The connected vehicle of the future will not only use a standard smartphone cellular connection, but will also leverage specific "V2X" safety communication channels. V2X, short for Vehicle-to-Everything, uses Wi-Fi or cellular technology to facilitate communication with other vehicles and traffic infrastructure. If regulations or safety standards mandate this technology, V2X will become the "digital seatbelt" of the future, promising to reduce accidents, improve congestion, and lower emissions worldwide by enabling vehicle safety systems to communicate with each other and with urban traffic infrastructure, even in torrential rain, dense fog, or crowded parking lots.
Annual sales of V2X connected vehicles are expected to exceed 60 million units by 2034. Source: IDTechEx
The two most popular V2X technologies, DSRC and C-V2X, require different hardware. DSRC is based on Wi-Fi protocols, while C-V2X uses 4G or 5G protocols. Currently, there are approximately one million V2X connected vehicles on the roads worldwide, primarily concentrated in Europe and China. Roughly half the market uses DSRC-based technology (the Volkswagen Golf 8 and ID.X are equipped with ITS-G5 (the EU equivalent of DSRC) in Europe, known as Car2X), and the other half uses C-V2X technology, with most of these vehicles available in China. IDTechEx anticipates a significant market shift towards C-V2X technology, with over 90% of the market using 5G-based C-V2X by 2034. The biggest driver of this shift is regulation: the world's two largest vehicle markets, the US and China, have government organizations actively promoting C-V2X adoption and have formally abandoned DSRC technology. India, Korea, and Japan are likely to follow the international trends set by the US and China. The EU is officially a technology-neutral region but has a robust DSRC/ITS-G5 infrastructure. The EU is likely to maintain technology neutrality, and some C-V2X module vendors offer "Dual RAT" systems that support both C-V2X and Wi-Fi-based V2X technologies, meaning DSRC will retain some market share globally. DSRC+, based on newer Wi-Fi technologies, may have an impact on the market, but IDTechEx's analysis concludes that technological improvements may be too little, too late, and DSRC is a technology that has much less momentum compared to C-V2X.
If a technology is included in a New Car Assessment Program (NCAP), original equipment manufacturers (OEMs) aiming for a high safety rating must incorporate it to pass certain tests. China has announced the inclusion of V2X in the NCAP starting in 2024, which will lead to significant growth for this technology in the country. Many manufacturers aim for a 5-star NCAP rating, as NCAP scores can significantly impact sales. As seen in the past with other safety technologies, such as Automatic Emergency Braking (AEB), inclusion in a national NCAP assessment can be a major driver for the adoption of a new safety technology. For example, AEB went from being included in 5% of new vehicles in 2014 (before being included in the EU NCAP) to being included in 71% of new vehicles in 2021 (seven years after being included in the EU NCAP), according to research by IDTechEx. Some original equipment manufacturers (OEMs), especially those targeting lower price segments, may not prioritize NCAP safety ratings, although certain safety technologies, such as V2X communication, may be included in vehicles if the manufacturer believes the technology will be a significant driver of vehicle sales. Some regional regulatory bodies may mandate V2X technology in all new vehicles.
One of the areas where V2X could have the greatest impact is in autonomous vehicles (AVs). The number and sophistication of sensors in an autonomous vehicle are enormous and increase with the level of autonomy. Vehicles like those in Phoenix or San Francisco currently rely on LiDAR, radar, and cameras for most of their perception. Each sensor performs important functions and ensures robust and safe operation, but these vehicle sensor systems are limited by line of sight. Using DSRC or C-V2X, autonomous vehicles can transmit information at a specific frequency (~5.9 GHz), with V2X acting as an additional sensor that works in all weather conditions and can penetrate walls and obstacles, effectively solving the line-of-sight problem. The main viable method for achieving this is to use V2X to transmit information about each car's location. A connected vehicle receiving this information can calculate the likelihood of a collision with the other vehicle using its onboard computing. If the risk is high, the driver (or passenger of an autonomous vehicle) will immediately receive a warning, and the system will adjust accordingly to safely and effectively avoid a collision. IDTechEx expects V2X connectivity will not become a major factor for autonomous vehicles before 2026. The technology could become mandatory for AVs in certain regions for regulatory reasons, or safety standards such as NCAP could integrate V2X into their tests of advanced driver assistance systems (ADAS), which would also apply to autonomous vehicles.
