Connected Car Market Size, Share, Growth Analysis, By Service, By Vehicle Connectivity, By End Use, By Form Type, By Region - Industry Forecast 2024-2031

Global Connected Car Market size was valued at USD 34.56 Billion in 2022 and is poised to grow from USD 41.29 Billion in 2023 to USD 143.72 Billion by 2031, growing at a CAGR of 19.50% during the forecast period (2024-2031).

The global connected car market is experiencing significant growth due to several key factors, including technological advancements, shifts in consumer behavior, and new regulatory frameworks. Increased disposable incomes across various regions are also expected to boost market expansion. Advances in telecommunication technology are enhancing vehicle connectivity, while IT equipment is evolving from simple control units to comprehensive platforms offering services like entertainment, navigation, telematics, and diagnostic support. Government initiatives play a crucial role in driving market growth. For example, the U.S. Department of Transportation and the National Highway Traffic Safety Administration have proposed regulations requiring auto manufacturers to install communication devices in vehicles. According to SkyQuest analysis, the U.S. Department of Transportation is also collaborating with state and local transportation agencies, vehicle and device manufacturers, and the public to test connected vehicle technologies that enable vehicles, buses, trains, and other devices to communicate with each other. Connected cars offer features such as enhanced comfort, safety, security, and connectivity. Real-time communication platforms assist drivers in staying attentive, further fueling demand. The ongoing development of 5G technologies and satellite connectivity, supported by government initiatives, also drives market growth. Tech-savvy consumers and the increasing popularity of user-friendly technology contribute to this expansion. Additionally, Original Equipment Manufacturers (OEMs) are playing a significant role by providing sensors, processors, fleet management solutions, wireless systems, and aftermarket services. However, the market faces challenges, such as concerns about unauthorized access to automotive applications, which can impact safety and security. SkyQuest analysis notes that the Biden administration and the Department of Commerce have launched an investigation into potential national security risks associated with connected cars featuring components from countries of concern, such as China. Moreover, inconsistent internet connectivity in various regions can hinder market growth. Despite these challenges, connected cars offer solutions to issues like weather conditions, traffic congestion, and parking, enhancing the driving experience and contributing to market growth.

Top-down and bottom-up approaches were used to estimate and validate the size of the Global Connected Car market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Global Connected Car Market Segmental Analysis

Global connected car market is segmented based on service, hardware, form type, end market, transponder, network, electric vehicle type, and region. In terms of service, the market can be segmented into navigation, remote diagnostics, multimedia streaming, social media and other apps, OTA updates, on road assistance, e-call and SOS assistance, cybersecurity, remote operation, collision warning, auto parking/ connected parking, autopilot, home integration, Stolen Vehicle Recovery/Warning. Based on hardware, the market is segmented into head unit, central gateway, intelligent antenna, electronic control unit, telematic control unit, keyless entry systems, and sensors. Based on form type, the market is segmented into embedded, and integrated. Based on end market, the market is segmented into original equipment manufacturer (OEM), and aftermarket. Based on transponder, the market is segmented into on board unit, and roadside unit. Based on network, the market is segmented into DSRC, and cellular (4G, and 5G). Based on electric vehicle type, the market is segmented into BEV, PHEV, and FCEV. Based on application, the market is segmented into Data Capture and Management, Dynamic Mobility, Road Weather Management, Real-time Information Synthesis, Vehicle Health Monitoring. Based on region, the market is segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

Drivers of the Global Connected Car Market

Technological advancements, particularly in artificial intelligence, IoT, and 5G connectivity, are driving significant growth in the connected car market. In 2023, the expansion of 5G networks and the rollout of Level 3+ Advanced Driver Assistance Systems (ADAS) are expected to boost the adoption of 5G in connected vehicles throughout the decade. The anticipated introduction of 5G RedCap in 2026 will further support the integration of 5G into lower-tier vehicles, accelerating widespread adoption. By 2030, it is projected that nearly 90% of cars sold will be equipped with 5G connectivity. These cutting-edge technologies will enhance existing features such as real-time navigation and advanced telematics, leading to safer driving experiences. Innovations in connected cars will not only improve user experience by offering new functionalities but also contribute to more reliable and efficient vehicle performance.

Restraints in the Global Connected Car Market

Rising concerns over data confidentiality and cybersecurity present significant challenges to the growth of the connected car industry. As vehicles exchange vast amounts of sensitive data, including location and user habits, the risk of data breaches and theft increases. Addressing these issues is crucial for building trust between customers and ensuring the long-term success of the connected car market. Developing and implementing robust data protection measures will be essential in overcoming these obstacles and maintaining consumer confidence.

Market Trends of the Global Connected Car Market

The connected car services market is increasingly embracing subscription-based models, offering rental options that can be paid on a monthly or annual basis, in contrast to traditional ownership models. These subscription plans, such as premium offerings like the "Gold Plan," provide continuous updates and improvements to ensure that connected car systems remain current with the latest advancements and security solutions. The availability of instant services through these plans drives market growth and supports the ongoing evolution of the industry.