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Connected Cars Market Value Expansion And Long-Term Growth Outlook
The connected cars market has seen substantial expansion in recent years. It is anticipated to increase from $105.67 billion in 2025 to $121.23 billion in 2026, achieving a compound annual growth rate (CAGR) of 14.7%. The market’s past growth was driven by factors such as infotainment system adoption, smartphone integration demand, growth of vehicle sensors, telematics expansion, and automotive digitization.
The connected cars market is anticipated to experience substantial growth over the next few years, with projections indicating it will reach $214.42 billion by 2030, achieving a compound annual growth rate (CAGR) of 15.3%. This expansion during the forecast period is primarily driven by developments like the autonomous vehicle roadmap, evolving smart mobility ecosystems, the rise of software-defined vehicles, the growing need for electric vehicle connectivity, and the proliferation of data-driven mobility services. Key trends expected to shape this period include the increased adoption of embedded connectivity platforms, wider integration of ADAS, a growing demand for real-time vehicle diagnostics, the emergence of in-car digital services, and the implementation of V2X communication.
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Connected Cars Market Expansion Drivers: What Is Shaping Future Growth?
The rising number of autonomous vehicles is projected to stimulate the growth of the connected cars market in the future. Autonomous vehicles, frequently referred to as self-driving or driverless cars, are automobiles equipped with sophisticated sensors, artificial intelligence (AI) systems, and other technologies that enable them to operate and navigate without needing direct human control. Connected cars form an indispensable basis for the advancement and operation of autonomous vehicles, as they facilitate data exchange, improve navigation, enhance safety, and provide crucial support and infrastructure for self-driving cars to function effectively and safely on the road. For instance, in 2023, according to National Academies Press, a US-based government press, self-driving vehicles are fast approaching commercialization in markets across the world and by 2035, 40% of new cars in the UK could have self-driving capabilities. Therefore, the increase in autonomous vehicles is a key driver for the connected cars market.
Connected Cars Market Segment Outlook: Which Categories Are Expanding The Fastest?
The connected cars market covered in this report is segmented –
1) By Product Type: Embedded, Tethered, Integrated
2) By Application: Navigation, Infotainment, Telematics, Combination
3) By Services: Driver Assistance, Safety and Well-Being, Entertainment, Vehicle Management, Mobility Management, Other Services
Subsegments:
1) By Embedded: OEM Embedded Systems, Aftermarket Embedded Systems
2) By Tethered: Smartphone Tethering, Mobile Hotspot Tethering
3) By Integrated: Infotainment Systems, Advanced Driver-Assistance Systems (ADAS), Vehicle-to-Everything (V2X) Communication
Connected Cars Market Strategic Trends: What Is Defining The Next Phase Of Growth?
Major companies operating in the connected cars market are focusing on developing technological advancements, such as comprehensive digital vehicle profiles, to enhance vehicle data transparency, facilitate ownership verification, and improve lifecycle management. Digital vehicle profiles are secure, centralized records that store a car’s complete history, including manufacturing details, maintenance records, accident history, and ownership transfers. For instance, in May 2025, Hyundai India, an India-based automotive manufacturer, launched a vehicle digital passport for its customers. The digital passport aims to improve vehicle data accessibility, ensure transparency in pre-owned vehicle transactions, enhance aftersales service efficiency, and foster trust between manufacturers, dealers, and owners, thereby driving innovation and digital adoption in the automotive sector.
Connected Cars Market Key Companies And Competitive Benchmarking
Major companies operating in the connected cars market report include Volkswagen, Toyota Motor Corporation, General Motors, Daimler AG, BMW Group, Ford Motor Company, Honda Motor Co Ltd, Hyundai Motor Group, Tesla, Renault, Tata Motors Limited, Mahindra and Mahindra Ltd., NIO Inc., XPeng Inc., Geely Automobile Holdings Limited, Nissan Motor Co., Ltd., Mitsubishi Motor Corporation, Audi AG, Fiat Chrysler Automobiles, Mercedes-Benz, SAIC Motor, Dongfeng, FAW, Changan Automobile, Beijing Automotive Group, Brilliance Automotive, Guangzhou Automobile Group, Chery Automobile, Jianghuai Automobile Group (JAC), Stellantis, Jaguar Land Rover, Suzuki Auto South Africa, GAZ Group, Kamaz
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Connected Cars Market Largest Region By Revenue And Market Share
Asia-Pacific was the largest region in the connected cars market share in 2025. Western Europe was the second largest region in the global connected cars market. The regions covered in the connected cars market report include Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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Wasay has over a decade of experience in market research, data modelling, and analytics, with prior experience at GlobalData and Decision Tree Consulting Services. At The Business Research Company , he leads research operations across syndicated studies, customized consulting engagements, and the Global Market Model platform. His professional experience includes supporting organizations such as Boston Consulting Group, KPMG, and Ernst & Young. Wasay holds a degree in Electronics and Communications Engineering, postgraduate management qualifications from International Management Institute Belgium and Indian School of Business and Entrepreneurship, and completed the Integrated Program in Business Analytics from Indian Institute of Management Indore.
