Internet of Vehicles Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Communication Type (Vehicle-to-Vehicle (V2V), Vehicle-to-Infrastructure (V2I), Vehicle-to-Pedestrian (V2P), Vehicle-to-Network (V2N)), By Application (Fleet Management, Autonomous Driving, Traffic Management, Infotainment & Connected Services, Predictive Maintenance), By Vehicle Type (Passenger Vehicles, Commercial Vehicles, Two-Wheelers) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2025-2033

Internet of Vehicles Market Size

The global Internet of Vehicles market size was worth USD 152 billion in 2024 and is estimated to reach an expected value of USD 755.36 billion by 2033, growing at a CAGR of 19.5% during the forecast period (2025-2033).

The Internet of Vehicles refers to a network of connected vehicles, devices, and infrastructure that enables real-time communication and data sharing. IoV integrates cars with the internet and advanced technologies like IoT, cloud computing, and AI to improve traffic management, enhance safety, and offer personalized services to drivers and passengers. It supports vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), and vehicle-to-everything (V2X) communication, facilitating smart transportation systems and autonomous driving solutions.

The global market is slowly picking up as companies and auto manufacturers coordinate with technology leaders to make transportation smarter and more connected. The growth of Advanced Driver Assistance Systems (ADAS), Vehicle-to-Everything (V2X) communication, and the rising demand for real-time traffic management are fueling this growth. The European Commission suggests that IoV forms a core part of the more comprehensive digital transformation in mobility, helping cut congestion while enhancing road safety. IoV will transform how transportation systems function because it promotes seamless data exchange between vehicles, infrastructure, and networks.

The U.S. Department of Transportation underlines that vehicle connectivity is an area that would facilitate the efficiency and safety of traffic flow and must be given paramount importance in developing future mobility solutions. Governments are also pushing hard for the integration of IoV technology worldwide. For instance, China's MIIT said that over 30 cities have initiated massive-scale pilot programs for IoV to enhance smart transportation. Analysts believe that the market will grow steadily with more investments in 5G networks and smart infrastructure.

The IoV market is highly susceptible to vehicle sales in the global top markets in China, the U.S., Japan, India, and Germany, with China representing the most significant selling volumes, and then the United States and Japan, where connected vehicle technologies will be driven into adoption by big automotive players of the world. With increasing EV adoption, India's rapidly growing automotive sector adds momentum to IoV solutions, while Germany's premium automotive brands further accelerate demand for advanced IoV systems.

The figure below illustrates the growth dynamics of the market, presenting year-on-year production data and emphasizing the substantial increase in market size from 52.48 million units in 2022 to 73.6 million units in 2023, reflecting a notable surge in the adoption of connected vehicle technologies.

Source: Straits Research

Exclusive Market Trend

Growing adoption of vehicle-to-everything (V2X) communication

With growing popularity in the automobile world, Vehicle-to-Everything (V2X) communication is taking over. The technology allows vehicles to speak to other cars, road infrastructure, and pedestrians. By sharing information such as speed, location, and traffic signals, V2X helps prevent accidents and improves traffic flow. As this technology spreads more and more in vehicles and cities, our roads are expected to become safer and more efficient.

• For instance, The U.S. Department of Transportation highlights that V2X technology can save lives by enabling wireless communications among vehicles, roadside infrastructure, and vulnerable road users equipped with mobile devices.

Furthermore, IoV has resorted to using more AI and edge computing to make real-time decisions. The amount of data is immense because many sensors in a vehicle produce large volumes of information. However, the fact that it gets processed near its source due to edge computing helps minimize the latency caused. In all this, there is the aspect of speed to changing road conditions about vehicle performance and safety.

Global Internet of Vehicles Market Growth Factors

Rising demand for connected vehicles and smart mobility solutions

There is a higher demand for automobiles connected to the internet and other devices. The cars have in-built features, such as real-time traffic updates, entertainment, and advanced navigation. With increased urbanization and worsening traffic, smart mobility solutions that make transport efficient and fun are in greater demand.

• For instance, the European Commission has been actively promoting the adoption of connected vehicle technologies to improve transportation efficiency and safety across member states.

In addition, governments worldwide encourage the use of the Internet of Vehicles. They seek to provide rules and incentives for safer and more efficient transport systems. Such efforts will reduce the number of accidents caused by traffic, decrease emissions, and ensure efficient traffic flow management. For instance, The U.S. Department of Transportation emphasizes that vehicle connectivity is crucial in improving traffic efficiency and reducing accidents, making it a priority for future mobility solutions.

Market Restraint

High cybersecurity risks and data privacy concerns

The rise of connected vehicles brings significant cybersecurity and data privacy risks. As cars become more interconnected, they offer multiple entry points for hackers to access critical systems, potentially endangering passengers and compromising personal data. Sensitive information such as real-time location, driving habits, and individual preferences can be exploited if not adequately protected, discouraging some consumers from adopting IoV technologies.

• For instance, the European Union Agency for Cybersecurity (ENISA) has highlighted potential risks in connected vehicles, calling for robust security measures to protect data and ensure user safety. These concerns have led automakers to prioritize cybersecurity solutions and collaborate with tech firms to secure IoV systems.

Market Opportunity

Expansion of 5G infrastructure enabling faster and more reliable vehicle connectivity

The expansion of 5G networks is a game-changer for the Internet of Vehicles, providing faster, more reliable communication between vehicles, infrastructure, and other devices. With high-speed and low-latency connectivity, 5G enables real-time data exchange essential for advanced driver assistance systems (ADAS), better traffic management, and autonomous vehicle technologies. This network evolution paves the way for safer, more efficient transportation systems.

• For example, in October 2024, the 5G Automotive Association (5GAA) demonstrated advancements in Cellular Vehicle-to-Everything (C-V2X) technology, which aims to achieve “Vision Zero”—eliminating traffic fatalities for all road users. These innovations showcase the potential of 5G to revolutionize vehicle connectivity and safety.

As 5G continues to expand globally, the global Internet of Vehicles market is expected to experience rapid growth, with opportunities for automakers, telecom providers, and tech companies to collaborate on building smarter, more connected transportation ecosystems.

Regional Insights

North America: Dominant region with a 35% market share

North America accounts for the most significant portion of the global Internet of Vehicles market. This region has rapidly embraced vehicle-related connected technologies with the support of a strong regulatory framework and investments in smart transportation infrastructure. Government policy support for V2X communication and near-universal 5G rollout are accelerating IoV adoption in the region. As regards the U.S. and Canadian markets, American and Canadian automotive companies are more than eager to integrate IoV solutions to raise road safety and reduce congestion for better autonomous mobility. The regions also have increased consumer demand, along with their well-developed digital ecosystem supporting cloud-based solutions for mobility services.

Asia-Pacific: Fastest growth due to innovative city initiatives

Asia-Pacific is witnessing the highest growth in the global Internet of Vehicles market due to vast smart city projects and vehicle connectivity investments. China, Japan, and South Korea lead the region, further propelled by government initiatives supporting IoV adoption in autonomous driving, intelligent traffic management, and vehicle-to-infrastructure (V2I) communication. The rise of electric and hybrid vehicles in the region also supports the expansion of IoV, as advanced connectivity is a critical factor for energy efficiency and fleet optimization. Along with 5G infrastructure, increasing automobile production will make the Asia-Pacific region a prime driver in IoV growth in the coming years.

Countries Insights

• China: China leads the market, driven by the rapid adoption of electric vehicles (EV) and the growth of smart cities. The country’s aggressive push toward electrification, supported by government policies and infrastructure investments, makes it a global leader. Major automakers such as BYD, NIO, and Geely are at the forefront of integrating IoV technologies like autonomous driving and real-time data sharing into their vehicles. Smart city projects like Shenzhen and Guangzhou further accelerate IoV adoption by enabling connected traffic systems and seamless communication between vehicles and infrastructure.
• United States: The U.S. market thrives on the ongoing transition to electric vehicles and autonomous driving. Companies such as Tesla, Ford, and General Motors are pioneers in integrating IoV systems, focusing on safety, infotainment, and autonomous capabilities. The U.S. government supports this growth through infrastructure investments and initiatives like the Bipartisan Infrastructure Law, which funds smart transportation projects and EV charging networks.
• Germany: Germany’s automotive industry, led by Volkswagen, BMW, and Daimler, is a key player in the global IoV market, with a strong focus on sustainability and autonomous driving. The country’s push toward reducing carbon emissions and adopting electric mobility aligns with IoV growth. German automakers invest heavily in connected vehicle solutions, enabling real-time diagnostics, predictive maintenance, and enhanced driving safety.
• Japan: Japan’s market is driven by its leading automotive brands, Toyota and Nissan, which are known for their focus on advanced safety features and smart infrastructure integration. The country is a pioneer in adopting autonomous and connected vehicle technologies, with ongoing efforts to build intelligent transportation systems (ITS) that enhance traffic management and reduce accidents. For example, Toyota’s Mobility Teammate Concept aims to create autonomous vehicles that work harmoniously with drivers and road infrastructure.
• South Korea: South Korea’s market benefits from innovations by Hyundai and Kia, supported by government policies promoting smart cities and 5G infrastructure. The rollout of high-speed 5G networks enhances vehicle connectivity, enabling real-time communication between vehicles and infrastructure. For instance, Hyundai’s Blue Link system offers remote start, vehicle diagnostics, and AI-powered driving assistance, boosting IoV adoption.
• India: India’s market is growing due to increasing interest in EVs and the expansion of its automotive industry. Companies like Tata Motors and Maruti Suzuki are leading the integration of IoV solutions, focusing on safety, navigation, and infotainment systems. Government initiatives such as FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) and smart city projects further drive growth. For instance, Tata Motors’ Nexon EV has connected vehicle technology that provides real-time vehicle tracking and remote diagnostics.
• United Kingdom: The UK’s market is expanding rapidly as brands such as Jaguar Land Rover (JLR) focus on electric and connected vehicles. Government policies promoting green technology and investments in smart infrastructure further boost growth. The Future of Transport initiative supports IoV development, particularly in autonomous driving and vehicle connectivity. For example, Jaguar Land Rover’s PIVI Pro system offers advanced infotainment, navigation, and over-the-air updates, enhancing connectivity and user experience.
• Brazil: In Brazil, the market is growing steadily as Fiat, Chevrolet, and other automakers focus on adopting IoV technologies to enhance vehicle safety and infotainment systems. Government incentives for EVs and smart mobility projects significantly boost the market. For instance, Fiat’s Pulse SUV offers IoV features such as integrated navigation, voice command, and smartphone connectivity, meeting the growing demand for smart vehicle solutions.

Segmentation Analysis

By Component

The hardware segment leads in the global market due to the critical role of physical components in enabling connectivity and communication. Sensors, communication modules, GPS, and processors form the backbone of IoV by collecting and transmitting data in real time. Due to more connectivity and autonomy in vehicles, hardware demand increases exponentially. V2X communication, AI-driven analytics, and real-time monitoring have fueled the rise of reliable and sophisticated hardware solutions. Automakers and technology providers continually innovate in this space to maximize vehicle safety, efficiency, and performance. Therefore, hardware constitutes the largest share of market dominance.

By Communication Type

Vehicle-to-network (V2N) technology leads the global market, as this technology is increasingly in demand because of the necessity of seamless, real-time data exchange. Cloud connectivity allows vehicles to access navigation updates, road condition alerts, and infotainment services. V2N helps in over-the-air (OTA) software updates, essential for ensuring that vehicles do not need manual intervention to get updated. With the deployment of 5G networks, V2N connectivity is becoming more efficient, offering lower latency and high-speed communication. The ability to integrate with smart city infrastructure further boosts its adoption as governments and enterprises push for improved mobility solutions.

By Application

The autonomous driving segment holds the largest market share because of the increasing focus on self-driving technology. Automakers and tech firms invest heavily in AI, machine learning, and sensor fusion to make autonomous vehicles a reality. IoV enables real-time communication between self-driving cars and their surroundings, improving safety and efficiency. With Advanced Driver Assistance Systems (ADAS), more vehicles are integrating semi-autonomous features at an ever-faster speed, propelling the world toward full autonomy. This need for safer, more innovative, and more efficient transportation solutions continues to fuel this segment's dominance.

By Vehicle Type

Passenger vehicles are leading the market as the demand for smart and connected car features is ever-increasing. Infotainment systems, real-time navigation, and AI-driven safety enhancements have become key factors in adopting such technologies. Integration of V2X communication, electric vehicle (EV) advancement, and autonomous driving technologies strengthen the position of passenger vehicles within the IoV ecosystem. Automakers have focused on improvement in user experience, efficiency, and safety with the development of connected passenger vehicles. This aspect is still more prominent in the IoV penetration of urban mobility and ride-sharing services.

Company Market Share

Key market players are investing in advanced Internet of Vehicles technologies and pursuing strategies such as collaborations, acquisitions, and partnerships to enhance their products and expand their market presence.

BYD: An Emerging Player in the Internet of Vehicles Market

BYD is solidifying its presence in the Internet of Vehicles market with its advanced electric vehicles and innovative connectivity solutions, meeting the growing demand for smart, eco-friendly transportation systems.

Recent Developments:

• In August 2024, BYD partnered with Huawei to integrate its advanced autonomous driving system, Qiankun, in the Fangchengbao EVs, aiming to enhance premium model offerings and smart driving features.

Recent Developments

• January 2025- Tesla faced a new investigation by U.S. regulators into its Full Self-Driving system after reports of crashes involving its "Smart Summon" feature, affecting 2.6 million vehicles.
• November 2024- BMW Group advanced automated driving in production with CE certification, launching series operations in Dingolfing and expanding across its network. This innovation optimizes logistics and production efficiency, setting a new industry benchmark.

Analyst Opinion

As per our analyst, the global Internet of Vehicles market is expected to experience significant growth with the increasing shift of the automotive industry toward electrification, automation, and connectivity. AI, 5G networks, and smart city infrastructure will fuel the demand for connected vehicle solutions that enhance real-time data exchange and improve safety, efficiency, and user experience.

With automakers pushing autonomous driving, electric vehicles, and government initiatives supporting digital infrastructure, the market is likely to expand rapidly. However, challenges like cybersecurity concerns, interoperability, and regulatory hurdles remain, but the potential for transformative changes in global mobility outweighs these obstacles, making IoV a critical sector for future innovation.