"Market Intelligence for High-Geared Performance"
The global internet of vehicles market size was USD 85.12 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the internet of vehicles witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 10.72% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 95.62 billion in 2021 to USD 369.60 billion in 2028 at a CAGR of 21.3% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Internet of Vehicles (IoV) combines three networks: a vehicular mobile internet, an intra-vehicle network, and an inter-vehicle network. Based on the concept of integrating these networks into one, IoV is defined as a wide-ranging distributed system for information exchange & wireless communication between vehicle2X (where X includes internet, roads, people, and vehicles, among others). It uses standard data interaction & communication protocols. It is an integrated system that provides intelligent vehicle control, intelligent dynamic information service, and intelligent traffic management.
COVID-19 has Influenced Telecommunications and Connected Infrastructure Policy
Despite the pandemic's negative impact, especially in terms of funding for autonomous driving R&D, testing efforts have continued, and projections are positive. With demand for Wi-Fi increasing during the pandemic, significant regulatory changes are being implemented, especially in the U.S. and China. For instance, in November 2020, the U.S. Federal Communications Commission (FCC) announced that it would transition away from Dedicated Short-range Communications (DSRC) to Cellular V2X (C-V2X) protocols for automotive communications.
The new policy is part of the unanimous measure adopted in November to reassign a substantial share of the 5.9 GHz band to new vehicular communications. Furthermore, C-V2X is the newly designated standard for these vehicular communications. The policy change has received unanimous support from major automakers, broadband providers, and wireless carriers. This is attributed to the exponential applications supported by C-V2X with its deployment over a 5G network, particularly allowing for IoV to process and react to data in nanoseconds.
Similarly, in 2020, in China, dedicated bandwidth has been assigned for the usage of C-V2X on the 5.9 GHz spectrum. Furthermore, the country aims to implement the technology across 90% of the key roadways and municipalities during the forecast period. Implementing C-V2X will require substantial time; however, adopting such policies will incentivize and provide assurance for key players to invest in an IoV network. Hence, regulatory shift owing to COVID-19 will influence the growth of the market.
Request a Free sample to learn more about this report.
Increasing Adoption of Cloud-based Architecture over the Forecast Period is a Vital Trend
With the advancement of the 5G network, manufacturers aim to shift to a cloud-based electrical/electronic (E/E) vehicle architecture. Processor-intensive tasks, such as road condition observation and image processing can be shifted to the cloud. It enhances processing capabilities and improves operational efficiency, among other benefits that are necessary to fulfill future mobility requirements. For instance, in 2020, Qualcomm introduced the new Car-to-cloud service that can support over-the-air vehicle updates and on-demand services & features, among other functions. Hence, the increasing penetration of cloud-based architecture in automobiles is a positive trend for the growth of the market.
Safety and Economic Savings to Drive the Growth of the Market
In 2019, Intel published a study regarding the Internet of Things (IoT) and Automotive & Transportation Policy Principles. It revealed that more than 90 percent of crashes in the U.S. are caused by human error. Connected autonomous vehicles operating in an IoT system that can, in some circumstances, navigate without human input can drastically reduce crashes.
For instance, in the U.S., 1,100 traffic deaths can be averted, and around USD 38 billion can be saved every year if only 10% of vehicles were autonomous. Similarly, USD 447 billion can be saved and 21,700 traffic deaths will be averted if 90% of vehicles were autonomous. Hence, these factors will drive the growth of the market during the forecast period.
Implementation in Traffic Control to Augment Internet of Vehicles Market Growth
Traffic management is a key revenue source for the internet of vehicles, with applications ranging from smart traffic lights that can optimize traffic flow by analyzing the current road situation and adaptable lighting systems that account for the weather conditions. Furthermore, drivers can be guided to vacant spots in parking spaces using sensors and beacons, and rescue services can be automatically alerted when drivers are involved in an accident via CCTV cameras that provide real-time information. Hence, the increasing application of IoV in traffic & parking management will fuel the growth of the market.
Security and Privacy Concerns to Restrain Growth
The internet of vehicles creates a network of connected devices and integrates different services, technologies, and communication protocols, developing information security issues. It makes the system vulnerable to various types of malicious interference, such as distributed denial-of-service (DDoS) attacks. They can be targeted at multiple levels, such as the vehicle itself or the communication network transferring the data. Vehicle parts, such as the steering wheel, brakes, GPS, accelerator, and alarms can be accessed remotely in IoV, and a successful breach or hack can lead to fatalities.
Hence, these issues will restrain the consumers’ adoption of the internet of vehicles.
To know how our report can help streamline your business, Speak to Analyst
Service Segment Expected to Dominate the Market Owing to Recurring Revenue Stream
By the component type, the market is segmented into hardware, software, and service. The service segment held the largest share of the market in 2020. The service model provides recurring revenues and more importantly, a long-term relationship with customers. For instance, the Car-Net service offered by Volkswagen provides customers with navigation tools, security features, and maintenance assistance, among other features, for a fee of USD 200/year or USD 18/month. Hence, these factors are attributed to the dominance of this segment.
The software segment is expected to exhibit a higher CAGR during the forecast period. Factors, such as increasing numbers of automakers developing their own proprietary software platforms to completely own customer data are fueling the growth of this segment.
Wi-Fi Segment Dominated in 2020 Fueled by Extremely Low Transfer Failure Rate
Based on networking technology, the market is segmented into Wi-Fi, Bluetooth, cellular, and others. The Wi-Fi segment held the largest share of the market in 2020. Wi-Fi offers successful data exchange for low, as well as high frequency of communications with a failure rate of less than 1%. Additionally, in-vehicle Wi-Fi enables on-the-go connectivity via mobile hot-spots and hence, doesn’t need to rely on cellular services. These factors are attributed to the growth of this segment.
The cellular segment is anticipated to show exponential growth during the forecast period. This is attributed to the increasing development of 5G-based internet of vehicles, which offers reliability, extremely high bandwidth & data transfer rate, and very low latency compared to the existing communication networks.
V2V Segment Held the Largest Share of the Market Owing to Necessity in Self-driving Operation
Based on the communication type, this market is segmented into vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), and others. The V2V segment dominated the market in 2020. V2V provides low delay time and reliable exchange of information, such as situational awareness messages and map data. Furthermore, V2V is a complementary technology expected to support and enhance the operation of autonomous vehicles. Hence, these factors will fuel the dominance of this segment during the forecast period.
The V2I segment is expected to grow at a faster pace during the forecast period. The increasing implementation in traffic management systems where it can be used on high-traffic highways to optimize vehicle flow and maximize fuel economy is attributed to driving the growth of this segment.
North America Internet of Vehicles Market Size, 2020 (USD Billion)
To get more information on the regional analysis of this market, Request a Free sample
North America held the largest internet of vehicles market share of the global market (with the U.S. accounting for the majority of the market share) and stood at USD 31.66 billion in 2020. According to the National Highway Traffic Safety Administration (NHTSA), the average commuter in the U.S. spends thirty-eight hours annually stuck in traffic. It collectively leads to 5.5 billion extra hours of travel and the purchase of an additional 2.9 billion gallons of fuel. This wasted fuel and time cost the U.S. economy around US$ 121 billion every year. The internet of vehicles network with improved traffic management and self-driving vehicles can enable more efficiency and productivity. These factors will propel the growth of the market in this region.
Asia Pacific is expected to show exponential growth in the market during the forecast period. Supportive regulatory measures to support the IoV architecture testing and increase engineering capacity are being implemented in Japan. Additionally, owing to the early introduction, China is the global leader in 5G networking in terms of both rate of adoption and implementation. Furthermore, the country is also rapidly evolving on new standards and federal-level policies for IoV technology. Hence, these factors are attributed to the rapid growth of the market in this region.
Europe is also expected to show significant growth in the market with major expenditure on the internet of vehicles domain driven by vehicle security, infotainment, and fleet management. Furthermore, investment priorities will be dedicated to reducing road risks and increasing situational awareness, focusing on V2I and V2V solutions.
Owing to its Broad Product Portfolio, Volkswagen is one of the Leading Players in the Market
Volkswagen (VW) is one of the leading players in the market attributed to the popularity of its IoV services, such as Car-Net and Volkswagen Connect. It is also an active member of the 5G Automotive Association, which is involved in accelerating the development of cellular V2X (C-V2X) technology and improving system standardization, among other functions. Recently, in August 2020, Volkswagen announced that it selected CCC Information Services Inc. as the exclusive provider of insurance telematics services for the newest generation of VW Car-Net.
VW Car-Net will leverage the newly released CCC VIN Connect by signing an agreement with CCC, which applies driving behavior data at the point-of-quote, making it quick and convenient for eligible consumers to connect with potential insurance discounts. Furthermore, the Car-Net service included in most of the 2020 & 2021 models contains significant changes with core services offered for free to users for the first five years of ownership. Hence, continued focus on the development of its service offerings and active engagement in productive partnerships will fuel VW’s share in the market.
An Infographic Representation of Internet of Vehicles Market
To get information on various segments, share your queries with us
The global internet of vehicles market research report covers a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report delivers an in-depth market analysis of several factors that have contributed to its growth over recent years.
Value (USD Billion)
By Networking Technology
By Communication Type
Fortune Business Insights says that the global internet of vehicles market size was USD 85.12 billion in 2020 and is projected to reach USD 369.60 billion by 2028.
In 2020, the North American internet of vehicles market value stood at USD 31.66 billion.
Registering a CAGR of 21.3%, the internet of vehicles market will exhibit good growth in the forecast period (2021-2028).
The vehicle-to-vehicle segment held the largest share of the market in 2020.
The increasing adoption of IoT in traffic monitoring & advancement of connected car technology is the key factor driving the growth of the market.
NXP Semiconductors, Volkswagen, and Apple Inc. are the major players in the global market.
North America held the largest share in the market in 2020.
Safety & economic savings and other benefits, such as fleet management, tracking, and maximizing fuel economy are expected to drive their adoption during the forecast period.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry