Global Connected Cars Market Outlook to 2030

Global Connected Cars Market Overview

• The Global Connected Cars Market was valued at USD 12 billion in 2023. This market is primarily driven by the increasing integration of advanced driver assistance systems (ADAS), the deployment of 5G networks, and the rising consumer demand for in-car connectivity and enhanced safety features.

• Major players in the global connected cars market include General Motors, BMW, Tesla, Ford Motor Company, and Volkswagen. These companies are at the forefront of innovation, focusing on the development of sophisticated connected car solutions that enhance vehicle safety, improve user experience, and support autonomous driving capabilities
• In 2023, Tesla launched its new Full Self-Driving (FSD) beta version, In August 2024, Tesla confirmed the rollout of FSD v12.5 for Hardware 3 (HW3) cars in the 2024.26.15 update .This market is primarily driven by the increasing integration of advanced driver assistance systems (ADAS), the deployment of 5G networks, and the rising consumer demand for in-car connectivity and enhanced safety features.
• The Asia-Pacific region dominated the global connected cars market due to rapid adoption of advanced automotive technologies, significant investments by regional automotive manufacturers, and supportive government policies.

Global Connected Cars Market Segmentation

The global connected cars market is segmented by connectivity type, service type, and region.

By Region: The global connected cars market is segmented into North America, Europe, Asia-Pacific (APAC), Middle East & Africa (MEA), and Latin America. In 2023, Asia-Pacific led the market, driven by the rapid adoption of advanced automotive technologies and significant investments in connected vehicle infrastructure.

By Connectivity Type: The market is segmented into embedded, tethered, and integrated connectivity solutions. In 2023, embedded connectivity solutions held the highest market share due to their reliability and secure data transmission capabilities, which are critical for applications like emergency services and vehicle diagnostics.

By Service Type: The market is segmented into safety & security, driver assistance, infotainment, and others. In 2023, safety & security services accounted for the largest market share, driven by the increasing demand for real-time monitoring and emergency response capabilities in vehicles.

Global Connected Cars Market Competitive Landscape

• General Motors: In 2023, General Motors announced a $2 billion investment to accelerate the development of its connected car technology.The investment will be used to expand the company's OnStar platform, which provides safety, security, and vehicle diagnostics services.
• BMW: In 2023, BMW announced a strategic investment of USD 1.6 billion aimed at enhancing its connected car technologies. This investment is part of BMW's broader strategy to integrate advanced digital features into its vehicles, focusing on improving user experience and safety.

Global Connected Cars Market Analysis

Global Connected Cars Market Growth Drivers:

• Increased Investment in 5G Infrastructure: The expansion of 5G networks is a critical driver for the connected car market, facilitating faster data transmission and improved connectivity. In 2024, the Federal Communications Commission (FCC) in the United States has allocated $9 billion for the deployment of 5G infrastructure, which is expected to enhance vehicle-to-everything (V2X) communication capabilities.
• Government Mandates for Vehicle Safety Technologies: The U.S. Department of Transportation has mandated that all new vehicles must be equipped with vehicle-to-vehicle (V2V) communication technology by 2025. This initiative aims to reduce traffic accidents and fatalities, driving the demand for connected car technologies that enhance safety features and improve overall vehicle performance.
• Rising Demand for Enhanced In-Car Experiences: According to a survey by the National Automobile Dealers Association, 70% of consumers expressed a desire for vehicles that offer seamless connectivity with personal devices. This demand is driving automakers to invest in advanced infotainment systems and connectivity solutions, thereby propelling the growth of the connected car market.

Global Connected Cars Market Challenges:

• Cybersecurity Risks: As vehicles become more connected, they are increasingly vulnerable to cyber-attacks. In 2024, there were multiple incidents of vehicle hacking, highlighting the need for cybersecurity measures to protect sensitive data and ensure vehicle safety. The increasing complexity of vehicle software and the growing connectivity of vehicles to external networks pose significant challenges
• Lack of Standardization: The absence of standardized connectivity protocols complicates the integration of different systems and hinders the deployment of universal vehicle-to-everything (V2X) communication. This lack of standardization poses a challenge to the scalability of connected car technologies.

Global Connected Cars Market Government Initiatives

• EU General Safety Regulation 2022: The GSR is a significant step forward in the EU's efforts to improve road safety and reduce emissions. In 2022, by mandating the adoption of connected car technologies, the regulation is expected to save over 25,000 lives and prevent at least 140,000 serious injuries by 2038.Additionally, the increased use of connected car technologies is expected to reduce road accidents by 30%
• China's 2024 New Energy Vehicle (NEV) Development Plan: In 2024, Energy Vehicle (NEV) Development Plan, announced by the Ministry of Industry and Information Technology, includes an investment in research and development for smart vehicle technologies. This initiative focuses on advancing connectivity and autonomous driving, aiming to position China as a global leader in smart vehicle innovation by 2025.

Global Connected Cars Market Future Market Outlook

The Global Connected Cars Market is expected to grow substantially over the coming years, driven by advancements in connectivity technologies, increasing demand for enhanced in-car experiences, and supportive government initiatives.

Global Connected Cars Market Future Market Trends

• Expansion of Autonomous Driving Capabilities:
  By 2028, it is anticipated that a significant number of new vehicles will be equipped with advanced autonomous driving capabilities. Ongoing investments from automotive manufacturers and technology companies will drive the development of these technologies, enhancing vehicle safety and efficiency.
• Rise of Subscription-Based Models and In-Car Commerce:
  Subscription-based models and in-car commerce are projected to grow significantly by 2028, driven by consumer demand for flexible and personalized services. Automotive manufacturers and technology providers are expected to offer a wide range of subscription services, enhancing the overall driving experience.