Vehicle-to-Infrastructure (V2I) Communication Market Trends

Growth Drivers

• Government regulations and smart city initiatives: Around the world, governments are proactively encouraging smart transportation systems under a larger smart city umbrella. Regulatory pressure—such as the European Union’s Intelligent Transport Systems (ITS) directive, or the U.S. Department of Transportation’s V2X initiatives—encourages cities to adopt connected infrastructure. Such directives look to decrease road fatalities, improve urban mobility, and decrease emissions. Increasingly, public-sector investments are going toward roadside units (RSUs), adaptive traffic signals, and communications platforms that enable V2I systems.
• Rising demand for road safety and traffic efficiency: As city traffic increases and automobile accidents continuously become more common, there is greater interest in technology to assist with safety and flow. V2I warns drivers in real-time about traffic signals, road hazards, pedestrian crossings, and much more. This type of active communication between drivers and the roadway through V2I could lead to faster response times and, therefore, a reduced number of accidents. Smart intersections that also rely on V2I can factually reduce signal phases based on traffic volume, enhancing traffic flow and reducing fuel consumption. The ability to combine safety and improved automotive flow represents a significant gain for both legislators and automakers and drives advancements in technology.
•  Advancements in 5G and cellular V2X (C-V2X) technologies: The implementation of 5G networks is considerably advancing the use and performance of V2I communication systems. C-V2X and 5G afford much lower latencies and larger data throughput capabilities than traditional DSRC-based systems, along with the larger coverage areas, making them more suited for mission-critical applications such as autonomous driving and emergency vehicle notifications. With technological advancements in supporting vehicle-to-infrastructure data exchange, real-time decision-making will yield improved data accuracy. As telecommunications providers continue to provide 5G infrastructure around the globe, the efficiencies of V2I systems and their scalability will increase drastically.

Road Safety Financing as a Percentage of Total World Bank Road and Urban Transport Funding (FY19-FY23)

Source: World Bank Group

Challenges

• Infrastructure-protocol mismatch dilemma: The global V2I market has faced a major challenge in the mismatch of infrastructure and protocols. The incompatibility between legacy transportation infrastructure and V2I communication protocols causes an impediment in the market. The mismatch is evident in regions marred with aging public infrastructure, slowing the deployment of V2I systems with lower latencies, causing fragmentation.
• High infrastructure costs and retrofit challenges: V2I systems necessitate high budget commitment for roadside infrastructure (RSUs), sensors, communication modules, and cloud support structures. Many cities operate traffic systems that were built years ago and cannot be added on to V2I systems, thus leading to very costly solutions. Budget and financial restraints, particularly relevant in developing countries, present a significant barrier to widespread implementations of V2I systems. Determining a viable financial mechanism originating from a public sector vs. private sector is also incredibly complex, and lengthens the timelines to implement V2I technology.