Internet of Vehicles

Internet of Vehicles (IoV) refers to an intelligent network system that treats moving vehicles as sensing nodes and leverages next-generation information and communications technology to establish comprehensive network connectivity between vehicles, infrastructure, pedestrians, and service platforms, thereby enabling the smart collection, dispatch, and management of vehicle, traffic, and location data. The Internet of Vehicles is a quintessential application of Internet of Things (IoT) technology in transport systems, serving as a critical foundation for intelligent connected vehicles (ICVs), smart mobility, and autonomous driving.

Core Concepts

The scope of the Internet of Vehicles has evolved from basic in-car telematics into a comprehensive "Vehicle-to-Everything" (V2X) ecosystem. At its core, vehicles utilise wireless communications to share real-time data—such as GPS tracks, onboard sensor telemetry, and driving behaviour—with the outside world, creating a closed-loop "cloud–vehicle–cloud" data stream that delivers diverse services, including safety warnings, intelligent navigation, and traffic flow optimisation.

The Internet of Vehicles mainly encompasses five key connectivity scenarios:

• Vehicle-to-Vehicle (V2V): Direct inter-vehicle communication exchanging data such as speed, position, and braking intention for collision warnings and vehicle platooning.

• Vehicle-to-Infrastructure (V2I): Direct communication between vehicles and roadside infrastructure (such as traffic lights and roadside units) to receive traffic signal phases, roadwork notices, and hazard warnings.

• Vehicle-to-Pedestrian (V2P): Communication between vehicles and mobile devices carried by pedestrians or cyclists to alert against potential collision risks.

• Vehicle-to-Cloud (V2N/V2C): Connectivity between vehicles and cloud platforms via cellular networks, enabling telemetry uploads, over-the-air (OTA) updates, and live traffic analytics.

• In-Vehicle Network: In-car data communication between onboard electronic control units and devices for vehicle status diagnostics and control.

While Internet of Vehicles (IoV) and Vehicle-Infrastructure Cooperation (V2X) are closely intertwined, their technical emphases differ. IoV focuses on "cloud aggregation and fleet-wide synergy"—routing massive vehicle data to cloud servers via cellular networks to leverage collective intelligence for traffic analytics and algorithm enhancements; conversely, vehicle-road collaboration prioritises "local direct link and edge computing"—utilising C-V2X or DSRC technology for millisecond-level direct communication with roadside units to deliver ultra-low-latency safety alerts. Working in tandem, the two provide a dual layer of protection: high-level cloud intelligence alongside immediate, split-second local fail-safes for autonomous driving.

Technical Architecture

The Internet of Vehicles architecture is typically structured into three distinct layers:

Perception Layer (Sensing Layer) Responsible for raw data acquisition via onboard sensors, RFID tags, cameras, and radars, capturing vehicle telemetry such as location, speed, powertrain status, and surrounding road conditions.

Network Layer (Transmission Layer) Provides data transmission capabilities. The prevailing technology is C-V2X (Cellular Vehicle-to-Everything), spanning LTE-V2X and its evolution towards 5G-V2X, supporting both direct short-range communication (PC5 sidelink interface) and wide-area cellular connectivity (Uu interface). In the first half of 2025, the connected car penetration rate in China's domestic passenger vehicle market reached 83.5%, with 5G penetration hitting 21.8%, and is projected to reach 95% by 2030.

Application Layer Delivers end-user services including navigation, fleet monitoring, infotainment, and remote diagnostics, deployed across telematics control units, edge computing nodes, and cloud platforms.

Industry Landscape and Market Trends

China's IoV industry has entered a phase of rapid, large-scale development. Between January and July 2025, the penetration rate of Level 2 (L2) advanced driver-assistance systems in new passenger cars reached 62.58%, with 5G and C-V2X installations exceeding 3,000,000 units. Nationwide, 17 national-level autonomous driving test demonstration zones have been established, 20 "vehicle-road-cloud integration" pilot cities are accelerating deployment, and over 35,000 kilometres of public test roads have been opened. According to projections by China's National Intelligent Connected Vehicle Innovation Centre, the incremental industry output value generated by "vehicle-road-cloud integration" will reach RM2,582,500,000,000 by 2030, representing a compound annual growth rate (CAGR) of 28.8%.

Looking ahead, key industry trends include: emerging technologies such as 5G-Advanced (5G-A), which will further slash latency and boost bandwidth to support high-tier use cases like remote teleoperation driving; AI and big data analytics, which will play a critical role in predicting traffic flow patterns and roadside optimisation; and cross-brand interoperability, which will be unlocked through standardised protocols and open platforms. Nevertheless, the industry must still navigate key hurdles, including relatively low C-V2X onboard unit penetration, fragmented alignment between roadside infrastructure and vehicle-side applications, and unproven commercial monetisation models.