Europe’s Connected Car Market Insights

Why Europe’s Connected Car Market Might Outpace the US – Analyst Insights

“The Europe connected car market is witnessing substantial growth, propelled by advancements in telematics, IoT integration, and a rising consumer demand for enhanced in-car connectivity and safety features. Analysts observe that regulatory mandates, including the EU’s eCall initiative, are driving adoption by necessitating advanced communication systems in vehicles. The expansion of 5G networks is further facilitating real-time vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication, which improves road safety and traffic management.

Automakers are increasingly partnering with technology firms to incorporate advanced infotainment, navigation, and driver-assistance systems, thereby meeting evolving consumer expectations. While Western Europe is characterized as a mature market with high adoption rates, Eastern Europe offers emerging opportunities as its infrastructure continues to develop.

The monetization of data from connected vehicles is becoming a lucrative segment, although it raises concerns regarding cybersecurity and privacy. The shift toward autonomous and electric vehicles is also anticipated to enhance connected car functionalities. However, market growth is moderated by high implementation costs and varying levels of network infrastructure across different regions. Overall, the market outlook is positive, supported by strong innovation pipelines, government backing, and an increasing readiness among consumers, positioning Europe as a leader in connected mobility solutions. "

The Europe Connected Car market was valued at USD 3,369 Million in 2024 and is projected to grow to USD 9,638 Million by 2030, with a compound annual growth rate (CAGR) of 19.7% from 2025 to 2030

The use of connected cars is growing as a result of large automakers and a strong digital and telecommunications infrastructure. Additionally, Europe's dedication to road safety and sustainability is promoting the usage of connected features like telematics, real-time diagnostics, and vehicle-to-everything (V2X) connectivity.

Governments are also backing smart mobility initiatives that align seamlessly with these advancements. In urban areas, there’s a focus on developing smart city frameworks where connected cars play a crucial role. On top of that, there’s a growing consumer demand for features such as infotainment, navigation, and driver assistance, which is further driving growth in the region.

EU regulations, such as mandatory eCall systems, are pushing automakers to adopt connected safety features.

European Union regulations have played a major role in shaping the growth of the connected car market. One of the key rules is the requirement for eCall systems, which automatically alert emergency services in the event of a serious accident. Furthermore, the European General Safety Regulation mandates the inclusion of advanced driver-assistance systems (ADAS) like lane-keeping assist, speed assistance, and automatic emergency braking. All of these systems rely on connectivity and real-time data processing, pushing car manufacturers (OEMs) to embrace connected technologies to stay compliant with the law.

Regulators are also encouraging the sharing of vehicle data for better traffic safety analysis and infrastructure planning, aligning with the broader goals of connected cars. The emphasis on reducing road fatalities and improving safety for both drivers and pedestrians has made connected systems crucial for the vehicles of the future. Additionally, regulatory support fosters consistency across EU member states, which benefits manufacturers by simplifying the development and rollout of these technologies throughout the region.

Consumers increasingly seek seamless connectivity, smart entertainment, and navigation in their vehicles.

European drivers are increasingly leaning towards vehicles that come with advanced infotainment systems designed to elevate their driving experience. Today’s consumers expect features like smooth smartphone integration, voice control, up-to-date navigation, real-time traffic info, and streaming entertainment options. All these features depend heavily on good internet connectivity and cloud services, which are vital for connected car technologies.

Platforms such as Apple CarPlay, Android Auto, and various automaker-specific systems have made it easier for people to embrace these tech-savvy vehicles. In both luxury and mid-range cars, having a connected infotainment system isn't just a nice add-on anymore; it’s become a standard feature. On top of that, there’s a noticeable shift in consumer habits, especially among younger drivers, who want their digital devices and cars to stay connected all the time.

Car manufacturers are catching onto this trend by providing subscription-based infotainment services like Wi-Fi hotspots, satellite radio, and other apps tailored for specific vehicles. This not only boosts customer satisfaction but also creates new revenue opportunities for the manufacturers. As a result, the push for innovative infotainment solutions is playing a significant role in the growth of the connected car market in Europe.

Government efforts to build smart cities are promoting the adoption of connected vehicles that can interact with urban infrastructure.

Across Europe, various national and local governments are rolling out smart mobility and smart city projects aimed at enhancing the efficiency, sustainability, and safety of urban transportation. A key component of these initiatives is connected cars, which facilitate real-time communication with infrastructure, traffic management systems, and each other. Technologies that enable vehicle-to-infrastructure (V2I) and vehicle-to-network (V2N) communication are helping to create smoother traffic patterns, optimize routes, and develop smarter parking solutions.

Cities like Amsterdam, Barcelona, and Stockholm are at the forefront of these efforts, where pilot programs and collaborations between the public and private sectors are focused on merging mobility platforms with connected vehicle technologies. Additionally, European initiatives such as Horizon Europe and C-ITS (Cooperative Intelligent Transport Systems) are driving research, development, and implementation of smart mobility infrastructure.

By allowing cars to interact with traffic signals, road sensors, and cloud services, this smart city integration aims to decrease congestion, lower emissions, and reduce accidents. The alignment of government policy with technological advancements is significantly boosting the connected car market throughout Europe.

The rollout of 5G networks across Europe supports high-speed, low-latency communication essential for connected car functionalities.

The rollout of 5G networks across Europe is significantly driving the advancement of connected car technologies. Compared to 4G, 5G provides ultra-low latency, greater bandwidth, and enhanced reliability, which are vital for real-time communication between vehicles. This is particularly important for advanced driver-assistance systems (ADAS), autonomous driving, and V2X (vehicle-to-everything) applications. Countries like Germany, France, and the UK are leading this 5G deployment, often collaborating with major telecom companies and automotive manufacturers.

This expansion allows vehicles to connect instantly with one another, as well as with infrastructure and cloud services. Consequently, data transmission for navigation, hazard detection, remote diagnostics, and infotainment becomes much faster. Additionally, the capabilities of 5G support edge computing, enabling cars to process data locally for immediate responses, which is essential for functions like emergency braking and obstacle detection.

Trials of 5G-enabled corridors and cross-border pilot projects are currently being conducted on European highways. As the availability of the network increases, connected car features are expected to grow more advanced, reliable, and integrated, significantly influencing consumer demand and strategies for original equipment manufacturers (OEMs) in the region.

EV growth fuels demand for connectivity to manage charging, range tracking, and energy efficiency.

Europe is experiencing a notable increase in the adoption of electric vehicles (EVs), a trend driven by environmental regulations, incentives, and a growing consumer demand for sustainable transportation solutions. EVs depend significantly on connected technologies to monitor battery performance, manage energy usage, and locate charging stations in real time. Typically, EVs are fitted with integrated applications and connected dashboards that offer insights into vehicle health, predictive maintenance, and remote features such as pre-heating and remote start. The interplay between EV technology and connected systems is apparent through the extensive use of telematics, cloud platforms, and mobile applications for user engagement. Additionally, governments across Europe are enhancing EV infrastructure, which frequently integrates with vehicle navigation systems through connectivity. Furthermore, connected features play a crucial role in managing EV fleets and facilitating vehicle-to-grid (V2G) communication. As the penetration of EVs continues to rise, the demand for advanced connectivity becomes increasingly critical, further propelling the growth of the connected car market across the European region.

Competitive Landscape

Some of the major companies operating within the Europe Connected Car Market are: Continental AG, Robert Bosch GmbH, Harman International (Samsung), DENSO Corporation, Ericsson, Sierra Wireless, NXP Semiconductors, Qualcomm Technologies, Intel Corporation, Cisco Systems and Others.