Global Automotive IoT Market Growth, Share, Size, Trends and Forecast (2025 - 2031)

The Global Automotive Inverters Market is segmented by inverter type into traction inverters and soft switching inverters. Traction inverters dominate the market due to their crucial role in converting DC power from the battery into AC power for electric motors, ensuring efficient vehicle propulsion. Soft switching inverters, on the other hand, offer advantages in reducing power loss and improving efficiency, making them increasingly adopted in next-generation electric vehicles (EVs). The demand for both types is driven by advancements in electric mobility, with manufacturers focusing on enhancing inverter efficiency and durability.

Based on material, the market is categorized into gallium nitride (GaN), silicon (Si), silicon carbide (SiC), and others. Silicon remains the most widely used material due to its cost-effectiveness and established production processes. However, SiC and GaN-based inverters are gaining traction as they offer superior performance in high-power applications, including fast-charging EVs. SiC inverters, in particular, are preferred for their high efficiency, reduced energy losses, and ability to operate at higher temperatures, making them ideal for modern EV powertrains.

The market is further segmented by power rating into below 50 kW, 50-100 kW, and above 100 kW. Inverters in the 50-100 kW range hold a significant share, as they are commonly used in passenger EVs and hybrid vehicles. The below 50 kW segment is primarily associated with smaller EVs and hybrid models, where lower power output suffices. Meanwhile, above 100 kW inverters are increasingly in demand for high-performance EVs, commercial electric trucks, and buses, where greater power output is necessary for efficient operation.

By application, the market is divided into electric vehicles (EVs) and hybrid vehicles (HVs), with EVs accounting for the largest share due to the global push toward full electrification. Hybrid vehicles, while still significant, are experiencing moderate growth as automakers transition towards fully electric fleets. Geographically, North America, Europe, and Asia-Pacific lead the market, with Asia-Pacific at the forefront due to strong EV adoption in China, Japan, and South Korea. Europe follows closely, driven by stringent emission norms and government incentives for EVs, while North America is expanding with increasing investments in EV infrastructure. Emerging regions like Latin America and the Middle East & Africa are witnessing gradual adoption as EV infrastructure develops.

Global Automotive IoT Segment Analysis

In this report, the Global Automotive IoT Market has been segmented by Communication, Offering, Connectivity, Application and Geography.

Global Automotive IoT Market, Segmentation by Communication

The Global Automotive IoT Market has been segmented by Communication into Vehicle To Vehicle, In vehicle Communication, and Vehicle To Infrastructure.

The Global Automotive IoT Market is segmented based on communication into Vehicle-to-Vehicle (V2V), In-Vehicle Communication, and Vehicle-to-Infrastructure (V2I). Vehicle-to-Vehicle (V2V) communication enables real-time data exchange between vehicles to enhance road safety and traffic efficiency. It allows cars to share information about speed, location, and potential hazards, reducing collision risks and improving overall driving experiences. V2V communication is critical for the development of autonomous driving technologies and advanced driver-assistance systems (ADAS), as it provides a network of interconnected vehicles that can anticipate and respond to potential road challenges.

In-Vehicle Communication focuses on data exchange within the vehicle itself, enhancing passenger convenience, system diagnostics, and vehicle performance monitoring. This includes infotainment systems, smart dashboards, voice assistants, and sensor-based communication between different vehicle components. Modern connected vehicles rely on in-vehicle networks to optimize operations, ensuring seamless interaction between electronic control units (ECUs), sensors, and cloud-based applications. The integration of artificial intelligence (AI) and IoT in this segment has significantly improved user experience, predictive maintenance, and vehicle security.

Vehicle-to-Infrastructure (V2I) communication facilitates interaction between vehicles and surrounding infrastructure, such as traffic lights, road signs, toll booths, and smart city networks. This segment plays a crucial role in enhancing urban mobility, reducing congestion, and improving traffic management. V2I technology enables vehicles to receive real-time updates on road conditions, speed limits, and potential hazards, contributing to a safer and more efficient driving environment. As cities adopt smart infrastructure solutions, the V2I segment is expected to grow rapidly, driven by government initiatives, advancements in 5G technology, and the expansion of intelligent transportation systems.

Global Automotive IoT Market, Segmentation by Offering

The Global Automotive IoT Market has been segmented by Offering into Hardware, Software, and Services.

The Global Automotive IoT Market is segmented by offering into Hardware, Software, and Services, each playing a crucial role in enabling connected vehicle ecosystems. Hardware includes components such as sensors, GPS modules, processors, and connectivity solutions that facilitate data collection and communication within vehicles. These components are essential for real-time monitoring, advanced driver assistance systems (ADAS), and vehicle-to-everything (V2X) communication, helping to enhance safety, efficiency, and automation in modern automobiles. The increasing adoption of smart vehicle technologies and the rise of electric and autonomous vehicles are driving the demand for robust IoT hardware solutions.

Software is a key enabler in the Automotive IoT ecosystem, providing platforms for data processing, vehicle analytics, and connectivity management. This segment includes operating systems, telematics software, cloud-based applications, and AI-powered solutions that enhance in-vehicle experiences, predictive maintenance, and fleet management. As automakers focus on improving user interfaces and integrating AI-driven features, software solutions are becoming increasingly sophisticated. The shift towards over-the-air (OTA) updates and cybersecurity enhancements is further driving innovations in this segment, ensuring that connected vehicles remain secure and up to date.

The Services segment encompasses consulting, integration, and maintenance services that help implement and manage Automotive IoT solutions effectively. With the growing complexity of connected car ecosystems, service providers assist in deploying IoT infrastructure, ensuring interoperability, and optimizing network performance. Managed services, including remote diagnostics and predictive maintenance, are gaining traction as automotive companies seek cost-effective ways to enhance vehicle performance and customer experience. The increasing emphasis on data-driven decision-making and compliance with regulatory standards is further boosting the demand for specialized IoT services in the automotive sector.

Global Automotive IoT Market, Segmentation by Connectivity

The Global Automotive IoT Market has been segmented by Connectivity into Embedded, Tethered and Integrated.

Embedded connectivity refers to built-in communication capabilities directly integrated into the vehicle's hardware and software systems. This includes onboard sensors, processors, and communication modules that enable continuous data exchange between the vehicle and external networks. Embedded connectivity offers seamless integration, real-time data transmission, and autonomous functionality, enabling features such as remote diagnostics, over-the-air updates, and telematics services.

Tethered connectivity involves external devices or smartphones tethered to the vehicle via wired or wireless connections, such as USB, Bluetooth, or Wi-Fi. Tethered devices serve as conduits for accessing external data networks, internet services, and cloud-based applications, providing drivers and passengers with connectivity features such as hands-free calling, music streaming, and navigation assistance.

Integrated connectivity encompasses hybrid solutions that combine embedded and tethered technologies to leverage the strengths of both approaches. Integrated connectivity solutions offer the best of both worlds, providing seamless integration with onboard systems while also enabling connectivity with external devices and networks. This hybrid approach enables features such as smartphone mirroring, app integration, and multi-device connectivity, enhancing the versatility, functionality, and user experience of automotive IoT solutions.

Global Automotive IoT Market, Segmentation by Application

The Global Automotive IoT Market has been segmented by Application into Navigation, Infotainment, Telematics and Others.

Navigation systems, leveraging IoT capabilities, provide real-time traffic updates, route optimization, and predictive navigation features, enhancing driver convenience and reducing travel time. Infotainment systems integrate IoT-enabled connectivity to offer a wide range of entertainment options, including streaming music, podcasts, and online content, personalized to user preferences and accessible through voice commands or touch interfaces.

Telematics, a key application of automotive IoT, enables remote monitoring, diagnostics, and maintenance of vehicles through IoT sensors and communication technologies. Telematics systems facilitate features such as remote vehicle tracking, preventive maintenance alerts, and emergency assistance, improving vehicle safety, efficiency, and operational performance.

The "Others" category encompasses a diverse range of IoT applications in automotive, including vehicle-to-vehicle (V2V) communication, vehicle-to-infrastructure (V2I) connectivity, and vehicle-to-cloud (V2C) integration. These applications enable advanced safety features, such as collision avoidance systems and adaptive cruise control, as well as smart city initiatives, such as traffic management and autonomous driving.

Global Automotive IoT Market, Segmentation by Geography

In this report, the Global Automotive IoT Market has been segmented by Geography into five regions; North America, Europe, Asia Pacific, Middle East and Africa and Latin America.

Global Automotive IoT Market Share (%), by Geographical Region, 2024

North America, with its mature automotive industry and strong focus on technological innovation, is a key market for IoT-enabled automotive solutions. The region boasts a high level of connectivity infrastructure and a tech-savvy consumer base, driving demand for connected car technologies and smart mobility solutions.

Europe, known for its stringent safety and emissions regulations, is a prominent hub for IoT adoption in the automotive sector. European automakers prioritize connectivity, telematics, and advanced driver assistance systems (ADAS) to enhance vehicle safety, efficiency, and environmental performance. Additionally, the region's emphasis on sustainable mobility and smart city initiatives accelerates the integration of IoT technologies into vehicles and transportation systems.

In Asia Pacific, rapid urbanization, rising disposable incomes, and a burgeoning middle class are driving demand for IoT-enabled vehicles and services. Countries like China, Japan, and South Korea are at the forefront of IoT innovation, leveraging advancements in artificial intelligence (AI), 5G connectivity, and autonomous driving technologies to revolutionize the automotive industry. Moreover, government initiatives to promote electric vehicles (EVs) and smart transportation infrastructure further propel the adoption of IoT solutions in the region.

The Middle East and Africa region, while comparatively smaller in terms of market size, exhibits untapped potential for IoT adoption in the automotive sector. Growing urbanization, infrastructure development, and increasing investment in smart city projects create opportunities for IoT-enabled transportation solutions and connected vehicle services. Moreover, the region's strategic location and focus on digital transformation position it as a emerging market for IoT-driven automotive innovation. Latin America, characterized by diverse market dynamics and economic challenges, presents both opportunities and barriers for IoT adoption in the automotive sector.