Electronic Toll Collection Market Size, Share & COVID-19 Impact Analysis, By Type (Automatic Vehicle Classification, Violation Enforcement System, Automatic Vehicle Identification System, and Others (Transaction Processing/Back Office)), By Technology (Radio Frequency Identification, Dedicated Short Range Communication, Global Navigation Satellite System (GNSS)/GPS, Video Analytics, Cell Phone Tolling, and Others (Barcode-based ETC)), By End-user (Highway and Urban Area), and Regional Forecast, 2022-2029

The global electronic toll collection market size was valued at USD 7.89 billion in 2021 and is projected to grow from USD 8.33 billion in 2022 to USD 16.65 billion by 2029, exhibiting a CAGR of 10.4% during the forecast period. Based on our analysis, the global electronic toll collection market exhibited a decline of -2.8% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprecedented and staggering, with electronic toll collection experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. 

An Electronic Toll Collection (ETC) system can charge a toll for the established customer's account. The system determines registered passing vehicles, automatically charges those vehicles, and provides alerts for the local highway and urban users. This ETC method allows vehicles to pass through toll facilities without waiting or stopping by. ETC is a wireless module that collects the fees for using highways, tunnels, bridges, and flyovers from commuters by tracking their vehicle registration number.

Increased traffic congestion and poor road conditions have attracted demand for automatic toll collection. According to the U.S. Beauro Report, the delays caused owing to traffic congestion in urban areas cost users more than USD 30 billion annually. Public and government sector is shifting to support these electronic toll-collection systems. ETC helps to alleviate congestion at the toll plazas, reduces toll collection costs, increases toll collection capacity, and enhances audit control. It improves fuel conservation, contributes to cleaner air, and reduces driver frustration and time lost. These systems are important for urban toll facilities with larger commuter populations. The rising global urban population around the globe with increasing government investment toward smart infrastructure drives the market growth. According to the World Bank Report 2021, the global urban population reached 4.46 billion in 2021 and is expected to reach around 6.68 billion by 2050.

The ETC system is designed to electronically deduct the toll amount from the user’s bank account. The transaction entries are saved on the bank server on the toll management system of the road contractor. So, incidences such as misplacement of toll fee rescripts can be eliminated to avoid the chances of heavy penalties. This system can also determine and verify whether the vehicle is registered on the RTO portal or not and will notify local highway police about illegal transportation of non-registered vehicles.

The ETC system is primarily based on the radio frequency identification method. When a vehicle passes through the ETC lane, the scanner on the top of that lane scans the RFID card inside the vehicle and transmits information in the form of radio signals. This system is connected to a bank account, and with the help of that information, it deducts the required fee amount from a user's bank account.

COVID-19 IMPACT

Increasing Demand for Contactless Operation in Toll Plaza Responsible for the Growth of the Market

The COVID-19 outbreak critically affected economies all over the world. Especially in the transportation and logistics sector, the effect of the COVID-19 outbreak was very crucial as the local and central government authorities of various countries in the world imposed a global lockdown. This restricted the free movement of vehicles and people on the road. The global restrictions and lockdown completely disturbed the working of transportation and logistics companies.

It reduced the number of vehicles running on the road at the lowest rate. Also, various government development activities such as roads, highways, tunnels, and bridges were halted due to the lockdown. The effect of lockdown reduced the implementation of automated systems, which lowered the market growth. Our analysis shows that the global market declined by 2.8% in 2020 compared to 2019.

Also, the toll collection in May 2020 dropped by 10%-15% than the previous April month in India. According to the report published by Bloomberg Inc., the second wave of coronavirus in India had badly affected the toll collection in the country. The COVID-19 pandemic also affected the U.S., Canada, and developed European countries. However, easing lockdown restrictions on the transportation of essential goods gradually reduced in the second quarter of 2020, which is responsible for setting up a new normal in the market. Various business promotion policies adopted by government authorities and top players help drive the market globally.  

However, amid the COVID-19 pandemic, the demand for ETC slightly increased due to its contact-free payment method. It helps reduce the transmission of COVID-19 infectious diseases through close contact and other viral mechanisms. Amid the COVID-19 pandemic, the construction of highways and bridges began to develop. This has increased the demand for automated toll-collection systems.

Post-COVID-19 pandemic, toll collections through the electronic mode using FASTag increased by 67% in India, reaching USD 4.62 billion. In March 2021, around 49.5 million FASTag-based tolls were issued, which increased from 31.2 million in March 2020. This strong growth in toll collection is expected to drive the demand for an electronic toll collection market.

LATEST TRENDS

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Increasing Adoption of Digital Toll Payments with Rising Highways Constructions Investments to Propel the Use of ETC  

The increasing adoption of digital toll payments and the surge in highway construction around the globe to drive the market trend. The government of India conducted the National Electronic Toll Collection (NETC) program to create awareness of digital toll payments among commuters. In India, according to NETC Organization, commuters crossed around 2.4 billion online transactions worth around USD 380.8 billion through digital payment methods. It reduced the waiting time of commuters at toll plazas. ETC helps to lessen the wait time by around 2 minutes per vehicle at the toll plaza.

Several countries such as the U.S., Canada, India, and China are investing in roadways constructions owing to rising demand for urban populations. For instance,

• In June 2022, the U.S. government aimed to invest around USD 200 billion through public and private funds over five years.


• The Indian government has made important roadways infrastructure investments with around USD 1.4 trillion by 2025. In India, the construction of roadways reached around 12,205 km in 2020, with an average rate of 37 km per day. In India, the government planned to invest around USD 350 billion from 2020 through 2025 for road infrastructure development.


• In June 2022, Cube Highways and Infrastructure III Pte. Ltd. roadways project Construction Company raised USD 1 billion in funding for the development of the infrastructure investment trust (InvIT) in collaboration with Canada’s pension fund, Columbia’s Investment Management Corp. and Mubadala sovereign wealth fund. This road operator manages a network of around 27 highways totaling 8,400 km of lanes.

DRIVING FACTORS

Rising Demand for Efficient Traffic Management across Toll Collection Centers to Drive the Market Growth

The rising demand for efficient traffic management solutions in toll collection centers is driving market growth. A well-managed traffic across urban areas is important with rising urbanization and traffic congestion. This automatic toll collection system helps to manage the traffic flow and save time at the toll plaza.

Increased traffic on the highways causes additional congestion at the toll plazas that resulted in loss in time and fuel. The advanced automatic toll collection system uses several technologies such as RFID tags, dedicated short range communication, and others. This system saved waiting time and additional costs with traditional tolling. Also, it reduces traffic volumes by around 25% at the tolling plaza. It helps to pass around 1 million vehicles in a day and achieve tolling revenues of around USD 300,000. These revenues from congestion tolls have been used to improve other transport and transit services. Furthermore, this system is used to have seamless passage at toll booths and reduce traffic congestion. These factors propel the electronic toll collection market growth.

Rising Adoption of Video Analytics, Artificial Intelligence, and Machine Learning at Tolling Zones to Drive Market Growth

The transportation sector's adoption of advanced technology, such as artificial intelligence, machine learning, and video analytics, is increasing globally. Electronic or automated tolling systems include cutting-edge technologies such as smart sensors, data communication, and analytics. Adopting these technologies enables direct communication between toll collection devices and running vehicles, improving the operation of toll collection. Also, with the help of high-end technologies, all vehicle data can be stored on a secured cloud server. Furthermore, advanced radars, sensors, and high-resolution surveillance cameras allow the behavioral study of traffic in a particular area, helping local government authorities with better decision-making.

Also, growing adoption of advanced technology, such as the Internet of Things and GPS/GNS-based toll collection systems in connected vehicles, majorly contributes to adopting automated toll collection systems. This increasing adoption will drive the market globally.

RESTRAINING FACTORS

Lack of Standardization in the Implementation of ETC System to Restrain Market Growth

The implementation of the electronic toll collection system has standardization issues. Various electronic system manufacturers have different standardization, leading to compatibility issues. Different companies produce various standard equipment that results in complexities for commuters.

Although there is tremendous growth in electronic toll systems, incompatibility issues between manufacturers related to various technologies hinder the market growth. The companies owning ETC’s patent rights result in a fight in court to protect it. Some electronic toll collection technologies have different systems and equipment. For instance, readers are linked with different computer systems, but the other manufacturer's equipment cannot read the RFID tags made by other manufacturers. If two tags are attached to one vehicle, it may cause interference issues. This factor hinders the electronic toll collection market growth.

SEGMENTATION

By Type Analysis

Rising Adoption of FASTag Drives the Adoption of Automatic Vehicle Identification System

Based on type, the electronic toll collection market is divided into Violation Enforcement System (VES), Automatic Vehicle Classification (AVC), Automatic Vehicle Identification System (AVIS), and others (transaction processing/back office). Among these, Automatic Vehicle Identification System (AVIS) held the largest share in 2021. This is primarily owing to the increasing popularity of FASTag at the toll collection plaza in the global market. FASTag is the easiest and most convenient way to collect toll tax without stopping or slowing down the vehicle. Also, AVIS is growing with the highest CAGR during the forecast period.

Also, various government authorities of emerging countries are taking initiative to implement an automatic vehicle identification system responsible for market growth. Automatic vehicle identification-based ETC increases throughput at the toll plaza, and it reduces delays and transaction times. For instance, an automatic vehicle identification system takes around 8 seconds per vehicle to drive in the toll booth. This type of ETC lane handles around 1,200 vehicles per hour.

By Technology Analysis

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Rising Adoption of FASTag Drives the RFID Segment

Based on technology, the market scope consists of Radio Frequency Identification (RFID), Dedicated Short-Range Communication (DSRC), Global Navigation Satellite System (GNSS)/GPS, video analytics, cell phone tolling, and others (barcode-based ETC). RFID dominates the segment as it is the mostly used ETC technology. This system’s transponder reads the speed up to 290 km/h and at distances from a range of around 72 meters, that is 235 feet.

Cell phone tolling is growing rapidly owing to increasing adoption of digital payments across roadways for toll collection. The increasing adoption of high-construction projects in emerging countries propels the market growth. According to the Transport Minister, toll income from the National Highway of India will triple in the next three years to over USD 1.7 billion annually.

By End-user Analysis

Rising Investment for Road Infrastructure Development Drives the Highway Segmental Growth

Based on end-user, the market is bifurcated into highway and urban area.

The highway segment generated higher revenue in 2021 due to rising investment in road and highway construction projects across the globe. Also, highway vehicles require rapid transition on the toll plaza. Automatic toll collection system allows vehicles to pay toll without stopping in toll plazas, driving the market globally. Increasing smart city investment in urban areas will drive urban segmental growth. Also, rising global urbanization drives this segment to grow at the highest CAGR during the forecast period.

REGIONAL INSIGHTS

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Geographically, the electronic toll collection market is studied across Asia Pacific, North America, the Middle East & Africa, Europe, and South America. They are further classified into countries.

North America is expected to dominate the market owing to early adoption of the advanced technology-based ETC and increasing investment toward modern roadways. In North America, the U.S. market is flourishing remarkably during the forecast period owing to the rapid implementation of modern technologies in the road and transportation industry. In the U.S., more than USD 550 billion was invested in highway networks across urbanized areas between 2000 and 2020. However, traffic congestion has increased in more than 100 urbanized areas, far outpaced by population growth.

The Asia Pacific market is growing at the highest CAGR and will continue to grow globally during the forecast period. Increasing use of automatic tooling devices on the highway and in urban areas is driving the market in the region. Also, the top key suppliers are adopting various business plans of action, such as collaborations, business partnerships, acquisitions, and product developments, which are responsible for the market's growth in the region.

China Dominated the Region in 2021 Owing to its Huge Manufacturing Facility

China is a dominating country in the region for revenue generation in the regional market. This is attributed to the fact that China has a huge road and highway infrastructure for projects and large production units for RFID-based tags. The Chinese market has a significant share in the manufacturing of RFID tags worldwide. This increases the supply of RFID-based toll collection systems from China to the rest of the globe. Also, China provides cutting-edge technology, such as DSRC, to the rest of the world, driving the market growth.

In the case of Europe, in the year 2021, Germany is expected to dominate and will continue to grow during the forecast period. This is attributed to the fact that Germany is leading in toll collection equipment manufacturing, propelling the utilization of automated toll collection systems. Furthermore, this country is predicted to generate the highest CAGR during forecast years due to the presence of large R&D and manufacturing facilities in the country.

Due to less adoption of modern technology and the unavailability of road and highway infrastructure in Africa, the market's growth is slower than in other regions. However, the growth of Middle East regional markets is moderate, owing to fewer highway projects and less presence of toll equipment manufacturing units.

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South American countries such as Argentina, Brazil, and others are growing at a moderate pace owing to rising investments in smart cities and road development projects. According to the Minais Gerais Government, in the second quarter of 2022, the road development project was sanctioned with a value of USD 902 million in Brazil. It may create ample opportunities for the market.

KEY INDUSTRY PLAYERS 

Kapsch Traffic.Com AG has Highest Share Owing to its Advanced Manufacturing Facility 

Kapsch TrafficCom AG leads the electronic toll collection market share among the top organizations as the company is a premium manufacturer of electronic toll solutions such as toll lane controllers and touch screen toll control units.

Furthermore, Thales Group, EFKON, TransCore, Honeywell International, Inc., Kapsch TrafficCom AG, Feig Electronic, Mitsubishi Heavy Industries, Ltd., Perceptics, Q-Free, IRD, Transcore Holdings, Inc., and others have expanded their global presence, which considerably contributes to the global market growth. Furthermore, major companies are focusing on partnerships, product launches, and acquisition strategies to expand their global presence.

• In June 2022, TransCore received a contract from Thousand Islands Bridge Authority selected to develop, design, and maintain next-generation toll collection systems. Its international bridge connected Wellesley Island and Hill Island, New York. TransCore replaced the TIBA’s traditional system.


• In October 2021, AEye, Inc., a high-performance LiDAR solution provider, and Intetra, a provider of electronic toll collection systems, jointly launched advanced electronic tolling automation at the Intelligent Transport System World Congress. The companies optimized AEye’s 4Sight M LiDAR capabilities, enabling high-resolution detection in tolling areas. It detects vehicle types, vehicle speeds, traffic, and weather conditions.


• In April 2021, Toshiba Electronic Devices & Storage Corporation launched 650-V junction power MOSFET including TK065U65Z, TK110U65Z, TK155U65Z, TK090U65Z, and TK190U65Z. The DTMOSVI series is used in TOLL packages for volume production.

List of Key Companies Profiled:

• Thales Group (U.S.)


• TRMI Systems Integration (Japan)


• EFKON (Austria)


• Honeywell International, Inc. (U.S.)


• Kapsch TrafficCom AG (Austria)


• Mitsubishi Heavy Industries, Ltd. (Japan)


• Perceptics (U.S.)


• Q-Free (Norway)


• IRD (Canada)


• Transcore Holdings, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2022 – Transcore Systems, a software and service provider, extended its five-year partnership with Ohio Turnpike and Infrastructure Commission (OTIC). Through this partnership, Transcore Systems got a statewide toll collection, maintenance, and service contract for the next five years.


• January 2022 – Cubic Transportation System, a provider of transportation-related software and services, partnered with New York and New Jersey port authorities. Cubic Transportation System provided an automatic toll collection system to New Jersey and New York port authorities through this partnership.


• September 2021 – International Road Dynamics, a transportation-related service provider, launched its new product, weight in motion toll controller system. With this product, customers' organizations managed access to toll plazas by remote operation.


• March 2021 – Q-Free, a toll management service provider, launched its new multiuse high-speed weigh-in-motion and multimodal classification solution HI-TRAC® TMU4X. This solution will provide better service to its customer.


• October 2019 – Toll Plus, a global provider of transport-related software and solution, partnered with India’s leading bank, Kotak Mahindra bank. Through this partnership, Toll Plus provides its toll collection monitoring software to Kotak Mahindra bank.

REPORT COVERAGE

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The electronic toll collection market research report provides a detailed analysis of the global market and focuses on key aspects such as leading companies, product/service types, and leading end-use industries. Besides this, the report offers insights into the market trends and highlights the key industry developments. In addition to the above mentioned factors, the report encompasses several factors contributing to the market growth in recent years.

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