Automotive Communication Protocol Market Size - By Protocol, By Vehicle, By Application, Analysis, Share, Growth Forecast, 2024 - 2032

Automotive Communication Protocol Market Size

The global automotive communication protocol market size was valued at USD 1.6 billion in 2023 and is projected to grow at a CAGR of 7.4% between 2024 and 2032. The development of V2X communication brings about the need for protocols capable of managing external connectivity to the infrastructure, vehicles, people, and networks. This includes seamless 5G network and smart city infrastructure as well as cloud service integration.
 

In order to increase real-time traffic notifications, remote preparatory diagnosis, over-the-air configuration changes, and even emergency services conversations, strict and standardized algorithms are a must. An example, according to GMI, the automotive vehicle-to-everything (V2X) market, or V2X components market supply was over 2.5 billion USD as of 2022 and is expected to develop at a 25% CAGR over the forecast period 2023-2032. This is due to the establishment of smart cities and Intelligent Transport Systems (ITS).

The transformation towards electric and hybrid vehicles requires effective communication protocols because of the complexity of power systems, battery management, charging infrastructure, and optimized energy usage. These vehicles have dozens of electronic control units (ECU) for energy-optimized communication, which allows for battery health, power usage, regenerative braking, and thermal capabilities to be constantly monitored. The increasing complexity of these systems develops a need for robust high-speed protocols, particularly high-speed CAN-FD and Automotive Ethernet.
 

Automotive Communication Protocol Market Trends

The use of time-sensitive networking technology over Ethernet networks has emerged as a viable solution for the communication concerns in real-time systems. This technology combines precise timing and synchronization for safety-critical applications with high-bandwidth data transmission. As a result, manufacturers are increasingly adopting TSN features in their vehicle network designs.
 

For example, in the gPTP, IEEE 802.1Qav, TC9562, and TC9563 Ethernet controllers were introduced by Toshiba in January 2023 with a focus on high-bandwidth usage. The TC9562 is able to support 1Gbps Ethernet while the TC9563 scales networking capabilities up to 2 ports of 10Gbps each.
 

This is referring to the movement of the industry towards service-oriented architectures (SOA) for vehicle networks that allow for more communication systems modularity and flexibility. This approach increases resource management skill, lowers complexity in updates, and increases optimization possibilities in the future. Furthermore, the SOA model contributes to the evolution of software-defined vehicles along with the updates of the vehicles through OTA.
 

The automotive industry is at a negative note because of the competition from protocols such as CAN, LIN, and others, such as FlexRay, Ethernet, and MOST. This fragmentation makes it difficult for communication of different vehicle systems to a standard. So, manufacturers will have to spend more funds on protocol converters and interface solutions, thereby increasing their costs and complexity during the period of development. Besides, they have to keep supporting the older systems and gradually adopt these new standards.
 

Automotive Communication Protocol Market Analysis

Based on protocol, the market is segmented into Controller Area Network (CAN), Local Interconnect Network (LIN), FlexRay, Media Oriented System Transport (MOST), ethernet, and others. In 2023, the Controller Area Network (CAN) segment accounted for over 45% of the automotive communication protocol market share and is expected to exceed USD 1.5 billion by 2032.
 

• The segment is fueled by the standardizations in the automotive sector of CAN and its Flexible Data Rate Edition (FD) version.
   
• For example, in Jan. 2024, Bosch combined Flexible Data Rate (FD) with the Controller Area Network. This modification of the original CAN protocol, as defined in ISO 11898-1, is essential with the rapid growth of automotive networks. The CAN FD is used in semiconductor suppliers and manufacturers, and end users.
   
• Industry leaders such as Infineon, NXP, Daimler, and GM advocate these standards. These standards facilitate the integration of parts produced by different manufacturers and ease management of the supply chain.
   
• Because of the widely adopted mesh of area networks in automotive development tools, testing instruments and diagnostic systems, a strengthening ecosystem is established which promotes further adoption of the protocol.

Based on the vehicle, the automotive communication protocol market is divided into passenger vehicles and commercial vehicles. By 2032, the passenger vehicles segment is expected to exceed USD 2 billion due to several key factors.
 

• The rise in usage of EVs is increasing the need for much-developed communication protocols that support heavy battery management systems, powertrain control, and energy management.
   
• Both CAN and Ethernet are critical communications links for real-time data exchange within an EV battery management system (BMS), motor controllers and related components. With the shift to electrification, the automotive industry has increasing requirements for communications networks for efficient energy management, regenerative braking, and power distribution. Especially, high bandwidth and low latency specifications are becoming more obligatory.
   
• Passenger vehicles are now being empowered with networking communication protocols through the advanced zonal architectures. They aim to shift away from traditional domains that are centered around autonomous control units for powertrain, ADAS, infotainment and others. The powertrain domain is still the most IT-dependent and therefore its control units are embedded in different zones. This transformation supports lower system wiring complexity, lowers weight and cost, and enhances data transfer.
   
• As the phase of the vehicle industry transitions from hardware-based to software-based structures, automated vehicles utilize more Ethernet protocols that support zone area for high-speed data transfer. It supports high levels of vehicle electrification and automation, improves system efficiency and scalability.

In 2023, China automotive communication protocol market accounted for over 35% revenue share.
 

• The region is also evolving rapidly as Chinese car makers are implementing high bandwidth Ethernet to accommodate the powerful demands of ADAS and connected smart cars. With this shift, there is the emergence of more virtual and augmented reality products and enhancements in neural interfaces, suggesting the need for more research to be conducted in that area.
   
• Most of the big automotive manufacturing companies now use V2X C-V2X protocols which are more reliable than the traditional ones. C-V2X technologies improve road safety as well as traffic efficiency through vehicle-to-infrastructure and pedestrian communication. The U.S. is leading in the implementation of C-V2X with elaborate tests on their infrastructure and advanced adoption of new technologies.
   
• European auto manufacturers are integrating a hybrid network structure consisting of CAN FD and Automotive Ethernet. This method offers the best of both worlds in terms of speed, as the traditional CAN protocols are slower than the high-bandwidth modern vehicle systems, especially in the premium segments where advanced features are integrated into vehicles.
   

Automotive Communication Protocol Market Share

NXP, Bosch, and Infineon collectively held a substantial market share of over 15% in the automotive communication protocol industry in 2023.
 

• NXP has formed key relationships with automotive OEMs and tier 1 suppliers to design effective connected and autonomous vehicles using innovative technologies. NXP does the most work regarding cybersecurity for in-vehicle networks focusing on secure communication protocols that prevent breaching and hacking of data which is a necessary aspect for such vehicles.
   
• Bosch intends to move towards a model where vehicles are defined largely by the software they run, which means it will be important to have the right communication protocols in place. With the help of software updates and scalable architectures, Bosch wants to ensure that vehicles can cope with newer features and the regulatory environment in the future.
   
• Infineon has directed its efforts towards powertrain, braking or steering systems that are classified as safety critical. These are the supporting communication systems that are part of the company’s strategies: CAN, LIN and FlexRay.
   

Automotive Communication Protocol Market Companies

Major players operating in the automotive communication protocol industry are:

• Bosch
• Broadcom
• Continental
• Denso
• Infineon
• Kvaser
• NXP Semiconductors
• Onsemi
• Renesas
• Texas Instruments
   

There are both existing companies and new entrants in the automotive communication protocol market, which shows that the market is quite large and competitive. There is a boom in the usage of electric vehicles (EV), connected cars, and automatic driving technology, which encourages companies to innovate communication protocols that can enable high efficiency and data security exchange between different components of a vehicle. This need for strong yet adaptable communication protocols is pushing up expenditure in R&D. Ethernet-based communication technologies are highly sought after for advanced communication. They allow fast data exchange for infotainment, ADAS, and autonomous driving.
 

Automotive communication protocol market firms are moving to customer-oriented strategies by providing solutions for data cybersecurity, great communication, and very low latency. Businesses are developing protocols such as CAN, LIN, Ethernet, and FlexRay for future expansion because they are finding it more difficult to manage increasing vehicle system complexity. Businesses are also concentrating on making the new protocols more future proof. Moreover, compatibility with relevant standards is becoming more pronounced, including ISO 26262 for functional safety, to make sure regulations are followed.
 

Automotive Communication Protocol Industry News

• In October 2024, Kvaser revealed CanKing 7, a new version of its CAN analysis software, which allows engineers to freely test and debug CAN networks. The revised CanKing 7 also incorporates a modern graphical user interface (GUI), support for Linux on ARM64 and x64 architectures, and enhanced usability with features including CAN Trace, CAN Bus Statistics, CAN Send, and CAN Periodic Send.
   
• In February 2023, Renesas Electronics Corporation (TSE: 6723), one of the major players in the semiconductor solutions industry, developed four new technologies for the system-on-chip (SoC) having in-vehicle communication gateways. These SoCs would be instrumental for the next-generation E/E architecture of automobile systems.
   

The automotive communication protocol market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2021 to 2032, for the following segments:

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Market, By Protocol

• Controller Area Network (CAN)
• Local Interconnect Network (LIN)
• FlexRay
• Media Oriented Systems Transport (MOST)
• Ethernet
• Others

Market, By Vehicle

• Passenger cars
  • Hatchback
  • Sedan
  • SUV
• Commercial vehicles
  • Light Commercial Vehicles (LCV)
  • Heavy Commercial Vehicles (HCV)

Market, By Application

• Infotainment systems
• Powertrain communication
• Body control & comfort systems
• Safety & security systems
• ADAS (Advanced Driver Assistance Systems)
• Autonomous driving systems
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa