Smart Highway Market Size, Share & Industry Analysis, By Component (Hardware, Software, and Services), By Technology (IoT Sensing Networks, Edge Computing, and V2X Communication), By Application (Traffic Monitoring and Management, Incident Detection and Emergency Response, Weather and Environmental Monitoring, and Others), By End User (Government and Highway Authorities, Municipal Transport Agencies, and Toll Road Operators), and Regional Forecast, 2026 – 2034

The global smart highway market size was valued at USD 19.47 billion in 2025. The market is projected to grow from USD 21.20 billion in 2026 to USD 47.14 billion by 2034, exhibiting a CAGR of 10.5% during the forecast period.

Smart highway refers to roadway infrastructure improved with communication systems, connected sensors, and data analytics platforms to monitor traffic, improve safety, optimize operations, and enable real-time interaction between roads and vehicles. It includes technologies such as IoT sensing networks, V2X communication, edge computing, traffic management software, and related services deployed across highways and expressways. Market growth is driven by the increasing technological advancements and a surge in government initiatives to modernize transportation infrastructure.

Key industry players, such as Kapsch TrafficCom, Yunex Traffic, Indra, SWARCO, and Conduent Transportation, are scaling their market presence through long-term public sector contracts. These companies typically deliver end-to-end smart highway solutions, supported by continuous operations and maintenance services, often in partnership with telecom operators, cloud service providers, and civil industry. This integration approach provides corridor-wide deployments for end-users.

IMPACT OF GENERATIVE AI

Rising Traffic Data Complexity Driving Adoption of Generative AI in Smart Highways

Generative AI is speeding up the deployment of smart highways by enabling real-time situation summaries, recommended response actions, and predictive alerts for traffic management centers.  These capabilities are powered by the ability to process large volumes of information from multimodal sources. Examples of multimodal data include CCTV footage, sensor data, incident logs, and work zone notes, which allow traffic management centers to improve their prioritization of incidents and the effectiveness of the highway corridors. For instance,

• In May 2024, Caltrans cited nearly 36 million registered vehicles and more than 50,000 miles of highway and freeway lanes in California when announcing its GenAI effort.

In addition, generative AI is enabling improved asset management and work order creation for the maintenance and repair of critical roadside equipment by converting inspection images and field notes into structured defect records, work orders, and risk assessments, allowing for increased uptime of these critical assets. While adopting Generative AI, organizations would also be increasing the requirements for implementing cybersecurity and establishing data governance and model assurance processes within safety-critical environments.

SMART HIGHWAY MARKET TRENDS

Growing Focus on End-to-End Connectivity Across Long Highway Sections Boosted Market Development

V2X technology is moving from pilot programs to corridor-scale deployment as transportation agencies increasingly prioritize interoperable, end-to-end connectivity across long highway sections. This shift ensures that safety messages and alerts work consistently as vehicles travel across jurisdictions, rather than being limited to isolated test zones. For instance,

• In October 2023, in the U.S., the Federal Highway Administration (FHWA) opened a USD 40 million grant opportunity to accelerate and spur new V2X deployments.
• In October 2024, the European Union is marking a similar development trend with its CDL project. Their annual CDL Deployment Overview indicates that twelve European Union Member States are now committed to implementing CITS systems with a high degree of interoperability.

The same report noted that C-ITS deployments are moving from pilot phase status to operational model status in over fifty cities, underscoring Europe’s shift toward scalable, production-level V2X infrastructure.

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MARKET DYNAMICS

MARKET DRIVERS

Increasing Traffic Congestion and Demand for Efficient Mobility Drives Market Growth

Heavy traffic congestion is a significant driver accelerating the use of smart expressways. Stop-and-go traffic limits the amount of traffic flow through a given corridor and results in unpredictable travel times, reducing the effectiveness of traditional capacity expansion strategies. In response, transportation agencies have turned to investing in real-time monitoring systems, faster incident response, and adaptive control, including ramp metering and variable speed limits. For instance,

• In January 2025, TomTom’s Traffic Index demonstrated a continuing trend of urban slowdowns, demonstrating that in New York City, the average time to travel 10 km was 31 minutes in 2024.
• A study conducted by the Texas A&M Transportation Institute in June 2024 indicated that, as traffic congestion has increased to pre-pandemic levels, the Urban Mobility Report released in 2023 showed that American commuters were stuck in traffic for an average of 54 hours in 2022, comparable with the same finding for 2019.

Together, these trends strengthen the business case for smart highway systems by managing real-time traffic demand and optimizing highway traffic flow via data-driven operations, rather than relying only on new lane construction.

MARKET RESTRAINTS

High Initial Costs Requirement May Hinder Market Growth

Smart highways are often faced with an initial high capital investment, which restrains adoption, as public agencies must invest heavily upfront in required hardware, including sensors and roadside units, all the required communications networks, power infrastructure, and the integration of all these components prior to any operational benefits can be realized. Additionally, there are ongoing costs associated with software updates, cybersecurity, calibrating the devices, and replacing all field devices exposed to extreme operating conditions. These ongoing operations and maintenance obligations increase the total cost of ownership and place undue strain on public agency budgets over an extended project lifecycle.

Therefore, many agencies or authorities delay deploying smart highway systems or limit deployment, especially when funding availability is prioritized for the construction and maintenance of traditional roads over digital infrastructure upgrades.

MARKET OPPORTUNITIES

Rising Demand for Smart Tolling and Road Pricing Models to Create Lucrative Opportunity for Market Growth

Smart tolling and road pricing models offer significant growth potential for smart highway infrastructure development. As more jurisdictions, such as the State Highway Administration in New York City, transition from manual to digital collection methods, there will be an increase in both the predictability of funds generated for roadway improvements and the efficiency of roadway utilization. For instance,

• In New York, the first U.S. congestion pricing program was officially launched in January 2025. State officials estimate that congestion pricing would generate approximately USD 500 million in revenue in 2025, which will be used to help fund an estimated USD 15 billion worth of transit improvements.
• Singapore is also transitioning toward advanced vehicle-to-infrastructure (V2I) road pricing programs, with the Singapore Land Transport Authority announcing that every new vehicle registered after May 1, 2024, will include a pre-installed electronic road pricing (ERP) unit.

Overall, these models expand recurring revenue pools for vendors through gantries and roadside equipment, enforcement and back-office platforms, interoperability services, and long-term operations and maintenance.

Segmentation Analysis

By Component

Heavy-Infrastructure Deployments to Drive Hardware Segment Growth

Based on component, the market is divided into hardware, software, and services.

Hardware is anticipated to account for the largest smart highway market share. This is owing to the fact that smart expressways involve heavy infrastructure deployments, requiring extensive installation of sensors, cameras, traffic control devices, tolling equipment, and roadside communication units across corridors. These field components represent high one-time capital expenditure per kilometer and are deployed before software and service layers can scale.

Software is anticipated to grow at the highest CAGR of 12.6% over the forecast period. This is owing to highway operators increasingly adopting analytics, AI-driven traffic management, and cloud-edge platforms to extract more value from existing hardware and support real-time, data-driven operations at scale.

By Technology

IoT Sensing Networks Segment Led due to Highway Projects

Based on technology, the market is categorized into IoT sensing networks, edge computing, and V2X communication.

In 2025, the IoT sensing networks dominated the global market. This is due to highway projects that depend on widespread deployment of traffic, weather, and pavement sensors to generate the real-time data needed for monitoring and control. These sensing layers form the foundational data infrastructure, making them the first and most extensive technology implemented across highway corridors.

V2X communication is expected to grow at the highest CAGR of 13.3% over the forecast period, as governments and highway authorities scale corridor-level deployments to support connected vehicle safety use cases and prepare infrastructure for automated mobility.

By Application

Traffic Monitoring and Management Segment due to Investments Made in Intelligent Highways

Based on application, the market is segmented into traffic monitoring and management, incident detection and emergency response, weather and environmental monitoring, and others (smart tolling).

Traffic monitoring and management dominated the market in 2025, as it is the core function of smart highways, allowing for a real-time view of traffic flow, congestion, and accidents along the length of corridors. Most investments made in intelligent highways have been directed at the installation of traffic monitoring and management systems first, as they deliver immediate operational benefits such as improved safety, faster incident response, and optimized road utilization.

Others (smart tooling) is projected to grow at the highest CAGR of 13.0% over the forecast period, as governments expand electronic toll collection, congestion pricing, and distance-based charging to improve revenue efficiency and manage demand on busy highway corridors.

By End User

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Government and Highway Authorities Segment to Lead Owing to Growing Investments In Traffic Management

Based on end user, the market is classified into government and highway authorities, municipal transport agencies, and toll road operators.

Government and highway authorities are anticipated to witness a dominating market share over the forecast period. They own, operate, and regulate most highway infrastructure and therefore lead investments in traffic management, safety systems, and digital upgrades. Public funding programs and national ITS initiatives are further boosting smart highway spending within these entities.

Toll road operators are anticipated to grow at the highest CAGR of 12.1% during the forecast period. They increasingly invest in smart tolling, traffic optimization, and analytics-driven operations to maximize revenue efficiency, improve user experience, and meet performance obligations under long-term concession models.

Smart Highway Market Regional Outlook

By geography, the market is categorized into North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America

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North America held the largest smart highway market share in 2024, valued at USD 6.24 billion, and also maintained the leading share in 2025, with USD 6.68 billion. The market in the region is expected to increase owing to the early adoption of smart transportation systems, widespread installation of electronic tolls, and significant government funding for highway upgrades. The combination of an extensive and developed road network, modern digital technologies, and federal and state funding also solidified the region's lead in the market. For instance,

• In April 2024: Ohio Turnpike launched a USD 250 million toll collection modernization (open-road tolling) and reported 74% of drivers use E-ZPass on the corridor.

U.S Smart Highway Market

Based on North America’s strong contribution and the U.S. dominance within the region, the U.S. market can be analytically approximated at around USD 5.66 billion in 2026, accounting for roughly 26.7% of global smart highway sales.

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Europe

Europe is projected to record a growth rate of 9.6% in the coming years, which is the second-highest among all regions, and reach a valuation of USD 5.85 billion by 2026. Strong government backing for cooperative intelligent transport systems and coordinated cross-border corridor deployments focused on safety and interoperability are fueling smart highway market growth in Europe. Additionally, ongoing public funding of digital road infrastructure and the ongoing growth of smart tolling, traffic management, and Vehicle-to-Everything (V2X) initiatives across all EU countries are increasing the pace of adoption.

U.K Smart Highway Market

The U.K. market in 2026 is estimated at around USD 1.09 billion, representing roughly 5.1% of global smart highway revenues.

Germany Smart Highway Market

Germany’s market is projected to reach approximately USD 1.15 billion in 2026, equivalent to around 5.4% of global smart highway sales.

Asia Pacific

Asia Pacific is estimated to reach USD 5.47 billion in 2026 and secure the position of the third-largest region in the market. This is owing to governments and operators accelerating highway network expansion and modernization, creating a large installed base that needs sensing, traffic management, and smart tolling layers. For instance,

• China reported 184,000 km of expressways by end-2023 and India’s NHAI constructed 5,614 km of national highways in FY 2024–25, which is further evidence of sustained growth in corridor development, which in turn creates an increase in the number of countries that can now implement smart highway solutions.

In the region, India and China are both estimated to reach USD 0.74 billion and USD 1.16 billion, respectively, in 2026.

Japan Smart Highway Market

In Japan, the market in 2026 is estimated at around USD 1.03 billion, accounting for roughly 4.9% of global smart highway revenues. This is owing to the country upgrading its mature expressway infrastructure with advanced monitoring, traffic optimization, and incident management systems to improve safety and reduce congestion in dense urban corridors.

China Smart Highway Market

China’s market is projected to be one of the largest worldwide, with 2026 revenues estimated at around USD 1.16 billion, representing roughly 5.5% of global sales.

India Smart Highway Market

In India, the market in 2026 is estimated at around USD 0.74 billion, accounting for roughly 3.5% of global smart highway revenues.

South America

South America is expected to witness moderate growth in this market during the forecast period. The market is set to reach a valuation of USD 1.10 billion in 2026. This is owing to governments modernizing existing road networks and expanding electronic tolling and traffic management systems to improve safety and efficiency on high-traffic corridors.

Middle East and Africa

The Middle East & Africa is estimated to reach USD 1.58 billion in 2026 and is expected to grow at a prominent rate in the coming years. The governments are significantly investing in major roadway projects to enhance the safety, efficiency, and management of their assets on these newly constructed roadways. Additionally, the development of smart cities and the implementation of public/private partnerships in the Gulf Region are driving the development of intelligent traffic management systems, electronic toll collection, and connected corridor technology. In the Middle East & Africa, the GCC is set to reach a value of USD 0.50 billion in 2026.

COMPETITIVE LANDSCAPE

Key Industry Players

Focus on Expanding Product Portfolio by Key Players to Propel Market Progress

The global market holds a semi-consolidated market structure, constituting prominent players such as Kapsch TrafficCom, Yunex Traffic, Indra, SWARCO, and Conduent Transportation holding significant positions. The strong market presence of these companies is supported by continuous strategic initiatives, including the integration of V2X communication, expansion of intelligent transportation system portfolios, smart tolling platforms, and advanced traffic management solutions, along with partnerships involving telecom operators, cloud providers, and infrastructure developers. For instance,

• In August 2024, Yunex Traffic announced the expansion of its connected traffic and V2X solutions portfolio to support corridor-scale deployments across Europe and North America, focusing on interoperable roadside infrastructure and adaptive traffic control for highways and tunnels.

Other notable players in the global market include Q-Free, TransCore, EFKON (STRABAG Group), Cubic Transportation Systems, and Serco. These companies are expected to emphasize new product launches, digital traffic platforms, and long-term operations and maintenance service models to strengthen their market positioning and expand their global footprint.

LIST OF KEY SMART HIGHWAY COMPANIES PROFILED

• Kapsch TrafficCom (Austria)
• Yunex Traffic (Germany)
• Conduent Incorporated (U.S.)
• Indra (Spain)
• SWARCO (Austria)
• Q-Free (Norway)
• TransCore (U.S.)
• EFKON (STRABAG Group) (Austria)
• Cubic Transportation Systems (U.S.)
• Serco(U.K.)

KEY INDUSTRY DEVELOPMENTS

• December 2025: Indra announced it completed end-to-end testing and operational implementation of V2X tolling on North Carolina’s I-485, positioning it as a live-highway benchmark for connected tolling and safety use cases. The release also pointed to intent for a full-corridor rollout, reinforcing the shift from demonstration to deployment-ready infrastructure.
• October 2025: Conduent Transportation won a contract from the Richmond Metropolitan Transportation Authority to implement a Pay-by-Plate system as part of the authority’s shift toward all-electronic tolling. The project follows a Tolling-as-a-Service model, expanding Conduent’s recurring services footprint in smart tolling operations.
• June 2025: Cubic Transportation and UrbanLogiq entered into a partnership to develop and commercialize data and AI-driven solutions for transportation agencies. The partnership is positioned around faster decision support for congestion management and safer roadway operations, which aligns with smart highway platform expansion.
• December 2024: Yunex Traffic partnered with Autotalks to add enhanced privacy and security capabilities to its RSU2X roadside units, supporting certification-ready V2X infrastructure for deployment. The announcement also noted that more than 500 RSU2X units had already been deployed across multiple U.S. states, indicating scaling beyond pilots.
• May 2024: Efkon-STRABAG announced collaborations with IIT Bombay, India, to advance Intelligent Transportation Systems (ITS), road safety awareness, and related innovations. The initiative signals increased investment into applied R&D and talent pipelines that support next-generation smart highway deployments.

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