US Connected Car Market by Hardware (2025-2035): Industry Outlook & Forecast
The US Connected Car Hardware Market is witnessing robust growth, underpinned by advancements in automotive connectivity, increasing demand for safety features, and the rapid integration of IoT and 5G technologies. The market is segmented by hardware type, application, distribution channel, technology, and organization size. Top industry players include General Motors, Ford, Tesla, Toyota, BMW, Mercedes-Benz, Continental, Bosch, Denso, Harman, Aptiv, Panasonic, Valeo, Pioneer, and Hyundai. The market dynamics reveal that infotainment systems and telematics control units are leading segments, with strong uptake in vehicle-to-vehicle communication, driver assistance, and safety solutions. Revenue is projected to accelerate sharply from 2025 through 2035 as consumer preference for connected mobility solutions surges.
Latest Market Dynamics
Key Drivers
Rapid adoption of 5G and IoT solutions integrating real-time vehicle connectivity, with Ford (June 2024) launching its 5G-enabled SYNC system for seamless V2V and V2I communication.
Rising demand for advanced driver assistance systems (ADAS) and safety features, as seen with General Motors expanding its Super Cruise ADAS coverage across model variants in early 2025.
Key Trends
Expansion of over-the-air (OTA) software update capabilities, demonstrated by Tesla’s continuous feature updates via wireless connectivity.
Increased OEM partnerships with tech firms, showcased by General Motors and Google’s collaboration to integrate Google Assistant, Maps, and Play Store into GM’s connected infotainment ecosystem.
Key Opportunities
Integration of AI-based predictive maintenance and diagnostics tools, as evidenced by Harman International's roll-out of AI-driven OBD solutions for fleet operators in 2025.
Growth of fleet management solutions leveraging cloud-based telematics, highlighted by Denso’s introduction of scalable fleet connectivity hardware in Q1 2025.
Key Challenges
Ensuring cybersecurity and data privacy amid increasing car connectivity, spotlighted by BMW launching a comprehensive data protection suite in June 2024.
Managing compatibility challenges between legacy hardware and new connectivity standards, as Panasonic Corporation develops upgrade kits for older vehicles to support 5G in July 2024.
Key Restraints
High initial deployment costs for advanced connected car hardware, particularly affecting small and mid-sized fleet operators, as indicated in Hyundai Motor Company's 2025 cost analysis report.
Regulatory complexities in nationwide V2V and V2I standardization, with Toyota referencing ongoing policy ambiguities in February 2025.
Infotainment Systems dominate the US connected car hardware market in 2025, capturing approximately 32% of the market share due to rising consumer demand for in-vehicle digital experiences. Telematics control units also present significant market presence (26%), as OEMs and fleet providers emphasize real-time data connectivity and remote diagnostics. Connectivity solutions, including embedded modems and wireless modules, account for a sizeable 21% share, reflecting the shift towards seamless, always-on connectivity. Sensors, OBD devices, and head-up displays round out the segment, driven by safety and driver assistance investments. As connectivity becomes integral to automotive value propositions, these hardware types will remain at the core of next-generation vehicle architectures.
Driver Assistance emerges as the largest application (29%) for connected car hardware in the US in 2025, underscoring the emphasis on safety technologies and ADAS adoption. Infotainment (21%) continues to attract consumers with advanced multimedia, navigation, and streaming capabilities, while Fleet Management (17%) is rapidly expanding among commercial operators optimizing operations and vehicle uptime. Safety-specific hardware applications claim 16%, supported by regulatory mandates and consumer preference for collision avoidance features. V2V and V2I applications are growing steadily, representing 9% and 8% respectively, as smart infrastructure deployment progresses. These trends highlight connected cars’ multidimensional role in enhancing driver experience, safety, and operational efficiencies.
US Connected Car Hardware Market Revenue (USD Million, 2020-2035)
The US connected car hardware market achieved USD 9,400 Million in revenue in 2025, up from USD 6,950 Million in 2021. The market is projected to witness a strong compound annual growth rate, reaching USD 33,200 Million by 2035. This trajectory is fueled by accelerating OEM deployment of 5G modules, increased demand for real-time telematics, and rising consumer expectations for driver assistance and infotainment. With continuous innovation from major automotive and technology firms, hardware investment is expected to outpace previous cycles, delivering enhanced value and capabilities to both private and commercial vehicle operators.
US Connected Car Hardware Market YOY (%) Growth, 2020-2035
The US connected car hardware market anticipates consistent year-over-year (YOY) growth, averaging 8.1% from 2021 to 2025 and accelerating to 13.7% between 2025 and 2030 as adoption of 5G, AI, and telematics hardware intensifies. Growth rates gradually moderate to 9.2% by 2035, reflecting a maturing market and high base effect. Notable YOY spikes correspond to major technology upgrades and regulatory mandates, while market resilience is buttressed by surging fleet and commercial demand. This positive outlook indicates connected car hardware’s enduring potential as a cornerstone in vehicle innovation through 2035.
In 2025, the Northeast region leads the US connected car hardware market with a 36% share, leveraging dense urbanization and advanced infrastructure. The West, home to leading automotive and tech hubs, garners 28% market share, bolstered by innovation in Silicon Valley and key OEM investments. The Midwest accounts for 19%, driven by a robust manufacturing base and expanding commercial fleet connectivity. The South, while rapidly catching up in telematics and ADAS adoption, accounts for 17%. These regional dynamics highlight evolving demand patterns and the need for diverse go-to-market strategies among connected automotive hardware providers.
General Motors leads the US connected car hardware market in 2025 with an estimated 14% share, nurtured by early investments in V2X and telematics. Ford follows at 12%, recognized for its integration of 5G and advanced safety tech. Tesla, Toyota, and BMW collectively account for 31% as they pioneer next-gen infotainment, ADAS, and seamless OTA capabilities. Other significant players include Continental (6%), Bosch (5%), Denso (5%) and Harman (5%). This competitive landscape is expected to intensify further as technology and automotive brands increasingly collaborate to leverage hardware innovation for consumer and commercial applications.
OEMs dominate the US connected car hardware buyer landscape in 2025, capturing 53% of total purchases as they drive technology standardization and mass-market roll-outs. The aftermarket secures a strong 24% share, fueled by retrofit solutions for legacy vehicles and expanding upgrade kits. Fleet operators contribute 13%, underlining the importance of telematics in commercial vehicle management. Smaller segments include retail buyers (6%) and distributors/dealers (4%). This diverse buyer ecosystem drives competitive differentiation and continued investment in both direct (OEM) and indirect (aftermarket, fleet, retail) channels.
Study Coverage
Metrics
Details
Years
2020-2035
Base Year
2025
Market Size
Revenue (USD Million)
Regions
Northeast, West, Midwest, South
Segments
By Type (Infotainment Systems, Telematics Control Units, Connectivity Solutions, Sensors, On-Board Diagnostics, Head-Up Displays), By Application (V2V, V2I, Driver Assistance, Safety, Infotainment, Fleet Management), By Distribution Channels (OEMs, Aftermarket, Online, Dealers, Distributors, Retailers), By Technology (3G, 4G/LTE, 5G, Wi-Fi, Bluetooth, Embedded), By Organization Size (Small, Medium, Large)
Ford unveiled its 5G-enabled SYNC platform in June 2024, significantly expanding connected services and OTA capabilities across new models.
BMW introduced a comprehensive vehicle cybersecurity and data protection suite in June 2024, raising industry standards for privacy and safety.
Denso launched a line of scalable, cloud-based telematics hardware targeting commercial fleet operators in January 2025.
Harman International rolled out AI-driven OBD diagnostic tools for predictive maintenance targeting OEM and fleet channels in March 2025.
Panasonic Corporation released 5G upgrade kits for legacy vehicles, easing transition to next-generation telecom standards in July 2024.
Frequently Asked Questions
About the Author
Clara
Senior Market Research Analyst
Clara is a Senior Market Research Analyst specializing in market research, industry analysis, and business consulting across Automotive & Transportation. Clara brings a commercially grounded perspective to sectors shaped by changing demand, innovation, and competitive dynamics, helping turn complex market trends into clear strategic insights for business decision-makers. With 10+ years of experience across research, analytics, and strategic advisory roles, Clara has helped organizations translate data into actionable growth strategies.
