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Automotive Internet of Things (IoT) Market (By Application: Vehicle-to-Everything (V2X) Communication, Advanced Driver Assistance Systems (ADAS), Infotainment Systems, Telematics, Others; By Component: Hardware Software, Services; By Communication: In-Vehicle Communication, Vehicle-to-Vehicle Communication, Vehicle-to-Infrastructure Communication; By Vehicle Type: Passenger cars, Commercial vehicle, Electric Vehicle, Others) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Analysis And Forecast 2024 To 2033

Automotive Internet of Things (IoT) Market Size and Growth 2024 To 2033

The global automotive internet of things (IoT) market size was accounted at USD 165.28 billion in 2023 and is expected to reach around USD 872.14 billion by 2033, growing at a compound annual growth rate (CAGR) of 18.09% from 2024 to 2033.

The automotive internet of things (IoT) market refers to the integration of IoT technologies within the automotive industry, enabling vehicles to communicate with each other and with external systems. This market encompasses smart sensors, connected infotainment systems, telematics, and advanced driver-assistance systems (ADAS) that enhance vehicle safety, efficiency, and user experience. Growth is driven by rising consumer demand for connected car features, advancements in 5G technology, and increasing focus on vehicle safety and automation. Key benefits include improved navigation, real-time diagnostics, and enhanced vehicle-to-everything (V2X) communication, transforming modern transportation.

  • “Jio Platforms President and CEO Kiran Thomas announced a collaboration with MediaTek to revolutionize the mobility industry. The partnership will leverage Jio Things’ 4G Smart Android Digital Cluster, App Suite, and Smart Module solutions to advance automotive technology and connectivity.”
  • ” Volvo Group is implementing a new IoT network at its Lyon, France, manufacturing facility to enhance factory efficiency. This initiative aims to reduce operational costs and improve maintenance services, addressing key concerns for automobile manufacturers by making the factory smarter and more connected.”
  • “Research indicates that eSIM technology is accelerating adoption in IoT sectors like automotive and smart cities. The smart city sector, in particular, is expected to see the highest demand for eSIM-enabled services, driven by technological and market advancements.”
  • “Blake Moret, CEO of Rockwell Automation, addressed IoT adoption and its impact on industrial productivity at Cisco’s IoT World Forum in London. As the sole company focused on industrial automation and information, Rockwell Automation is uniquely equipped to navigate the challenges and opportunities in smart manufacturing.”

Report Highlights

  • By Region, the North America has recorded highest revenue share of 37% in the year of 2023.
  • By Region, Asia Pacific is experiencing significant growth in the market by generating revenue share of 24% in 2023.
  • By Component, the hardware segment has dominated the market by holding revenue share of 59% in 2023.
  • By Communication, in 2023 the vehicle-to-Infrastructure communication segment has captured highest revenue share of 52%. 
  • By System, the tethered segment has registered revenue share of 41% in the year of 2023.
  • By Application, the telematics application segment has reported highest revenue share of 41% in 2023. 

Automotive Internet of Things (IoT) Market Growth Factors

  • Increased Demand for Connected Vehicles: Consumers are seeking advanced connectivity features such as real-time navigation, infotainment systems, and over-the-air updates, driving the adoption of IoT technologies in vehicles.
  • Advancements in 5G Technology: The deployment of 5G networks enhances data transmission speeds and connectivity reliability, enabling more sophisticated IoT applications in automotive environments, including vehicle-to-everything (V2X) communication.
  • Growth in Autonomous Vehicles: The development of autonomous driving technology relies heavily on IoT systems for real-time data processing, sensor integration, and communication with other vehicles and infrastructure, fueling market growth.
  • Enhanced Safety and Security Features: IoT technologies contribute to improved vehicle safety through advanced driver-assistance systems (ADAS) and real-time monitoring, which help prevent accidents and enhance overall road safety.
  • Government Regulations and Incentives: Supportive government policies and incentives for smart transportation and connected vehicle technologies promote the integration of IoT solutions, accelerating market adoption and innovation in the automotive sector.
  • Rising Adoption of Electric Vehicles (EVs): The growth of the electric vehicle market is driving the need for advanced IoT solutions for energy management, battery monitoring, and efficient vehicle-to-grid communication, contributing to increased demand for automotive IoT technologies.
  • Integration of Artificial Intelligence (AI): AI enhances the capabilities of IoT systems by enabling advanced data analytics, predictive maintenance, and personalized user experiences. The integration of AI with automotive IoT improves vehicle performance and functionality, driving market expansion.
  • Growing Consumer Focus on Personalization: Consumers are increasingly expecting personalized in-car experiences, such as customized infotainment and tailored vehicle settings. IoT technologies enable these personalized features, boosting demand for connected vehicle solutions.
  • Expansion of Smart Infrastructure: As smart city initiatives grow, there is an opportunity for automotive IoT solutions to integrate with smart infrastructure, such as intelligent traffic management systems and connected roadways, enhancing overall transportation efficiency and safety.
  • Development of New Business Models: IoT technologies enable innovative business models such as vehicle-to-everything (V2X) services, subscription-based features, and data-driven monetization strategies. These models offer opportunities for new revenue streams and market differentiation in the automotive sector.

Report Scope

Area of Focus Details
Market Size in 2024 USD 195.19 Billion
Market Growth Rate CAGR of 18.09% from 2024 to 2033.
Market Size by 2033 USD 872.14 Billion
Largest Market North America
Fastest Growing Market Asia Pacific
Segment Coverage By Application, Component, Communication, Vehicle Type, System and Regions

Automotive Internet of Things (IoT) Market Dynamics

Drivers

Enhanced User Experience Expectations:

  • Consumers increasingly demand advanced in-car experiences, such as seamless connectivity, voice recognition, and personalized settings. This growing expectation drives the adoption of IoT technologies in vehicles to provide more sophisticated, user-friendly interfaces and functionalities.

Integration of Blockchain Technology:

  • Blockchain technology is gaining traction in the automotive IoT sector for enhancing data security, ensuring transparency in vehicle history, and managing decentralized data exchanges. This integration addresses concerns about data privacy and integrity, fostering trust and accelerating IoT adoption in automotive applications.

Restraints

High Implementation Costs:

  • The initial investment required for integrating advanced IoT technologies into vehicles, including sensors, hardware, and software, can be substantial. These high costs can be a barrier for both automotive manufacturers and consumers, slowing down widespread adoption.

Data Privacy and Security Concerns:

  • The increased connectivity of vehicles raises significant concerns about data privacy and cybersecurity. Ensuring the protection of sensitive information and defending against potential cyber threats can be challenging, creating reluctance among consumers and industry stakeholders to fully embrace IoT solutions.

Opportunities

Integration with Smart City Initiatives:

  • The development of smart cities presents opportunities for automotive IoT to integrate with urban infrastructure, such as intelligent traffic management systems and connected parking solutions. This integration can enhance transportation efficiency, reduce congestion, and improve overall urban mobility.

Expansion into Emerging Markets:

  • Emerging markets with growing automotive industries, such as India, Southeast Asia, and Africa, represent significant opportunities for IoT adoption. As these regions develop infrastructure and experience rising consumer demand for advanced vehicle technologies, there is potential for substantial growth in automotive IoT applications.

Challenges

Interoperability Issues:

  • The automotive IoT ecosystem consists of various devices, systems, and platforms from different manufacturers. Ensuring seamless interoperability among these diverse components can be complex, potentially leading to integration difficulties and inconsistent user experiences.

Regulatory and Compliance Hurdles:

  • The automotive IoT market faces evolving regulatory standards and compliance requirements related to data security, safety, and environmental impact. Navigating these regulations and meeting compliance standards can be challenging and costly, potentially slowing down innovation and market entry.

Automotive Internet of Things (IoT) Market Segmental Analysis

Application Analysis

Vehicle-to-Everything (V2X) Communication: V2X communication enables vehicles to interact with each other, infrastructure, and pedestrians to enhance safety and traffic efficiency. Growth in smart cities and advanced traffic management systems is driving V2X adoption. Innovations in 5G technology are improving data transfer speeds and connectivity, enabling more reliable and real-time communication between vehicles and their environment. The V2X communication Segment has recorded market share of 19% in 2023.

Advanced Driver Assistance Systems (ADAS): ADAS uses IoT technologies to assist drivers with features like adaptive cruise control, lane-keeping assistance, and automated parking. Increasing demand for vehicle safety and automation is propelling ADAS development. Integration with AI and machine learning is enhancing the capabilities of these systems, leading to more sophisticated and accurate driver assistance features. This segment has reported market share of 15% in the year of 2023.

Infotainment Systems: Infotainment systems provide entertainment, navigation, and connectivity features within vehicles, integrating IoT technologies for enhanced user experiences. Growing consumer preference for seamless in-car connectivity and multimedia options is driving innovation. Advancements in voice recognition, app integration, and real-time updates are making infotainment systems more interactive and personalized. In 2023, the infotainment systems segment has captured second highest market share of 25%.

Telematics: Telematics involves the use of IoT technology to monitor and manage vehicle performance, diagnostics, and fleet management. Rising interest in fleet optimization and vehicle health monitoring is expanding telematics applications. Enhanced data analytics and real-time diagnostics are improving maintenance, efficiency, and operational control for both individual and commercial vehicles. The telematics segment has confirmed highest market share of 41% in 2023.

Others: This category includes miscellaneous IoT applications in automotive, such as vehicle health monitoring and automated driving systems. Emerging technologies like autonomous driving and advanced sensors are driving innovation. The focus is on developing new applications that enhance vehicle performance, safety, and user convenience, with ongoing research in areas such as predictive maintenance and smart manufacturing.

Component Analysis

Hardware: Hardware in automotive IoT includes sensors, embedded systems, and connectivity modules such as GPS and communication devices. The trend is toward advanced sensors and robust connectivity modules to support real-time data processing and enhanced vehicle features. Innovations include more compact and cost-effective sensors and improved connectivity options like 5G, driving advancements in vehicle safety and automation. The hardware segment has dominated the market in 2023 with the share of 59%.

Software: Software encompasses IoT platforms, data analytics, and cybersecurity solutions used in automotive applications. There is a growing focus on sophisticated software for data management, predictive maintenance, and enhanced security. Advances include AI-driven analytics for better vehicle performance insights and robust cybersecurity measures to protect against cyber threats and ensure data privacy. The software segement has generated market share of 25% in 2023.

Services: Services in automotive IoT include cloud services, consulting, and support related to IoT integration and maintenance. Increased demand for managed services and cloud-based solutions is driving growth. This segment has calculated market share of 16% in the year of 2023. Companies are offering end-to-end solutions that include installation, integration, and ongoing support, as well as analytics services to optimize vehicle operations and improve user experiences. 

Communication Analysis

In-Vehicle Communication: In-vehicle communication involves the exchange of data between various systems and components within a vehicle, such as infotainment systems, ADAS, and engine control units. Increasingly sophisticated in-vehicle networks enable enhanced functionalities like real-time diagnostics, seamless infotainment integration, and advanced driver assistance. The rise of high-speed data buses and centralized computing platforms is driving innovations in this space. The in-vehicle communication segment has produced share of 14% in 2023.

Vehicle-to-Vehicle Communication: Vehicle-to-vehicle (V2V) communication allows vehicles to exchange information directly with one another to enhance safety and coordination on the road. V2V communication is gaining traction due to its potential to reduce accidents and improve traffic flow. Advances in dedicated short-range communications (DSRC) and emerging 5G technologies are enhancing the reliability and range of V2V systems. The vehicle-to-vehicle (V2V) communication segment has garnered market share of 34% in 2023.

Vehicle-to-Infrastructure Communication: Vehicle-to-infrastructure (V2I) communication enables vehicles to interact with road infrastructure, such as traffic lights and signage, to optimize traffic management and safety. V2I communication is growing with the development of smart infrastructure and intelligent transportation systems. The integration of IoT sensors and real-time data analytics is improving traffic efficiency and reducing congestion through enhanced interaction with urban infrastructure. This segment has measured highest 52% market share in 2023.

Vehicle Type Analysis

Passenger Cars: Vehicles designed primarily for personal transportation, including sedans, SUVs, and hatchbacks. Increasing integration of IoT for enhanced connectivity features, such as real-time navigation, infotainment systems, and advanced driver assistance systems (ADAS). There is growing demand for personalized in-car experiences and seamless smartphone integration.

Commercial Vehicles: Vehicles used for business purposes, such as trucks, buses, and delivery vans. Rising use of IoT for fleet management, telematics, and predictive maintenance. Innovations focus on optimizing logistics, improving vehicle efficiency, and enhancing safety through real-time monitoring and data analytics.

Electric Vehicles (EVs): Vehicles powered by electric motors rather than internal combustion engines, including battery electric vehicles (BEVs) and plug-in hybrids (PHEVs). Increased adoption of IoT for battery management, charging infrastructure integration, and vehicle-to-grid communication. IoT enhances the management of energy consumption and supports the growth of smart charging solutions.

Others: Includes specialized and non-traditional vehicles, such as autonomous vehicles, recreational vehicles (RVs), and two-wheelers. Growing use of IoT to support autonomous driving technologies, vehicle-to-everything (V2X) communication, and advanced safety features. This segment is expanding with innovations aimed at improving vehicle performance and enhancing user experiences.

Automotive Internet of Things (IoT) Market Regional Analysis

Why North America is leading in the automotive internet of things (IoT) market?

North America leads in automotive IoT adoption due to high consumer demand for advanced in-car technologies and strong investments in autonomous driving and connected vehicle solutions. North America market size is expected to reach around USD 322.69 billion by 2033 increasing from USD 72.22 billion in 2024 with a CAGR of 19.10%. The region is also a hub for innovation with extensive R&D activities and robust infrastructure supporting IoT integration. U.S market size is estimated to reach around USD 242.02 billion by 2033 increasing from USD 54.17 billion in 2024 with a CAGR of 14%.

Why Asia Pacific is experiencing significant growth in the automotive internet of things (IoT) market?

Rapid urbanization and rising disposable incomes in Asia-Pacific are driving the adoption of IoT technologies in vehicles. Asia Pacific market size is calculated at USD 46.85 billion in 2024 and is projected to grow around USD 209.31 billion by 2033 with a CAGR of 21.60%. The region is witnessing significant growth in connected and electric vehicles, with a strong emphasis on improving transportation efficiency and developing smart infrastructure to support IoT-enabled solutions.

Europe Automotive Internet of Things (IoT) Market Trends

Europe focuses on integrating IoT with sustainable and smart mobility solutions. The region emphasizes regulatory compliance, such as stringent data privacy laws and environmental standards, driving the development of IoT technologies that align with EU regulations and support smart city initiatives. Europe market size is measured at USD 56.61 billion in 2024 and is expected to grow around USD 252.92 billion by 2033 with a CAGR of 19.80%.

LAMEA Automotive Internet of Things (IoT) Market Trends

In LAMEA(Latin America and Middle East & Africa), there is a growing focus on enhancing vehicle safety and efficiency through IoT. Emerging markets are increasingly adopting IoT solutions to improve fleet management and address transportation challenges, while governments are starting to invest in smart infrastructure and connectivity projects. LAMEA market size is forecasted to reach around USD 87.21 billion by 2033 from USD 19.52 billion in 2024.

Global Automotive Internet of Things (IoT) Market Top Companies

  • Tesla, Inc.
  • Ford Motor Company
  • General Motors Company (GM)
  • Toyota Motor Corporation
  • BMW AG
  • Audi AG
  • Nissan Motor Corporation
  • Cisco Systems, Inc.
  • Intel Corporation
  • Qualcomm Incorporated
  • Ericsson AB
  • Harman International Industries, Inc.
  • Continental AG
  • Panasonic Corporation
  • Daimler AG

Aurora Innovation and Nuro Inc. are emerging in the automotive IoT market with innovations in autonomous driving and delivery solutions. Their focus on developing advanced autonomous systems and smart logistics demonstrates significant technological advancements and market entry strategies. Tesla and Qualcomm dominate the market with extensive IoT integration. Tesla leads in connected and autonomous vehicle technologies, while Qualcomm provides critical semiconductor solutions for vehicle connectivity and telematics, driving advancements in in-car infotainment and vehicle-to-everything (V2X) communication.

Recent Developments

  • In 2024, Geespace, a subsidiary of Zhejiang Geely Holding Group, added 11 LEO satellites to its constellation to enhance connected car services. This expansion opens new opportunities for automotive IoT companies in China by improving satellite connectivity and support.
  • In 2023, HARMAN introduced HARMAN Ready on Demand, a software platform offering branded audio value, feature enhancements, and monetization through an easy-to-use app. This industry-first product enables consumers to unlock expanded experiences and future upgrades via in-app purchases throughout the vehicle’s life.
  • In 2023, Reliance Retail, part of Reliance Industries, launched JioMotive, an IoT device for automotive use. This OBD-based real-time car tracker is available for purchase through JioMart, offering consumers advanced vehicle tracking capabilities.
  • In 2023, VinFast and NXP Semiconductors have partnered to advance VinFast’s next-generation electric vehicles. The collaboration focuses on developing smarter, connected EVs using NXP’s processors, semiconductors, and sensors, enhancing innovation in VinFast’s early automotive projects.
  • In 2022, TomTom International will power PTV Truck Navigator G2 with its Navigation SDK, enhancing PTV Group’s professional truck navigation app. This expanded partnership provides up-to-date maps and custom truck routing, making the app available globally for the first time.

Market Segmentation

By Application

  • Vehicle-to-Everything (V2X) Communication
    • Vehicle-to-Vehicle (V2V)
    • Vehicle-to-Infrastructure (V2I)
    • Vehicle-to-Pedestrian (V2P)
  • Advanced Driver Assistance Systems (ADAS)
    • Adaptive Cruise Control
    • Lane Departure Warning
    • Automated Parking
  • Infotainment Systems
    • In-Car Navigation
    • Media and Entertainment
    • Connectivity and Communication
  • Telematics
    • Fleet Management
    • Insurance Telematics
    • Remote Diagnostics
  • Others

By Component

  • Hardware
    • Sensors (e.g., Cameras, Radar, LiDAR)
    • Embedded Systems
    • Connectivity Modules (e.g., GPS, Cellular, Wi-Fi)
  • Software
    • IoT Platforms
    • Data Analytics and Management
    • Cybersecurity Solutions
  • Services
    • Cloud Services
    • Consulting and Integration
    • Maintenance and Support

By Communication

  • In-Vehicle Communication
  • Vehicle-to-Vehicle Communication
  • Vehicle-to-Infrastructure Communication

By Vehicle Type

  • Passenger cars
  • Commercial vehicle
  • Electric Vehicle
  • Others

By System

  • Embedded
  • Tethered
  • Integrated

By Regions 

  • North America
  • APAC
  • Europe
  • LAMEA
...
...

FAQ's

The global automotive internet of things (IoT) market size was valued USD 165.28 billion in 2023 and is anticipated to reach around USD 872.14 billion by 2033.

The global automotive internet of things (IoT) market size is growing at a CAGR of 18.09% during the forecast period 2024 to 2033.

The top companies operating in automotive internet of things (IoT) market are Tesla, Inc., Ford Motor Company, General Motors Company (GM), Toyota Motor Corporation, BMW AG, Audi AG, Nissan Motor Corporation, Cisco Systems, Inc., Intel Corporation and Qualcomm Incorporated.