Increasing environmental concerns regarding greenhouse emissions along with growing smart cities projects are the prominent factors driving the growth in the smart transportation market
The global smart transportation market was valued at US$ 95.1 bn in 2020 and expected to reach US$ 155.1 bn by 2027, growing at a CAGR of 11.2% during the forecast period.
The major factor driving the demand for the smart transportation market is the growing environmental concerns regarding the harmful effects of greenhouse emissions from the transportation sector. As per the report published by the United States Environment Protection Agency published in 2019, the transportation industry holds the largest share in greenhouse emissions and accounts for 26% of the total greenhouse emissions across the globe. Also, stringent regulations implemented in many major countries for improving fuel efficiency in vehicles are contributing to driving the smart transportation market. For instance, The Corporate Average Fuel Economy (CAFE), a governing body in the U.S. responsible for regulating the average fuel economy of new vehicles sold in the United States has mandated that all passenger vehicles should achieve an average mileage of 54.5 miles per gallon by 2025. The incorporation of smart transportation solutions, such as smart fuels, compressed natural gas, and connected vehicles is immensely helping in decreasing the total automotive carbon emissions and improving environmental safety.
Additionally, smart transportation systems incorporate sensors that help in monitoring the engine and optimizing fuel input based on the need of the engine. It provides optimized routing by taking into account driving behavior, weather conditions, location, road conditions, etc., and thus help in saving fuel. Therefore, smart transportation solutions are widely being adopted to improve the vehicle’s performance by reducing fuel consumption.
The growth in the smart transportation industry is also attributed to the growing urbanization and increasing smart cities projects across the globe. For instance, in May 2020, the Australian Government launched a Smart Cities and Suburbs Program involving an investment of USD 50 million for developing innovative technology-based solutions to urban challenges for Australia’s cities, suburbs, and towns. This program is supporting the delivery of innovative smart city projects that will improve the productivity, sustainability, and liveability of cities and towns across Australia.
Similarly, Dubai Plan 2021 launched by the Dubai government aims at making Dubai a smart and sustainable city. Dubai’s Smart City project aims at transforming about 1000 government services primarily focussed on six key sectors including transportation, communications, infrastructure, urban planning, economic services, and electricity. As, smart transportation is a crucial part of smart cities projects, the growth of such projects is expected to bloom the smart transportation industry.
Global Smart Transportation Market by Region Outlook (Revenue, USD Billion, 2017-2027)
Based on region, Europe has dominated the smart transportation market in the year 2020. Europe is one of the leading regions in terms of infrastructure development and technology adoption. The countries in the region have been majorly investing in the upgrading and modernization of transportation infrastructure. For instance, in January 2021, The European Commission approved fresh funding for continuing work of the European Local Energy Assistance (ELENA) facility. The initiative aims at supporting projects across sustainable transport and energy portfolios. This facility also involves investments in energy efficiency, particularly in street lighting, clean urban transport, buildings, and heat networks. Therefore, increasing government spending on improving the urban transportation sector is the region is expected to bloom the smart transportation market growth. Moreover, major countries from Western Europe, including the U.K, Germany, and France already have well-established transportation infrastructure and are widely incorporating advanced smart transportation solutions, thus driving the smart transportation industry demand. Furthermore, the growing cross-border trade has resulted in rising traffic in the region and thereby leading to an increased need for smart transportation in the European economies.
The Global Smart Transportation Industry Segmentation:
Global Smart Transportation Market by Product Type Outlook (Revenue, USD Billion, 2021-2027)
Global Smart Transportation Market by Application Outlook (Revenue, USD Billion, 2021-2027)
Global Smart Transportation Market by Transportation Mode Outlook (Revenue, USD Billion, 2021-2027)
Company Profiles and Competitive Intelligence
The key players operating in the smart transportation market are: