Smart Transportation Market Size - By Component, By Transportation Mode, By Solution, By Technology, By End Use, Analysis, Share, Growth Forecast, 2025 - 2034

Smart Transportation Market Size

The global smart transportation market was valued at USD 124.6 billion in 2024 and is projected to grow at a CAGR of 12.8% between 2025 and 2034. The sharp increase in urbanization and the ever-growing congestion are the major factors fueling the market growth as more cities grapple with growing traffic, pollution, and issues related to mobility. Since over 55% of the global population is concentrated in urban centers, increased ownership of vehicles has brought about severe traffic congestion, longer commuting hours, and greater emission of carbon dioxide.
 

For example, in February 2024, Our World in Data issued a report about urbanization, which states “‘more than half of the world’s population now live in urban areas – increasingly in highly dense cities.’ Furthermore, there is rapid growth of urban population in every region of the world (in 1800, less than 10% of people in all regions lived in urban places).’”
 

The increasing demand for connected and autonomous vehicles (CAVs) greatly contributes to the smart transportation market as advanced traffic management, V2X communication, and real-time data analytics are essential components. CAVs utilize AI, IoT, and 5G networks to communicate with the already built smart infrastructure for safer and more efficient transportation.
 

As an example, in February 2025, Jaguar Land Rover (JLR) declared the allocation of 180 million dollars into their technology center located in Portland, Oregon. Such funds will be put to use over the next ten years in order to design advanced driver assistance systems and self-driving features for JLR cars.
 

Looking at a different example, in November 2024, the municipality of Beijing began a pilot project aimed at integrating intelligent connected vehicles with road and cloud infrastructure. This “vehicle-road-cloud integration” system is intended to enable the development of smarter, more efficient, and safer transportation systems using 5G, edge computing, and similar technologies.
 

Smart Transportation Market Trends

• The integration of IoT and AI combined with big data analytics facilitates monitoring, predictive analytics, and automation which will impact the smart transportation industry growth. In addition, IoT sensors alongside V2X collect information regarding traffic congestion, the state of the road, and the movement of vehicles that aid in traffic control management.
   
• For instance, the global automotive V2X market is 4.1 billion in 2024 and is likely to grow at a CAGR of 25.1%, reaching a worth of USD 34.2 Billion by 2034. Autonomous vehicles and other connected vehicles adopting V2X technology will significantly contribute to the market for intelligent transportation systems.
   
• To inform policymakers, AI is vital in performing big data analytics for Mobility As A Service (MaaS), fleet optimization, and personalized travel scheduling. In addition, urban smart adaptive traffic control, smart parking, and automated fare collection systems powered by AI further improve transport productivity.
   
• A smart parking app that enables advanced bookings and payments of parking slots was launched in February 2025 by the Brihanmumbai Municipal Corporation (BMC) to reduce traffic congestion within Mumbai. This is one of the many steps BMC is making towards better smart transport and urban sustainability.
   

Smart Transportation Market Analysis

Based on component, the smart transportation market is divided into hardware, software, and services. In 2024, the hardware segment dominated the market generating revenue of USD 59 billion and the hardware segment is expected to grow at a CAGR of around 13.2% during the forecast period.
 

• The most crucial elements of hardware devices include GPS, IoT sensors, RFID chips, cameras, automated fare collecting systems, and V2X communication devices for Real Time Traffic Monitoring Systems, Connected Vehicles Systems, and Intelligent Transport Systems ITS.
   
• For example, in March 2024, Florida Department of Transportation granted permission for state-wide use of an AI-based traffic management system called NoTraffic. NoTraffic attempts to predict traffic congestion and then uses artificial intelligence coupled with computer vision to optimize the traffic flow in peak times. In other words, on top of smart sensors, AI-software is used to regulate traffic flow during peak hours.
   
• There is strong investment by the governments and transport authorities towards the embedded system components of smart city initiatives of smart traffic signals, surveillance cameras, electronic toll collection, and vehicle tracking systems. Furthermore, migration towards autonomous and connected vehicles is also strongly contributing to the growth of the industry.
   

Based on transportation mode, the smart transportation market is segmented into roadways, railways, airways, and maritime. In 2024, the roadways segment dominates the market with 53% of market share and is expected to grow at a CAGR of over 13% from 2025 to 2034.
 

• The increasing adoption of electric and self-driving vehicles prompts the use of AI powered traffic management and forecasting systems. Ride hailing services such as Uber and Lyft also play a major part in the sector. More so, the extensive global urban road network combined with rising urbanization creates a need for modern traffic systems and smart mobility solutions.
   
• For instance, in January 2025, Switzerland revealed plans to implement a self-driving bus service in Furttal public transportation region and aimed to roll it out by Spring 2025. The goal of the initiative is to enhance transport in rural regions, while also improving access to public transport. The initiative is a partnership involving the canton of Zurich, Swiss Federal Railways (SBB), and The Swiss Transit Lab. The vehicles provided by Nissan are equipped with WeRides automated driving technology.
   

Based on the solution, the smart transportation market is segmented into traffic management, smart ticketing, parking management, passenger information systems, and freight management, with the traffic management category expected to dominate due to rising urban congestion, increasing vehicle numbers, and the need for efficient mobility solutions.
 

• The adoption of International Traffic Systems, AI Traffic control and Adaptive Traffic Control Systems is meant to reduce delays and emission output. Solutions like tracking traffic flow in real-time, congestion pricing, and automatic incident detection improve road safety and road performance.
   
• As an example, Dubai's Roads and Transport Authority (RTA) launched in July 2024 a pilot project with an AI-assisted vehicle designed to automatically determine road data such as damage to roads and inspect the placements of traffic diversions. This is part of RTA’s plan for enhancing and ensuring better road network and traffic safety in Dubai by using AI.
   
• The AI-equipped unit takes images, uses sensors and detection devices to assess damage to the road infrastructure. Then it prepares a report and submits it to the system.
   

In 2024, the North America region dominated the smart transportation market with around 33% market share and generates around USD 42 billion in revenue.
 

• The smart transportation market in the United States is experiencing substantial growth due to government policies, advancement of technology and urban development. Adoption of ITS, connected vehicles and AI-powered mobility solutions are gaining traction due to federal funding like the Bipartisan Infrastructure Law passed in 2021. New York, Los Angeles, and Chicago are implementing smart tolling, adaptive traffic signals, and Mobility-as-a-Service (MaaS) platforms.
   
• In November 2024 L&T Technology Services (LTTS) entered into a cooperative agreement with the Colorado Smart Cities Alliance (CSCA) to promote the development of smart cities in Colorado. This partnership aims to deploy technology in a way that improves life in metropolitan regions in an innovative and sustainable manner.
   

The smart transportation market in Germany is expected to experience significant and promising growth from 2025 to 2034.
 

• The market for smart transportation in Germany is advanced by programs such as “Smart City Charter”, and “Digital Rail for Germany” which enhance the intelligent mobility ecosystem. As a European country, Germany is at the forefront of connected cars, self-driving vehicles, and the AI-enhanced management of road traffic. Further, massive spending on smart railways, electric mobility, and IoT-enabled public transport systems ensures better effectiveness and sustainability of services.
   
• As an example, in February 2025, Hitachi Rail executed one prominent framework arrangement with Deutsche Bahn focused on building a digital railway infrastructure of Germany. This digitization effort is a constituent of the greater €6.3 billion framework agreement for transforming the German railway systems. This partnership elevates Hitachi Rail to a strategic technology ally for Deutsche Bahn and gives them a great degree of participation in the improvement of the Germany railway system.
   

The smart transportation market in China is expected to experience significant and promising growth from 2025 to 2034.
 

• Driven by AI, IoT, and 5G acceleration in mobility solutions, China is quickly expanding its urban centers, which, along with government smart city initiatives, propels the country within the top tier of the smart transportation market. Expansion of high-speed trains, autonomous traffic control systems, and smart tolling systems are some of the flagship projects which also help in increasing market opportunities. China's autonomous vehicle and V2X communication investment is already fueled by companies like Huawei, Baidu, and Alibaba Cloud.
   
• AEye, Accelight Technologies (ATI), and LighTekton Co formed a consortium in May 2024 for the distribution of AEye's autonomous freight and railway safety 4Sight lidar solutions in China. AEye has also enhanced its 4Sight platform, which is a Ultra Long Range solution designed for improved public transportation safety and efficiency, making it more suitable for China’s needs.
   

The smart transportation market in Saudi Arabia is expected to experience significant and promising growth from 2025 to 2034.
 

• Saudi Arabia is focusing on the construction of Smart Cities and sustainable mobility services which in turn is fostering investment in AI based traffic management systems, smart metro, and autonomous vehicle infrastructure. This initiative is a byproduct of the Vision 2030 strategy that is meant to facilitate the growth of the smart transportation market. Adoption of smart technologies is being powered by JEOM, Riyadh Metro, and the modernization of Jeddah public transport.
   
• As an example, KOTRA organized "Saudi Arabia Smart City Roadshow 2024", which was done in Riyadh in October 2024. This roadshow was organized in conjunction with the initiative from the Ministry of Land, Infrastructure and Transport of South Korea to promote smart city technologies and products to Saudi Arabia.
   

Smart Transportation Market Share

• Top 7 companies of the smart transportation industry are Huawei Technologies, Siemens Mobility, Thales Group, Hitachi, IBM, Cisco Systems, and NEC Corporation holding around 14% of the market in 2024.
   
• Huawei’s core business is combining 5G, AI, and IoT for smart transportation. The company delivers cloud traffic management services, V2X communication, and intelligent city platforms. It partners with government agencies and transport operators to improve autonomous mobility and smart road systems that manage traffic and alleviate congestion.
   
• Siemens Mobility has developed products for servicing the digital railway and infrastructure systems which solve the problem of automated train operation, intelligent maintenance, and advanced signaling (AI solutions). The firm sells Mobility as a Service (MaaS) that combines transport systems of different authorities and businesses. Siemens uses cloud technology to monitor and control rail electrification to improve efficiency and integration of urban transport with other services.
   
• Thales applied AI, cybersecurity, and IoT technologies to create smart ticketing, automatic fare collection, and passenger information systems. It uses advanced CBTC signaling for trains and autonomous trains to improve railway operations. With comprehensive expertise in cybersecure transportation networks, Thales provides mobility solutions between cities and urban centers globally while preserving safety and efficiency.
   

Smart Transportation Market Companies

Major players operating in the smart transportation industry are:

• Alstom SA
• Bentley Systems
• Cisco Systems
• Cubic
• Hitachi
• Huawei Technologies
• IBM
• NEC Corporation
• Siemens Mobility
• Thales Group
   

Best performers in the smart transportation market take advantage of multiple opportunities, for instance the formation of partnerships or collaboratives, mergers and acquisitions, launching new products and innovating existing ones, as well as investments in additional research and development. This process aids in the overall assimilation of new aspects and technologies. In the same manner, the business combination of manufacturers through mergers or acquisitions facilitates an improved market reach, available resources, and the innovation of the offerings.
 

Smart transportation companies emphasize on digitization, sustainability, and automation for improved urban mobility. They spend on AI traffic management, IoT infrastructure, and real time data analytics for optimized transportation efficiency. The introduction of electric and autonomous vehicles with smart ticketing is a major strategy. Knowing how to expand intelligent transport networks, public-private partnerships are utilized. There is also greater investment in cybersecurity and data privacy. This guarantees safety and security. Moreover, emphasis is placed on innovative mobile applications that offer Mobility as a Service (MaaS) for integrated, multi-modal transportation.
 

Smart Transportation Industry News

• In January 2025, Hanoi University of Science and Technology (HUST) entered a Memorandum of Understanding (MoU) with West Japan Railway Company (JR West) for the purpose of promoting research and high-tech applications integration into intelligent transportation systems with special attention to artificial intelligence. This partnership seeks to mitigate the skills gap in the railway industry through training opportunities for exceptional IT and AI students, thus assisting JR West’s digital transformation.
   
• In December 2024, Thales partnered with Avinor to deploy a new generation unmanned traffic management (UTM) system throughout Norway for the purpose of improving airspace management for unmanned and manned aircraft within the country. This project is intended to address the European drone regulatory framework and drone industry’s scalability challenges. The system will enable and ensure real-time data sharing, monitoring of airspace compliance, and automatic integration into the controlled airspace for efficient air traffic management.
   
• In October 2024, Talaat Moustafa Group (TMG) collaborated with Huawei to promote smart city development in Egypt through the application of modern technologies to urban life Moustafa TMG has partnered with Huawei to work on smart city projects in Egypt. It was established to combine and make efficient the rural areas of cities. The focus of this collaboration is to integrate sustainable technologies into Egypt’s urban environment. TMG wants to use Huawei's knowledge and skills in the field of telecommunications and information technology for providing urban services such as transport, energy, and even public safety.
   
• In October 2024, the Tasmanian Government awarded Cubic Transportation Systems a contract for the provision of a smart ticket solution in the state's public transport system. This multi-year program of a new contract is meant to improve the efficiency of public transport in the state of Tasmania. The new system allowed multiple transport operators to use integrated fares to facilitate transfer and fare capping.
   

The smart transportation market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2021 to 2034, for the following segments:

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Market, By Component

• Hardware
  • Sensors
  • Cameras
  • RFID chips
  • GPS device
  • Others 
• Software
  • Traffic management systems
  • Fleet management software
  • Others
• Services
  • Consulting
  • Deployment & integration
  • Support & maintenance

Market, By Transportation Mode

• Roadways
• Railways
• Airways
• Maritime

Market, By Solution

• Traffic management
• Smart ticketing
• Parking management
• Passenger information systems
• Freight management

Market, By Technology

• IoT
• AI & machine learning
• Big data analytics
• Cloud computing
• Blockchain

Market, By End Use

• Government agencies
• Commercial businesses

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

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