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 growth of V2X (Vehicle-to-Everything) communication demands protocols capable of managing external connectivity with infrastructure, vehicles, pedestrians, and networks. This includes integration with 5G networks, smart city infrastructure, and cloud services.
Secure, standardized protocols are essential for enabling real-time traffic updates, remote diagnostics, over-the-air updates, and emergency services communication. For instance, according to GMI, The automotive vehicle-to-everything (V2X) market, valued at over USD 2.5 billion in 2022, is projected to grow at a 25% CAGR from 2023 to 2032. This growth is driven by the development of smart cities and Intelligent Transportation Systems (ITS).
The shift towards electric and hybrid vehicles necessitates advanced communication protocols to handle complex power systems, battery management, charging infrastructure, and energy optimization. These vehicles, equipped with numerous electronic control units (ECUs), require seamless communication to monitor battery health, power distribution, regenerative braking, and thermal management. The increasing complexity of these systems drives the demand for robust, high-speed protocols such as CAN FD and Automotive Ethernet.
Time-sensitive networking is becoming a key solution for real-time communication over Ethernet networks. This technology ensures precise timing and synchronization for safety-critical applications while supporting high-bandwidth data transmission. Consequently, manufacturers are increasingly integrating TSN features into vehicle network designs.
Fr instance, In January 2023, Toshiba introduced the TC9562 and TC9563 Ethernet controllers, designed to support gPTP, IEEE 802.1Qav, IEEE 802.1Qbv, and other critical features for high-bandwidth applications. The TC9562 supports 1Gbps Ethernet, while the TC9563 offers enhanced networking with two ports, each supporting 10Gbps.
The industry is shifting towards service-oriented architectures (SOA) for vehicle networks, enabling more flexible and modular communication systems. This approach enhances resource utilization, simplifies updates, and improves scalability. Additionally, SOA supports the trend of software-defined vehicles and over-the-air updates.
The automotive industry faces challenges due to competing protocols like CAN, LIN, FlexRay, Ethernet, and MOST. This fragmentation complicates seamless communication between vehicle systems. Consequently, manufacturers must invest in interface solutions and protocol converters, increasing development costs and complexity. Additionally, they must maintain legacy systems while transitioning to newer standards.
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 market share and is expected to exceed USD 1.5 billion by 2032.
Standardization efforts in the automotive industry, particularly around CAN and its Flexible Data-Rate variant (FD), are driving market growth. For instance, In January 2024, Bosch integrated the Flexible Data-Rate (FD) with the Controller Area Network. This extension of the original CAN protocol, as specified in ISO 11898-1, meets the increasing bandwidth demands of automotive networks.
Supported by semiconductor manufacturers and end users, industry leaders such as Infineon, NXP, Daimler, and GM endorse CAN FD. These standards ensure interoperability among components from various manufacturers and streamline supply chain management. The widespread integration of area networks in automotive development tools, testing equipment, and diagnostic systems creates a robust ecosystem, encouraging continued use of the protocol.
Based on the vehicle, the automotive communication protocol market is divided into passenger vehicles and commercial vehicles. The passenger vehicles segment is expected to exceed USD 2 billion by 2032. The growing adoption of electric vehicles (EVs) is driving the demand for advanced communication protocols to manage complex powertrain systems, battery management, and energy distribution.
CAN and Ethernet are crucial for ensuring real-time communication between the battery management system (BMS), motor controllers, and other components in EVs. As automakers shift towards electrification, the need for high-bandwidth, low-latency communication networks is increasing, particularly for efficient energy management, regenerative braking, and power distribution.
Zonal architectures are revolutionizing communication protocols in passenger vehicles. Unlike traditional domain-based systems with dedicated control units for functions like powertrain, ADAS, and infotainment, zonal architectures consolidate these units into distributed zones. This approach reduces wiring complexity, weight, and costs while enhancing data transfer efficiency. As automakers transition to software-defined vehicles, Ethernet protocols become crucial for high-speed data transmission between zones. This shift supports increased vehicle electrification and automation, improving system efficiency and scalability.
China automotive communication protocol market accounted for over 35% of the revenue share in 2023. Chinese automakers are rapidly adopting high-bandwidth Ethernet solutions to meet the substantial data demands of advanced driver assistance systems (ADAS) and connected car features. This shift is driven by China's aggressive push toward autonomous vehicle development and the need for faster, more reliable in-vehicle networking, particularly in electric vehicles.
Major automakers and technology firms are increasingly integrating cellular V2X (C-V2X) protocols. C-V2X technology enhances road safety and traffic efficiency by enabling communication between vehicles, infrastructure, and pedestrians. The U.S. is notably advancing in C-V2X testing programs and infrastructure development.
European automakers are adopting hybrid network architectures that combine CAN FD (Controller Area Network with Flexible Data Rate) with Automotive Ethernet. This approach balances the reliability of traditional CAN protocols with the high-speed requirements of modern vehicle systems, especially in premium segments where advanced features demand increased bandwidth.
NXP, Bosch, and Infineon collectively held a substantial market share of over 15% in the automotive communication protocol industry in 2023. NXP has established strategic partnerships with automotive OEMs and Tier 1 suppliers to co-develop solutions for connected and autonomous vehicles, including collaborations with Qualcomm and AWS. NXP prioritizes cybersecurity for in-vehicle networks, focusing on secure communication protocols to prevent data breaches and hacking, which are critical for these vehicles.
Bosch is shifting towards a software-defined vehicle model, where communication protocols are essential. By utilizing software updates and scalable architectures, Bosch aims to offer vehicles greater flexibility and adaptability to new features and regulatory requirements over time.
Infineon focuses on safety-critical applications such as powertrain, braking, and steering systems. Their CAN, LIN, and FlexRay communication systems are central to their strategy for maintaining dominance in these areas.
Major players operating in the automotive communication protocol industry are: