Connected Car Devices Market - Growth, Trends, and Forecasts (2023 - 2028)

The connected car device market was valued at USD 11.6 billion in 2021 and is expected to reach USD 34.13 billion by 2027, registering a CAGR of over 21% during the forecast period (2022 - 2027).

The COVID-19 pandemic had a severe effect on the market owing to the slowdown of the global automotive industry. The lockdown norms implemented across the world, have severely impacted the market. However, the increasing electrification and self-driving cars are driving the demand for connected cars in the industry.

Connected car devices essentially assist in monitoring vehicles and drivers. Various sensors embedded into the vehicles provide an opportunity to monitor the vehicle's health. This enables the owners to get predictive maintenance for the vehicles without any hiccups. This technology is extremely useful for commercial fleet operators and owners. It helps them maintain a high run-time and low downtime or maintenance time, reducing the scope for losing out on revenue due to vehicle repairs.

The major factors that are driving the market are the increasing occurrences of vehicle theft, and a robust spike in the number of road accidents, particularly due to unsafe driving habits, such as over-speeding, hard cornering, and unmanageably dense traffic. Apart from the aforementioned drivers, vehicle connectivity has also gained traction, due to the preference of in-car Wi-Fi hotspots and data services, for providing infotainment facilities.

Vehicle automation presents the most lucrative opportunity for connected car devices, which provide the necessary (initial) inter- and intra-vehicle communication and response infrastructure, to facilitate autonomous capabilities.

Connected Car Devices Market Trends

Increasing Electrification and Automation

The increasing electrification and automation in the automotive industry are expected to drive the market significantly during the forecast period. Heavy investments from automakers are expected to cater to the growing demand for EVs and play a major role in the evolution of the electric vehicle market. OEMs offer electric vehicles in different segments ranging from hatchbacks such as Nissan Leaf to high-end sedans like Tesla Model 3. For instance,

Ford company had previously committed to spending USD 11.5 billion on electrifying its vehicle lineup through 2022, and in its recent announcement, it increased its investment in autonomous and electric vehicles amid continuous lockdowns to boost vehicle sales.

Government regulations and permissions are also being observed, driving the growth faster towards automation and connected vehicles. For instance, The Department for Transport - United Kingdom, in April 2021, said automated lane-keeping systems (ALKS) would be the first type of hands-free driving legalized.

The higher number of self-driving cars operating on the road has made roads relatively safer compared to the previous years. Manufacturers of these cars have reported a positive growth rate in the increase in accident prevention. For instance, in August 2022, Tesla published that its autopilot enabled cars to prevent approximately 40 possible car crashes every day. Owing to such reliable car capabilities, there is an increasing demand for connected cars and consequently, connected car devices. This is expected to drive significant revenue into the market during the forecast period.

Europe and North America Dominating the Market

The European and North American regions are expected to dominate the connected car device market, followed by Asia-Pacific.

United States is considered to be a pioneer, in terms of vehicle connectivity. The US Transportation Department has taken a new initiative to accelerate the deployment of vehicle-to-vehicle (V2V) communications technology. This new proposal is expected to be mandatory by 2023. Additionally, the demand for smart solutions in the fields of mobility, vehicle management, safety, and driver assistance, has been continually increasing in the country over the past few years, and integration of these cutting-edge technologies has been one of the crucial parameters for customers in purchasing new vehicles.

In the EU, the European parliament implemented the regulation, mandating e-call systems in vehicles that ensure the passenger's safety, and it has been estimated that they may save more than 2,500 lives on the road. These initiatives and favorable regulations increase the number of connected vehicles on roads, which further creates a huge demand for connected vehicle services and connected vehicle devices.

In the Asia-Pacific region, China leads the market for connected car devices, followed by Japan. The demand for embedded connectivity in vehicles from the consumers and the shift toward connected vehicles has expanded the market for connected car devices in the country.

Connected Car Devices Market Competitive Analysis

Some of the key players of the connected car device market are Continental AG, Robert Bosch GmbH, Denso Corporation, Autoliv, Autotalks, and Valeo SA. The companies are making partnerships for developing more advanced technology, and for being ahead in the competition. For instance; Bosch and Mojio unveiled a jointly developed, IoT integrated emergency response solution. The new offering adds crash detection and emergency call (eCall) response to an existing connected car solution from Mojio.

New players are entering, with this market offering immense growth opportunities. These new companies are expanding rapidly to cater to the expected high demand for connected cars. For instance, Raythink, a world-leading ARHUD solution provider for the automotive and transportation industry, announced that it has raised around USD 15 million in Series A+ funding. This funding is expected to be used for R&D and company expansion.

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