The rapid development of connected and autonomous vehicle(CAV) is poised to transform highway traffic conditions. This paper focuses on the critical parameter of time headway to review the impact of CAV on highway capacity. The research distinguishes between two technological pathways: vehicle intelligence and vehicle connectivity. A comparative analysis was conducted on the impacts of human-driven vehicle(HDV), autonomous vehicle(AV), and CAV on highway capacity. The study indicates that HDV typically maintain a time headway of 1.5–2.0 seconds due to the randomness of driver reaction time and behavioral heterogeneity. Autonomous vehicle, particularly those with Level 3 or higher automation, can reduce the time headway to 0.6–1.5 seconds by optimizing perception and decision-making, thereby increasing capacity to 1.5–2 times that of HDV. Connected and autonomous vehicle, leveraging V2X communication and cooperative control mechanisms, further compress the time headway to 0.5–1.1 seconds, theoretically enabling a capacity 2–3 times that of HDV. The effectiveness of CAV depends on their market penetration rate and the degree of connectivity. Dedicated lane strategies can mitigate performance conflicts in mixed traffic flows during the transition period. Existing research predominantly relies on simulations and lacks validation with real-world vehicle data. Future work needs to further address practical challenges such as communication reliability and the interactions within mixed traffic flows, providing references for theoretical and applied research in future intelligent connected transportation systems.