Automotive Telematics Market - Size, Share, Industry Trends, and Forecasts (2025-2032)

By Solution:

Based on solution, the automotive telematics market is segmented into component and services.

Trends in the Solution:

• With the advancement of telematics technology, the telematics solutions are becoming more efficient, offering real-time location tracking, diagnostics, and even remote troubleshooting. These solutions help enhance the overall driving experience by offering peace to drivers, particularly in remote or unfamiliar areas.
• Businesses are using telematics solutions to optimize fleet operations, fuel consumption, and improve productivity.
• Thus, the above factors are driving the automotive telematics market demand.

The component segment accounted for the largest revenue in the year 2024.

• Hardware components such as on-board diagnostic (OBD) devices, black boxes, and telematics sensors are critical for collecting real-time vehicle data, including speed, mileage, and driving behaviour.
• These devices are widely adopted in commercial fleet operations and individual vehicles to support usage-based insurance (UBI) models.
• Continuous advancements in hardware, such as miniaturized sensors and integrated GPS modules, enhance their accuracy and efficiency, in turn driving their adoption in the market.
• Cloud-based software solutions allow insurers to access real-time data for risk assessment and personalized policy pricing, enhancing operational efficiency.
• The integration of advanced analytics tools, such as AI and machine learning, supports predictive modelling and accident risk forecasting, increasing the utility of telematics software.
• Thus, the above developments are further driving the automotive telematics market growth.

The service segment is anticipated to register the fastest CAGR during the forecast period.

• The proliferation of connected vehicles and 5G technology are playing crucial role in telematics services, while enabling faster data transmission, lower latency, and reliable communication. This fuels the need for advanced services in telematics applications.
• For instance, in February 2024, Cisco announced partnership with TELUS to introduce 5G capabilities for connected cars in North America, enabling enhanced IoT experiences and driving new revenue streams for car manufacturers. It enables OEMs to leverage TELUs’ high-performance wireless network with 5G-enabled telematics and advanced network services.
• Additionally, monitoring services in vehicle contribute to enhanced reliability, compliance, and efficiency of vehicle fleets across various applications. These services leverage connected cars data to provide drivers with insights into their driving habits, fuel consumption patterns, and environmental impact.
• Thus, the aforementioned factors are expected to drive the automotive telematics market share during the forecast period.

By Technology:

Based on technology, the automotive telematics market is segmented into  embedded, tethered, and integrated.

Trends in technology:

• As urbanization accelerates, there is a growing need for intelligent transportation systems (ITS) supported by telematics, enabling efficient traffic management and optimized commuting experiences.
• The evolution of electric and autonomous vehicles requires sophisticated telematics infrastructures and technology to support complex data processing and ensure seamless connectivity.

The embedded segment accounted for the largest share of 47.20% in the year 2024.

• The segment development can be attributed to the growing integration of telematics systems in passenger and commercial vehicles and increase in the penetration of cloud-based embedded telematics systems for fleet tracking.
• Embedded telematics systems are built directly into the vehicle during manufacturing, offering seamless connectivity and access to a wide range of features such as navigation, vehicle diagnostics, and emergency assistance. These systems often provide robust and reliable connectivity, enhancing the overall driving experience and safety features.
• Thus, the above developments in the embedded segment are driving the automotive telematics market growth.

The tethered segment is anticipated to register fastest CAGR during the forecast period.

• Tethered connectivity solutions involve the use of external devices, such as portable navigation devices (PNDs) or dongles, which are connected to the vehicle's onboard systems.
• The segment development can be attributed to the easy integration of phones with Wi Fi services and Bluetooth along with growing need for connected cars and their equipment with telematics software to provide vehicle owners for alerts.
• The integration of technology in mobile phones provides alerts to vehicle owners and prevents the potential danger of car crashes.
• These developments in the technology segment are anticipated to further drive the automotive telematics market trends during the forecast period.

By Application:

Based on application, the market is segmented into vehicle health monitoring, fleet and asset tracking, dealer scheduling, fuel efficiency analysis, in-vehicle coaching, expense management, remote diagnostics, insurance telematics, and others.

Trends in application:

• Fleet managers utilize telematics data to boost productivity, cut operational costs, enhance driver safety, and ensure compliance with regulatory standards such as Hours of Service (HOS) and vehicle weight limits.
• The growth of the segment is attributed to the rising consumer preference for smart, connected vehicles equipped with features such as GPS navigation, remote diagnostics, and emergency assistance. These features not only enhance the overall driving experience but also contribute to improved safety and operational efficiency.

The vehicle health monitoring segment accounted for the largest revenue share in the year 2024 and it is expected to register the highest CAGR during the forecast period.

• As vehicles become more complex with advanced technologies, the maintenance and repair costs escalate, prompting market players to seek innovative solutions to optimize operational efficiency. Vehicle health monitoring systems offer real-time monitoring, diagnostics, and prognostics capabilities, allowing for predictive maintenance and minimizing downtime.
• The advent of connected and autonomous vehicles (CAVs) is reshaping the automotive landscape, presenting new prospects for health monitoring implementation. CAVs generate vast amounts of data through sensors and onboard systems, providing better insights into vehicle health and performance.
• For instance, in December 2024, Roadzen Inc. announced the partnership with Bosch, to integrate Bosch’s mobility solutions into Roadzen’s drivebuddy ADAS platform. The system monitors vehicle and driver behaviour along with road conditions, while offering real-time risk assessment and proactive safety advice.
• These developments in the application segment are projected to drive the global market during the forecast period.

By Vehicle Type:

Based on vehicle type, the automotive telematics market is segmented into passenger vehicles and commercial vehicles.

Trends in vehicle type:

• The segment development can be attributed to the advancements in connectivity, sensor technology, and artificial intelligence. These include vehicle-to-vehicle (V2V) communication, enabling vehicles to exchange information about their speed, location, and trajectory to enhance safety and traffic efficiency.
• Other emerging applications include remote software updates, predictive maintenance, personalized services, and mobility-as-a-service (MaaS) offerings, which further expand the scope of connected vehicle functionalities and create new opportunities for innovation and monetization.

The passenger vehicles segment accounted for the largest revenue share in the year 2024.

• The convergence of vehicle electrification and autonomous driving technologies presents unique prospects for innovation and collaboration across various industry stakeholders, including automotive manufacturers, technology companies, and others.
• The growing need for vehicle safety and real-time data analytics has led to increased demand for services such as insurance risk assessment and driver behaviour monitoring, which also help reduce operational costs for fleet owners and insurance companies. These services are increasingly integrated into telematics systems to offer a comprehensive suite of solutions.
• For instance, according to Automotive Components Manufacturers Association of India (ACM), in 2025, 90% of global passenger cars will be connected and around 600 million passenger cars with embedded telematics will be on the road, with India accounting for over 40 million cars.
• Thus, based on the above analysis, the aforementioned factors are expected to drive the automotive telematics market.

The commercial segment is anticipated to register the fastest CAGR during the forecast period.

• By leveraging vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication, connected vehicles can alert drivers to potential hazards, optimize traffic flow, and reduce the likelihood of collisions, thereby saving reducing injuries on the road.
• Tour operators, rental car companies, and transportation providers utilize telematics to monitor vehicle locations, ensure route adherence, and provide real-time updates to passengers.
• Additionally, vehicle telematics enables travel and tourism businesses to optimize vehicle utilization, reduce fuel consumption, and deliver personalized experiences to customers.
• For instance, in April 2024, Samsara signed an agreement with United National Foods, Inc. (UNFI) to deploy its telematics platform in UNFI's trucks. This collaboration aims to improve fleet safety and sustainability by optimizing routes and monitoring driver behaviour.
• These developments in the vehicle type segment are anticipated to further drive the automotive telematics market trends during the forecast period.

By Sales Channel:

Based on sales channel, the market is segmented into OEMs and aftermarket.

Trends in sales channel:

• The segment growth can be attributed to the increasing automobile manufacturer emphasis on incorporating advanced telematics systems.
• The segment is witnessing a steady growth, driven by increasing consumer awareness of the benefits of connected vehicle services and rising preference to upgrade existing vehicles.

The OEMs segment accounted for the largest revenue share in the year 2024.

• OEM-provided telematics solutions seamlessly integrate with vehicle systems, offering features such as in-vehicle connectivity, embedded software, and manufacturer-specific functionalities.
• OEMs capitalize on their extensive knowledge of vehicle design and engineering to deliver telematics solutions that are tailored to the specifications and requirements of their vehicle models.
• Additionally, OEMs often provide comprehensive service and support packages, offering customers with a seamless experience from vehicle purchase to ongoing maintenance and updates.
• Thus, based on the above analysis, the aforementioned factors are expected to drive the global market.

The aftermarket segment is anticipated to register the fastest CAGR during the forecast period.

• Aftermarket solutions provide flexibility and choice to fleet operators, enabling them to retrofit telematics systems onto their fleets, and upgrade vehicles.
• The aftermarket solutions cater to a diverse customer base, ranging from small businesses with mixed vehicle fleets to large enterprises seeking specialized telematics solutions tailored to their specific operational requirements.
• Aftermarket providers often differentiate themselves through innovative product offerings, customization capabilities, and extensive service networks, catering to the aftermarket needs of customers across geographies.
• The above factors are anticipated to further drive the global market during the forecast period.