Commercial Vehicle Telematics Market Update

The information found in this post comes from ABI Research’s Commercial Telematics market data report.

Between the introduction of 5G connectivity and the evolutionary improvements in Artificial Intelligence (AI), the growth trajectory of the commercial telematics market looks very promising. In fact, ABI Research projects there to be 126 million telematics subscriptions by 2027, growing at a Compound Annual Growth Rate (CAGR) of 13.2% between 2022 and 2027.

Besides 5G and AI, other contributing factors to the growing market size of fleet telematics include cold chain tracking and monitoring, lower hardware costs, increased use of smartphones and tablets to collect data, and government regulation. The use of fleet management platforms allows companies—like logistics providers, local delivery, or transportation services—to reduce fuel costs, promote greater driver safety, optimize routes, minimize insurance premiums, lengthen the longevity of vehicles, and more. Some commercial telematics providers see the diversification of data to be integral in building a supply chain digital twin for their customers.

"Continued global disruption related to the COVID-19 pandemic, global supply chain uncertainties, port congestions, and other events have highlighted the need for full end-to-end supply chain visibility. We will continue to see rising telematics adoption in commercial fleets over the next five years and beyond." – David McQueen, Research Analyst, Supply Chain Management and Logistics at ABI Research

Trailer Tracking

Asset management is one of the driving forces behind trailer tracking as it automates supply chains and gets the most out of existing resources. In less mature markets, security is a major reason for new trailer tracking installations. Another way trailer tracking is being used by companies is for keeping tabs on tire pressure with the use of a Tire Pressure Monitoring System (TPMS). Not only does this cut down on fuel costs substantially, but it also prevents tires from blowing out.

Trailer tracking is the smallest market opportunity out of the three main segments ABI Research looked at in its most recent Commercial Telematics market data report (trucking and non-trucking being the other two segments). By 2027, 9.5 million telematics subscriptions will exist in the trailer tracking segment, which is a long way from the trucking and non-trucking segments. The segment will see US$1.4 billion in revenue by the end of the forecast period.

Trucking Telematics

Truck Load (TL) fleets provide transportation distribution services to shippers of large quantities of goods, quantities that will fill or almost fill the truck or trailer, and for full shipments destined for the same physical location. The truck is loaded at one end and does not stop to take on more goods or unload until it has reached its ultimate destination.

In 2011, there were just 7.4 million commercial trucking fleet telematics system subscriptions worldwide. Today, in 2022, there are 26.7 million subscriptions. By 2027, ABI Research expects that number to surpass the 36 million mark and the trucking fleet telematics segment will represent a US$12.9 billion market opportunity. It’s also going to grow at a CAGR of 4.3% between 2022 and 2027.

Non-Trucking Fleets

Non-trucking fleets refer to a wide range of commercial uses, including services (containing utilities), private transportation, construction, government, emergency services, public transportation, and local delivery. The segment offers the greatest revenue opportunity in the commercial telematics market, generating US$13.2 billion in revenue in 2022. Between 2022 and 2027, this segment will grow at a CAGR of 15.7% and become a market size of US$27.4 billion. There will also be more than 80 million telematics subscriptions from non-trucking customers in 2027. Breaking it down further, the following summarizes the top three non-trucking verticals.

Services (containing utilities): 4.3 million subscriptions in 2022; growing at a CAGR of 17.2% between 2022 and 2027; 9.4 million subscriptions by 2027.
Construction: 940,000 subscriptions in 2022; growing at a CAGR of 14.6% between 2022 and 2027; 1.9 million subscriptions by 2027.
Government: 1 million subscriptions in 2022; growing at a CAGR of 12.2% between 2022 and 2027; 1.8 million subscriptions by 2027.

Regional Forecasts for Commercial Telematics

The top three markets for fleet management systems are Asia-Pacific, the United States, and Western Europe.

Asia-Pacific

With 27.3 million subscriptions and US$9.6 billion in revenue, Asia-Pacific has the largest market size in commercial fleet management. By 2027, Asia-Pacific customers will account for 57.3 million commercial telematics subscriptions, resulting in US$18.9 billion in revenue that year.

North America

North America has 14.9 million subscriptions, representing a US$5.6 billion revenue opportunity for fleet telematics players. In 2027, those figures will grow to 24.4 million subscribers and US$8.4 billion in revenue.

Western Europe

Western European customers account for 10 million of the 67.6 million commercial telematics subscribers worldwide in 2022. While the region will generate US$3.9 billion in revenue this year, that number will surpass US$5 billion by 2027, thanks to the 15.2 million subscribers that year.

Download the report to learn about other regional opportunities, key market players, hardware segments, and more.