By 2028, connectivity technology’s penetration rate will reach 80% in electric two-wheelers (e2Ws) and 60% in internal combustion engine (ICE) two-wheelers (2Ws).
From basic smartphone pairing to sophisticated vehicle-to-everything (V2X) systems, the journey toward a fully connected two-wheeler ecosystem is well underway. As smartphone penetration among younger demographics increases and electric two-wheelers (e2Ws) become more widespread, the demand for seamless integration of technology into the riding experience is set to grow exponentially.
Over the next five years, this technological wave will reshape the two-wheeler market, offering new revenue streams and reshaping how consumers interact with their vehicles. By 2028, connectivity technology will reach 80% penetration in E2Ws and 60% in internal combustion engine (ICE) two-wheelers, significantly improving rider safety, efficiency, and convenience.
To learn more, please access: Growth Opportunities in Connectivity Technology in the Two-wheeler Market, 2024-2028, Global Two-wheeler Growth Outlook 2024, Strategic Analysis of Battery Chemistries in Electric Two-wheelers and Growth Opportunities, or contact sathyanarayanak@frost.com for information on a private briefing.
Tethered vs. Embedded Connectivity
One of the primary growth areas in two-wheeler connectivity lies in the shift from tethered to embedded technology. Historically, tethered systems dominated the market, particularly in flagship motorcycles. These systems, which rely on a rider’s smartphone to connect to the bike via Bluetooth or WiFi, offer limited functionality but are relatively inexpensive. For ICE two-wheelers, particularly entry-level models, this cost-effective solution remains popular.
However, embedded connectivity technology is rapidly gaining ground, especially in e2Ws. Unlike tethered systems, embedded solutions use a telematics control unit (TCU) with an embedded SIM (eSIM), allowing the vehicle to remain connected 24/7 without relying on the rider’s smartphone. This continuous connection opens the door to a broader range of services, including real-time diagnostics, geofencing, and over-the-air (OTA) updates. As e2Ws are typically more software-centric, this shift to embedded connectivity aligns perfectly with their advanced architectures.
In the coming years, embedded connectivity will become the standard for premium two-wheelers, enabling OEMs to offer feature-rich, subscription-based services. Meanwhile, tethered systems will continue to cater to budget-conscious riders in the ICE segment, ensuring connectivity solutions are available across all price points.
Source: Frost & Sullivan
Key Trends Shaping the Ecosystem
As smartphones become ever more central to daily life, two-wheeler connectivity has evolved to offer greater integration with mobile devices. Riders can now control calls, music, and navigation through their bike’s dashboard, minimizing distractions while on the road. This integration will deepen as app-controlled safety and security features—such as crash detection and remote diagnostics—become standard in future models.
The influence of social media also plays a key role in shaping consumer preferences. With more people using social platforms to share their riding experiences, companies are leveraging this trend to introduce innovative features, including real-time ride statistics and route optimization.
The rise of e2Ws presents an opportunity to develop data-driven business models. As more e2Ws hit the road, OEMs are on track to gather valuable insights from the data these vehicles generate. This information can be used to improve product development, streamline maintenance services, and even create new revenue streams through data monetization.
Additionally, as V2X communication technology matures, two-wheelers will become part of a larger connected mobility ecosystem. This will enhance rider safety by enabling low-latency sensor data transmission, improving vehicle-to-vehicle and vehicle-to-infrastructure communication.
Source: Frost & Sullivan
Safety remains a top priority for connected two-wheelers, particularly in regions like Europe and North America, where demand for advanced safety features is growing. Embedded sensors, coupled with real-time data analytics, will enable automatic crash detection and emergency call services. OTA updates will further enhance safety by keeping security features up to date, protecting against cyberattacks, and ensuring that vehicles remain compliant with new regulations, such as the European Union’s UNECE/R155 cybersecurity standards, which takes effect in 2024.
Our Perspective
As the two-wheeler market rapidly evolves, the e2W segment is set for substantial growth, driven by start-ups and the entry of traditional OEMs. This dynamic environment presents a prime opportunity for connectivity technology to thrive. To capitalize, stakeholders must prioritize developing telematics solutions tailored to fleet operators, ride-sharing platforms, and last-mile delivery services. Offering features such as GPS tracking, geofencing, and predictive maintenance will streamline fleet management while improving operational efficiency and safety.
The data generated by connected two-wheelers holds significant monetization potential. OEMs and service providers can leverage this by offering subscription-based services with personalized navigation, vehicle diagnostics, and infotainment options. By embracing advanced data analytics and integrating V2X technologies, companies can enhance rider experience, making journeys safer, more efficient, and enjoyable.
The increasing integration of connectivity with two-wheelers will underline the importance of safety and security. Developing systems for automatic crash detection, real-time ride monitoring, and emergency assistance will not only safeguard riders but also foster trust and loyalty. Moreover, the increasing importance of cybersecurity will require continuous collaboration among OEMs, telematics providers, and regulators to ensure robust protection of these advanced systems.
The future of two-wheelers is undeniably connected. From smartphone integration to advanced V2X communication, the next five years will see rapid advancements in two-wheeler connectivity. By 2028, this technology will be a fundamental part of both e2Ws and ICE 2Ws, reshaping the industry and offering new opportunities for growth. Companies operating in this space will need to invest in connectivity solutions that enhance rider experience, improve safety, and create new business models that capitalize on the immense potential of data-driven mobility.
With inputs from Amrita Shetty, Senior Manager, Communications & Content –Mobility
