IoT in Automotive Market is expected to generate a revenue of USD 374.72 Billion by 2031, Globally, at 26% CAGR: Verified Market Research®

The IoT in Automotive Market is expanding due to increasing demand for connected cars, advanced safety systems, and smart mobility solutions. Market growth is driven by rising adoption of telematics, V2X communication, and predictive maintenance technologies. However, challenges such as data security concerns, high integration costs, and regulatory complexities act as restraints, impacting the pace of large-scale adoption across global markets.

LEWES, Del., Sept. 29, 2025 /PRNewswire/ -- The Global IoT in Automotive Market Size is projected to grow at a CAGR of 26% from 2024 to 2031, according to a new report published by Verified Market Research®. The report reveals that the market was valued at USD 68.93 Billion in 2024 and is expected to reach USD 374.72 Billion by the end of the forecast period.

The IoT in Automotive Market is set to experience strong growth as automakers embrace digital transformation. With rising connectivity, autonomous driving initiatives, and consumer demand for enhanced in-car experiences, IoT integration is reshaping vehicle design, safety, and mobility services worldwide.

For a detailed analysis of industry trends and growth drivers, explore the full IoT in Automotive Market.

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Global IoT in Automotive Market Overview

Market Driver

1. Rising Demand for Connected and Autonomous Vehicles

The growing appetite for connected and autonomous cars is driving rapid adoption of IoT technologies in the automotive industry. Automakers are under increasing pressure to deliver smarter, safer, and more convenient mobility solutions.

• IoT-based solutions such as telematics, infotainment, and Vehicle-to-Everything (V2X) communication are being widely deployed to meet consumer expectations.
• Governments are supporting autonomous vehicle initiatives, creating an environment that accelerates IoT adoption in automotive design and development.
• Consumer demand for seamless connectivity, real-time navigation, and digital integration is transforming IoT from an option into a standard requirement.
• This creates significant transactional opportunities for automakers, IoT providers, and technology vendors, making connected mobility a key growth driver of the market.

2. Increasing Focus on Advanced Safety and Predictive Maintenance

Safety and reliability remain top priorities for both automakers and customers, positioning IoT as a crucial enabler of automotive safety systems. Predictive maintenance is also transforming fleet operations by reducing costs and minimizing risks.

• IoT applications enable real-time monitoring of engine health, tire pressure, and overall vehicle performance, ensuring proactive responses.
• Advanced safety features such as crash detection, emergency alerts, and remote diagnostics enhance both driver confidence and passenger safety.
• Over-the-air (OTA) software updates allow manufacturers to improve safety standards without requiring vehicle recalls.
• Fleet operators and logistics providers are adopting IoT predictive maintenance solutions to lower downtime and operational expenses.
• As a result, automotive IoT solutions are becoming an industry necessity for ensuring safety, improving efficiency, and enhancing customer trust.

3. Growing Investment in Smart Mobility and EV Infrastructure

The transition to sustainable transportation and electric mobility is unlocking new opportunities for IoT integration. Smart mobility ecosystems are being built with IoT at their core, reshaping global transportation.

• Shared mobility platforms, ride-hailing apps, and car-sharing models rely on IoT-enabled monitoring and management.
• Connected EV charging stations are becoming a critical part of the EV infrastructure, enabling real-time usage insights and predictive availability.
• Smart city initiatives, particularly in Asia-Pacific and Europe, are heavily investing in IoT-enabled intelligent traffic management systems.
• Governments and private investors are prioritizing infrastructure upgrades that seamlessly integrate IoT for efficient mobility.
• This growing capital flow toward smart mobility accelerates IoT deployment, making it a crucial factor in shaping the future of the automotive sector.

Market Restraints

1. High Cost of IoT Integration and Implementation

While IoT adoption offers long-term benefits, the upfront costs of integration are a major roadblock for many automotive players.

• IoT deployment requires investments in advanced sensors, cloud computing, AI algorithms, and high-speed connectivity solutions.
• Automakers also need to integrate cybersecurity frameworks, which add further expenses to the manufacturing process.
• Small and mid-sized OEMs often face difficulties in achieving return on investment (ROI) due to limited production volumes.
• Cost sensitivity is especially high in emerging markets, where price competitiveness outweighs innovation-driven investments.
• This makes large-scale IoT adoption challenging, slowing down growth in cost-conscious regions despite rising global demand.

2. Data Security and Privacy Concerns

The surge in connected vehicles has brought data protection and cybersecurity to the forefront. With IoT generating vast amounts of driver and vehicle data, the risks are considerable.

• Connected vehicles store and transmit sensitive information such as location, driving behavior, and payment transactions.
• This makes them vulnerable to hacking attempts, unauthorized tracking, and large-scale data breaches.
• Growing regulatory frameworks, including GDPR in Europe, are raising compliance costs for OEMs and technology vendors.
• Building consumer trust in IoT-driven cars remains a significant challenge as awareness of cybersecurity threats increases.
• Without strong data protection strategies, consumer hesitation and regulatory hurdles can significantly slow down IoT adoption in automotive.

3. Regulatory Complexities and Lack of Standardization

The global nature of the automotive industry makes regulatory compliance and standardization a major restraint for IoT adoption.

• Each country enforces different compliance requirements for connected vehicle technologies.
• Fragmented policies make it difficult for global OEMs and IoT solution providers to deploy uniform solutions.
• Interoperability challenges between devices, communication protocols, and IoT platforms increase integration complexity.
• These inconsistencies extend development cycles, inflate operational costs, and limit scalability of IoT-enabled vehicles.
• Addressing these regulatory and standardization gaps will be crucial for unlocking the full potential of IoT in the automotive industry.

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Geographical Dominance: North America dominates the IoT in Automotive Market, driven by advanced connected car adoption, strong presence of automotive OEMs, and early integration of telematics solutions. The U.S. leads with investments in autonomous driving, V2X communication, and smart mobility infrastructure. Europe follows closely, with Germany, the UK, and France pushing EV adoption and smart transportation projects. Asia-Pacific is the fastest-growing region, with China, Japan, and India accelerating IoT-enabled automotive manufacturing and EV infrastructure.

Key Players

The 'Global IoT in Automotive Market' study report will provide a valuable insight with an emphasis on the global market. The major players in the market are Aptiv PLC, Nvidia Corporation, NXP Semiconductors N.V., Mobileye N.V., ZF Friedrichshafen AG, Baidu, Inc., Huawei Technologies Co., Ltd., Tesla, Inc., and Waymo LLC, Aurora Innovation, Inc.

IoT in Automotive Market Segment Analysis

Based on the research, Verified Market Research has segmented the global market into Application, Component, Type of Communication, and Geography.

• IoT in Automotive Market, by Application
  • Telematics and Connectivity Solutions
  • Predictive Maintenance
  • Fleet Management
  • Autonomous Driving
• IoT in Automotive Market, by Component
  • Sensors and Actuators
  • Connectivity Hardware
  • Software Solutions
• IoT in Automotive Market, by Type of Communication
  • Vehicle-to-Vehicle (V2V)
  • Vehicle-to-Infrastructure (V2I)
  • Vehicle-to-Everything (V2X)
• IoT in Automotive Market, by Geography
  • North America
    • U.S
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • U.K
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Rest of Asia Pacific
  • ROW
    • Middle East & Africa
    • Latin America

Strategic Insight:

The IoT in Automotive Market presents strong growth opportunities as demand for connected vehicles, predictive maintenance, and smart mobility solutions accelerates across North America, Europe, and Asia-Pacific. While high integration costs, regulatory complexities, and data security concerns pose adoption challenges, they also open doors for specialized solution providers and cybersecurity vendors. Market entry strategies should prioritize partnerships with OEMs, investments in EV infrastructure, and compliance-ready IoT platforms. Businesses that align with regional regulations and capitalize on rising connected car demand can secure a competitive advantage and drive profitable transactions in this evolving market landscape.

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Key Highlights of the Report:

• Market Size & Forecast: In-depth analysis of current value and future projections
• Segment Analysis: Breaks down the market by Application, Component, and Type of Communication for focused strategy development.
• Regional Insights: Comprehensive coverage of North America, Europe, Asia-Pacific, and more
• Competitive Landscape: Profiles key players, their strategic initiatives, and innovation-driven growth approaches.
• Growth Drivers & Challenges: Analyzes the forces accelerating growth and the restraints hindering large-scale adoption.
• Challenges and Risk Assessment: Evaluates ethical debates, off-target effects, and regulatory complexities.

Why This Report Matters:

This report equips B2B clients, market professionals, and industrialists with actionable insights into market dynamics, growth forecasts, and competitive strategies. It highlights critical opportunities for investment, enabling decision-makers to drive profitable strategies in the evolving IoT-driven automotive ecosystem.

Who You Should Read This Report:

• Automotive OEMs & Component Manufacturers
• Technology Providers & IoT Solution Vendors
• Investors & Venture Capital Firms
• Industry Consultants & Market Analysts
• Regulatory Authorities & Policymakers

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