Connected Car Market Size

Global connected car market size was valued at USD 109.35 Billion in 2023 and is expected to grow from USD 124.89 Billion in 2024 to USD 395.79 Billion by 2032, growing at a CAGR of 15.5% in the forecast period (2025-2032).

The global connected car market is expanding rapidly, driven by growth in automotive technology, IoT integration, and consumer desire for more immersive driving experience. Connected cars have features like real-time navigation, remote diagnostics, infotainment, and improved safety through vehicle-to-everything (V2X) communication. Rising interest in autonomous vehicles and electric vehicles also drives market expansion. Overall, the market is eagerly awaiting increased growth, supported by collaborative efforts between automakers, technology firms, and telecom players to develop innovative connected solutions.

5G network deployment is a major growth driver of the connected car market. As low-latency, high-speed data transfer, 5G allows for real-time communication between vehicles, infrastructure, and cloud services to enable applications such as autonomous driving, enhanced infotainment, and vehicle-to-everything (V2X) communication. With countries investing more and more in deployments of 5G, particularly in regions such as North America, Europe, and Asia-Pacific, the connected car market has tremendous scope for growth in an exponential manner. The higher bandwidth and security of 5G are also facilitating more advanced data exchanges, with connected cars able to be made smarter and more sensitive to changing traffic patterns and safety requirements.

The security and data privacy issues are becoming major constraints in the worldwide connected car industry. With more and more cars getting connected and data-centric, they collect a tremendous volume of data, from automotive performance to personal information. One such issue lies in the volume and diversity of data that is being collected. As per a SkyQuest report, newer cars collect data that is more than most other personal devices, including smartphones. These include personal information like contacts, call logs, and media playlists of linked smartphones. The use of vehicles as mobile data repositories is of significant concern to users in terms of privacy when this information is passed on to third-party services or accessed by unauthorized parties. Users are increasingly concerned about their personal information being collected, utilized, and protected in these cars.

How AI is Transforming the Connected Car Market?

The growing use of AI and machine learning is transforming the connected car sector. These technologies are improving adaptive cruise control, driver-assistance features, and predictive maintenance, enabling vehicles to analyze big data in real-time and take autonomous decisions. AI-based systems also make it possible to deliver better user experiences through voice recognition and personalized infotainment. Also, machine learning algorithms are being used to improve car safety by forecasting likely risks and tuning vehicle performance according to the behavior of the driver, further cementing AI as an enabler in the market.