wireless internet and infotainment options. This trend towards being constantly connected has prompted major automakers like Volkswagen, BMW and Mercedes-Benz to make significant investments in developing connected car technologies and services that can enhance the in-vehicle experience.

Japan Connected Vehicles Market Trends

 The acceptance and mainstreaming of self-driving technologies is another major trend influencing investments towards autonomous driving research and infrastructure development projects across major cities. High profile pilot programs for autonomous shuttles and delivery trucks by robotics startups have generated interest among policymakers as well as carmakers to actively prepare for autonomous vehicle rollouts over the long run. This is prompting automotive leaders and tech companies to collaborate closely on developing advanced mapping, communication and AI systems required for autonomous driving capabilities.

Market Players, Key Devlopment, and Competitive Intelligence

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Top Strategies Followed by Connected Vehicles Market Players

• Established Players: Established players in the connected vehicles market focus on extensive research and development to introduce innovative product solutions. Automotive giants like General Motors invest heavily in R&D, pouring billions annually to develop advanced technologies for connectivity, automation, and alternative fuel vehicles. They form strategic partnerships with major technology providers and automotive suppliers.
• For instance, Ford collaborated with Qualcomm to develop Snapdragon Automotive Cockpit platforms for infotainment and telematics systems.
• Mid-sized Players: Mid-sized players adopt cost-effective strategies to target price-conscious customers. They concentrate on low-cost manufacturing and efficient supply chain management to offer affordable options. Some partner with startups working on shared mobility and EV technologies.
• For example, Hyundai invested in Arbe Robotics, an Israeli startup developing 4D imaging radar for autonomous vehicles.
• Small players focus on specialized niche areas underserved by larger firms. SMEs exploit gaps in aftermarket accessories, fleet management, security, or rural transportation. They rapidly adopt newer technologies like AI, blockchain and cloud to expand offerings. Local tie-ups help gain customer trust and market presence. For example, Momentum Dynamics partners with local EVs makers and transit agencies to install innovative wireless charging infrastructure.

Emerging Startups in the Connected Vehicles Market

• Several startups are developing innovative technologies to influence the future of connected mobility. Ridecell provides an operating system for mobility services and smart cities. Its platform enables coordination of shared automated vehicles. Anthropic develops generalized AI safety techniques. It works on ensuring AI and machine learning systems are beneficial to humanity when deployed in vehicles.
• Startups also focus on sustainability. Innoviz develops solid-state LiDAR sensors as a cheaper and more ecofriendly alternative to existing solutions. The sensors could facilitate mass adoption of self-driving vehicles while reducing costs and raw materials usage compared to prior technologies. Proterra provides electric buses and charging infrastructure to cities, helping reduce transportation sector emissions.
• Some startups fulfill unique mobility demands. May Mobility offers autonomous shuttle services tailored for corporate campuses, residential areas and retirement communities. Its vehicles connect people in areas not served by public transport. AutoX collaborates with local partners in China and abroad to pilot self-driving vehicles for delivery services and ride-hailing applications.

Key Developments:

• In September 2024, BMW announced collaboration with Intel’s Mobileye for fully integrated autonomous vehicle technology by 2026. Volkswagen released updates to its Cariad platform, enhancing EV range prediction and charging optimization.
• In March 2024, Mercedes-Benz: Achieved Level 3 autonomy certification in Europe for its S-Class and EQS models, enabling conditional hands-free driving. Ford partnered with Qualcomm to integrate Snapdragon Digital Chassis for improved connectivity in its EV lineup.
• In January 2022, Ford expanded its collaboration with Google to integrate Android Automotive OS in select 2023 models, enhancing infotainment and connected services. BMW announced the deployment of iDrive 8 with AI personalization for real-time assistance in new models.
• In June 2022, Volkswagen: Introduced new Cariad software updates focusing on EVs, adding over-the-air (OTA) update capabilities. Tesla released a significant update to Full-Self Driving (FSD) Beta, adding features for complex intersections.

Market Report Scope

Market Dynamics

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Connected Vehicles Market Growth Factors- Growing Concerns Regarding Vehicle Safety

With the rising number of vehicles on roads every year, the concerns regarding safety of passengers as well as other road users have increased manifold. Vehicles today come equipped with several safety features like airbags, anti-lock braking systems, traction control systems etc. but the communication between vehicles is still very limited. In case of any accident or emergency, other vehicles in vicinity do not get immediate alert which could help prevent chain accidents. The risks are much higher in conditions of low visibility like in foggy weather or at night time. Connected vehicle technology aims to tackle these issues by enabling vehicle-to-vehicle and vehicle-to-infrastructure communication.

Market Challenge - Data Privacy and Security Concerns

One of the major challenges faced by the connected vehicles market is data privacy and security concerns. As connected vehicles will be generating and transmitting a massive amount of data including sensitive personal information such as driving habits, and location. There are significant concerns around protecting this data from potential cyber-attacks or unauthorized access. Any leaks of privacy data can undermine user trust in the technology.

Automakers will need to focus on implementing stringent data security protocols and privacy policies to allay these concerns. Additionally, with vehicles getting more connected, there is a need for frameworks and regulations around the use, storage and sharing of data to hold companies accountable. Unaddressed, these privacy and security challenges can significantly hamper consumer adoption of connected vehicles technologies.

Market Opportunity- Scope for Advanced Applications of Connected Vehicles Technology for Market

The growing capabilities of connected vehicles technologies open up significant opportunities to develop advanced applications that can drive the market to new heights. Connected vehicles allow for innovative IoT-based services integrated with other technologies like artificial intelligence, cloud computing etc. This scope to develop applications in areas such as autonomous driving, advanced navigation, telematics, infotainment, fleet management and predictive maintenance can boost the connected vehicles market.

For example, connected vehicle data can be leveraged to offer personalized in-vehicle experience for consumers or remote diagnostics and predictive repair services to optimize fleet operations for businesses. Overall, the interconnected nature of connected vehicles presents a massive scope to design and deploy diverse solutions to realize tangible benefits - greatly expanding the potential of this emerging industry.

Analyst Opinion (Expert Opinion)

• The connected vehicles market is poised to grow significantly over the next decade. Drivers such as increasing consumer preference for connected features and stringent government regulations for vehicle safety will support market expansion. However, cybersecurity threats pose a challenge as connected vehicles amass and exchange huge amounts of sensitive driver data. If automakers and tech companies do not find robust solutions to secure vehicle networks and personal data, it could restrain the market's growth trajectory.
• The aftermarket for connected vehicle services will experience increased opportunities as drivers look for ways to retrofit older vehicles with new connectivity options without buying a new car. Telematics technology providers also have an opportunity to offer their services and hardware to more automakers and fleets to capture more of the value chain. On the connectivity side, 5G networks are anticipated to proliferate over 4G and create even more stable platform for rapid vehicle communication.

Market Segmentation

• By Vehicle Type Insights (Revenue, USD, 2019 - 2031)
• • Passenger cars
  • Commercial Cars
• By End-user Industry Insights (Revenue, USD, 2019 - 2031)
• • Aftermarket
  • OEM
• By Communication Insights (Revenue, USD, 2019 - 2031)
• • Vehicle-to-vehicle
  • Vehicle-to-pedestrian
  • Vehicle-to-infrastructure
• By Connectivity Insights (Revenue, USD, 2019 - 2031)
• • DSRC
  • Cellular
  • Satellite
  • Wi-Fi
• Regional Insights (Revenue, USD, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
• • Continental AG
  • Robert Bosch GmbH
  • Harman International
  • Denso Corporation
  • Visteon Corporation
  • Intellias
  • Qualcomm Technologies Inc.
  • Ford Motor Company
  • BMW Group
  • Samsung Electronics
  • Veoneer Inc
  • Magna International Inc.