Connected Car Market Size, Share and Trends [2024-2030]

The global connected car market is projected to grow from USD 12.4 Billion in 2024 to USD 26.4 Billion by 2030 at a CAGR of 13.3%. The connected car market is experiencing exponential growth, driven by various factors. Foremost is the surging consumer demand for constant connectivity and reliance on technology, particularly among tech-savvy populations. This insatiable need for connectivity is being met by rapid advancements in automotive technology, such as the rollout of 5G networks and AI-powered features.

Governments are also playing a catalyzing role, with regulations like the US Department of Transportation's mandate for vehicle-to-vehicle communication technology in new cars. The popularity of automation, ridesharing, and mobility services is further propelling the connected car market. Finally, the increasing production and sales of vehicles, especially luxury models, supplement this dynamic sector's growth.

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Market Dynamics

DRIVER: Increasing Adoption of Telematics and usage-based Insurance

Telematics has merged into the automotive mainstream at a rapid rate. Car telematics help improve driving behavior and road safety and align insurance premiums via usage-based insurance (UBI). According to GSMA (Global System for Mobile Communications), the telematics industry is estimated to reach USD 750 billion by 2030. There are two significant reasons for the growth of the telematics industry. First is governments' increasing willingness to mandate telematics services such as emergency-call capabilities, which is already happening in the European Union and Russia. Second is the increasing demand for excellent connectivity and intelligence in vehicles. Also, the automotive telematics market is projected to grow from USD 9,041.6 million in 2024 to USD 16,111.0 million by 2030, at a CAGR of 10.1% from 2024 to 2030. This growth is driven by the increasing demand for vehicles with telematics services, growing concerns regarding safety in the event of breakdown and accidents, rising demand for advanced technologies, and the high purchasing power of consumers. Stolen vehicle assistance, insurance-based assessment, and other advanced services are aiding manufacturers in enhancing vehicles' overall safety and efficiency.

OPPORTUNITY: Development of ridesharing and mobility services

Connected autonomous car technology is quickly evolving, and several companies are focusing on this technology, with Tesla leading the way. Autonomous self-driving vehicles are expected to create ridesharing and mobility services opportunities. For instance, Waymo already has driverless cars picking up passengers, while General Motors plans to roll out its service by the end of 2019. Ford indicates it will have a self-driving fleet ready for ridesharing by 2021. Ridesharing and other mobility services with autonomous cars will require a strong IoT backup, as accessing all the services would require connected vehicles and devices. Wi-Fi, 4G, GPS, Bluetooth, and 5G (upcoming) are vital in ridesharing. With the growing number of connected devices, ridesharing will be accessible to a more extensive user base in the future than it is today. Technological advancements in electric vehicles will increase the demand for autonomous vehicles. Shared mobility is also a key growth driver for autonomous vehicles. As people are comfortable sharing rides, it opens revenue doors for ride-sharing companies and mobility service providers.

Cellular networks hold the fastest growing segment for the connected car market in the network segment.

Cellular connectivity, particularly 3G/4G and 5G, is being increasingly adopted by automakers for embedded and integrated connected car solutions due to several key advantages over DSRC. One of the main reasons is the ability to leverage existing cellular infrastructure, which allows automakers to utilize the already deployed network and avoid the costs of setting up dedicated DSRC hardware. This makes cellular a more cost-effective solution for connected car applications, as automakers can integrate the necessary modules into their vehicles. Another significant advantage of cellular connectivity is its improved safety and reliability. Cellular V2X (C-V2X) can provide greater capacity and lower the chance of interruptions in service, ensuring reliable communication for safety-critical applications. C-V2X also offers a more extensive communication range, enabling advanced applications like vehicle-to-home (V2H) and vehicle-to-cloud (V2C) communication. For example, Tesla has been using cellular connectivity to provide over-the-air updates and remote diagnostics for its vehicles, demonstrating the potential of cellular technology in enhancing the connected car experience.

The embedded connectivity segment is estimated to be the largest market during the forecast period.

Embedded systems dominate the connected car market globally due to their seamless integration with vehicles, cost optimization benefits, and ability to meet regulatory requirements. Automakers leverage embedded solutions to comply with government mandates like the eCall system in Europe and California's OBD II standards, ensuring vehicles are equipped with essential connectivity features. Embedded systems also enable automakers to offer cloud-based services such as remote diagnostics, over-the-air updates, and real-time traffic information, enhancing the overall driving experience while optimizing consumer costs. For instance, Tesla's (US) vehicles highlighted the power of embedded connectivity by providing features like remote diagnostics and over-the-air updates through a fully integrated system that sends vehicle data to the cloud for immediate assistance.

North America is the second-largest region in the connected car market.

North America is the largest market for connected cars, driven by advanced technological infrastructure, a robust automotive industry presence, high consumer demand, and a supportive regulatory environment. Considering the vehicles sales in North America, the number of automobiles sold in the US rose from 14.4 million in 2022 to 16.1 million in 2023, in which premium automobile sales (E, F, and SUV - E) category sales went from 1.6 million in 2022 to 1.8 million in 2023, a rise of ~12.1%. Additionally, D-segment car sales in the US rose by 4% from 4.1 million units in 2022 to 1.5 million units in 2023. Improved cellular V2X systems, telematics systems, dynamic route optimisation, in-car Wi-Fi and internet access, and over-the-air software upgrades for sedans and premium vehicles are just a few of the technologies available in these high-end cars.

Key Players

Major manufacturers in the connected car market include Continental AG (Germany), Robert Bosch GmbH (Germany), Harman International (US), Airbiquity (US), and Visteon (US).

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