Connected Vehicles Market Size and Trends

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.

Connected Vehicles Market Concentration by Players

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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.