Connected Car Market - Size, Share, Industry Trends, and Forecasts (2025 - 2032)

By Technology:

Based on technology, the market is segmented into embedded, tethered, and integrated system.

Trends in the technology:

• Rising integration of embedded system for improved vehicle connectivity and performance.
• There is a rising trend towards adoption of integrated system in connected vehicle, attributing to its enhanced functionalities and improved communication.

The integrated system segment accounted for a significant revenue in the overall market in 2024, and it is anticipated to register a substantial CAGR during the forecast period.

• Integrated systems includes a combination of embedded and tethered systems, wherein various subsystems and technologies within the vehicle work together seamlessly.
• Integrated system combine various systems, which in turn provides more inclusive features, including predictive maintenance or improved route planning through real-time data from multiple sources.
• Moreover, integrated systems enable seamless data exchange among different vehicle systems and external networks, which further enhances situational awareness and overall safety.
• According to the connected car market analysis, the aforementioned benefits of integrated system is increasing its adoption in connected vehicle, in turn proliferating the connected car market trends.

By Vehicle Type:

Based on the vehicle type, the market is segmented into ICE cars, electric cars, and hybrid cars.

Trends in the vehicle type:

• Increasing adoption of ICE cars, due to its several benefits including increased availability of refueling stations, quicker acceleration, higher power output, and others.
• There is a rising trend towards adoption of electric cars, attributing to its lower emissions and eco-friendliness.

ICE cars segment accounted for the largest revenue share in the total connected car market share in 2024.

• ICE (internal combustion engine) cars include petrol/diesel-powered cars, which are the most prevalent in the automotive sector.
• Moreover, petrol/diesel is readily available at fueling stations, making it convenient for consumers to refuel their vehicles.
• Additionally, ICE cars offer a range of benefits including quicker acceleration, higher power output, smooth operation, and lower costs, which are primary determinants for increasing its adoption among users.
• For instance, according to the Press Information Bureau (PIB), the total registration of ICE vehicles in India including petrol vehicles and diesel vehicles reached up to 1,80,56,749 units and 24,02,341 units respectively in 2023.
• According to the analysis, the rising adoption of ICE cars is propelling the connected car market trends.

Electric cars segment is anticipated to register fastest CAGR growth during the forecast period.

• Electric cars use electric motors powered by batteries instead of internal combustion engines.
• Moreover, electric cars provide numerous benefits including lower emissions, eco-friendliness, immediate torque delivery, cost-efficiency, and availability of wide range of models among others. The above benefits of electric cars are driving the growth of the segment.
• For instance, according to the International Energy Agency, the total sales of battery electric vehicles (BEVs) in Europe reached 2.2 million units in 2023, demonstrating a substantial increase of 37.5% in comparison to 1.6 million units in 2022.
• Therefore, the increasing adoption of electric vehicles is anticipated to propel the market during the forecast period.

By Connectivity Type:

Based on connectivity type, the market is segmented into DSRC and cellular.

Trends in the connectivity type:

• Significant integration of DSRC technology due to its ability to provide high-speed communication and operate in extreme weather conditions.
• There is a rising trend towards utilization of cellular connected vehicle, attributing to its several benefits including direct communication over longer distance, improved non-line-of-sight performance, enhanced reliability of security messaging and features, and others.

The DSRC segment accounted for a significant revenue in the overall market in 2024.

• Dedicated short-range communication (DSRC) refers to a technology used for facilitating direct wireless exchange of connected vehicle and other intelligent transportation system data among vehicles, other road users, as well as roadside infrastructure.
• DSRC primarily operates in the 5.9 GHz band, and offers low latency, direct information exchange among vehicles and the infrastructure.
• Moreover, DSRC can provide high-speed communication even in the presence of obstructions. DSRC is also capable of handling fast-changing environment at high speeds and operating in extreme weather conditions.
• According to the market analysis, the aforementioned benefits of DSRC technology is increasing its adoption in connected vehicles, in turn driving the connected car market size.

The cellular segment is anticipated to register a substantial CAGR growth during the forecast period.

• Cellular communication technology enables network and direct connection among cars and other vehicles, infrastructure, electronics, and gadgets.
• Cellular communication technology is capable of transmitting data on multiple variables such as vehicle position, direction, and speed, along with conditions on the road, between cars and other devices through LTE and 5G.
• For instance, Qualcomm offers cellular vehicle-to-everything (C-V2X) technology in its solution offerings. Qualcomm’s C-V2X technology can help in improving vehicle connectivity in connected vehicles, enhancing autonomous driving, and supporting smart transportation.
• Thus, increasing advancements associated with cellular communication technology for integration in connected vehicles are anticipated to propel the market during the forecast period.

By Communication Technology:

Based on communication technology, the market is segmented into vehicle-to-vehicle (V2V), vehicle-to-pedestrian (V2P), vehicle-to-infrastructure (V2I), vehicle to everything (V2X), and others.

Trends in the communication technology:

• Rising trend towards integration of vehicle-to-vehicle (V2V) technology to enable vehicles to connect to one another and share information related to speed, braking, geolocation, stability, and travel direction among others.
• Increasing adoption of vehicle-to-pedestrian (V2P) technology to provide warnings to the pedestrian of an approaching vehicle or warnings to the vehicle regarding vulnerable road users.

The vehicle-to-vehicle (V2V) segment accounted for the largest revenue share of 31.37% in the total connected car market share in 2024, and it is anticipated to register a substantial CAGR growth during the forecast period.

• Vehicle-to-vehicle (V2V) refers to a communication technique in which vehicles connect with one another by using dedicated short-range communications (DSRC) or 5G connectivity, which further helps in crash avoidance.
• Moreover, V2V communication enables cars to communicate directly with each other, for sharing information related to location, speed, and potential road hazards.
• For instance, Qualcomm’s cellular-vehicle-to-everything technology enables vehicles to directly communicate with other vehicles (V2V), with low-latency messages for driving applications for providing an immediate safety benefit.
• Therefore, increasing advancements associated with V2V communication technology are driving the connected car market growth.