Smart tires forecast with a CAGR of 50 percent through 2029

Surrey, UK — Greater vehicle connectivity, advanced driving assistance systems (ADAS), and booming sales of electric vehicles are all contributing to a rapid increase in demand for smart tires that monitor driving and performance metrics.

A suite of mutually supportive technologies are now approaching a commercial inflection point emerging from their first uses in vehicle fleets and ultra-high performance cars, to become viable, value-adding options in multiple premium tire and high-performance segments.

In-depth analysis in the brand new Smithers report – The Future of Connected Tires to 2029 – shows that sales worldwide will top 91,000 units for the first time in 2024, with a value of $23.23 million. Across the next five years value will increase rapidly at a compound annual growth rate (CAGR) of 50.5% driving value to $179.51 million in 2029, at constant prices; with volume sales climbing to 871,000 units.

This reflects the significant investment tire OEMs have made in on-tire sensors, software, and data analytics. These are often concentrated in dedicated connected tire service lines – which will add new revenue streams across the Smithers forecast period and beyond. As this evolution occurs, both OEMs and vehicle operators will increasingly view tires as assets to be prudently managed and monitored, not only for the basic function they provide but for the data they can deliver.

This will be supported by the greater emphasis on sustainable driving, increasingly backed by legislation in key markets such as Europe, the US, and China. These will include mandatory rules for fitting tire-pressure monitoring system (TPMS) to commercial fleets, alongside more general impetus to improve fuel economy and reduce emissions. Connected tires can also enhance the performance of new electric or hybrid vehicles, optimizing range and tire wear, and providing essential data on road conditions to the latest generation of ADAS.

These high-tech tire platforms will be introduced in parallel to existing trends for iterative improvement in durability, rolling resistance, and across all tire segments.

Initial deployments of connected tires have been in commercial fleet applications, more expensive light vehicle, bus and off-road tires; alongside some very high-end, premium passenger car fitments. Smithers market analysis shows that the greatest gains across the next five years will come from high-performance and premium tires for on-road light vehicles, trucks and buses, and motorcycles. Combined these already account for over 85% of contemporary sales.

Connected tires sales are evenly split between passenger and commercial vehicle fitments, but light vehicle unit sales will outstrip those for trucks and buses through to the end of the decade. The value-adding potential of smarter tires mean all tire segments will grow by more than 20% year-on-year across this period, with OE sales supplemented by an increasing number of retrofit sales.

As the technology landscape matures, connected tires will cease being a discrete sub-segment of the tire industry, but instead will rapidly expand to encompass major sensor manufacturers, IT/AI startups, vehicle OEMs, and embrace new mobility concepts. This is lending new momentum to the business strategies of multiple tire companies to diversify, to also become mobility or data service providers. This new complex value chain is examined in detail in the Smithers report, alongside profiles of the leading manufacturers and technology suppliers.

The Future of Connected Tires to 2029 combines expert insight into the market and technology drivers, with exclusive data forecasting for this rapidly developing, and lucrative, segment of the tire industry. Its data set contains over 100 tables and figures, segmenting the connected tires market by:
Tire type – General/standard tires; Specialty/premium tires; OTR tires; Aircraft tires
End-use/vehicle type – Light vehicle; Truck and bus; Motorcycle; Mining, construction & port vehicle; Agricultural; Industrial vehicles; aviation
Geographic region: North America; South & Central America; Europe; Asia-Pacific; Middle East & Africa.
This is contextualized by strategic profiles of the top 15 smart tire manufacturers and leading technology suppliers globally.