The connected car ecosystem is evolving and starting to take shape into a credible industry. Fueling the growth of smart mobility applications, autonomous vehicles and a wider range of Internet of Things (IoT) devices are becoming a part of everyday conversation. Plus, new complementary market segments and business models are emerging as a result, creating new opportunities and challenges for the business landscape.
And, as more automotive players are entering into strategic alliances with technology companies, the legacy car industry is being challenged. However, there are still issues to address related to safety, security, and privacy.
Connected cars expert and connected car technology startup founder Liz Slocum and ReadWrite Labs Research Analyst Kailash Suresh present a comprehensive look at the state of the connected car industry. This can provide insights in the direction it’s headed and how things will change course over the next few years.
What is a Connected Car?
Many people are already driving some type of connected car already and have been for years. Any vehicle connected with systems like OnStar or LoJack can be considered as a connected vehicle because data is transferred between the car and another location.
And, that’s what defines a connected car. The car can be connected to the Internet in four different ways. It can connect to another vehicle, to infrastructure, to a mobile device, or to the cloud. Through the connection and sharing of data, the connected car enhances safety, security, communication for vehicle users.
Real-World Application On the Road
For example, companies like Peloton Interactive use radar and dedicated short-range communication for truck platooning where trucks closely follow each other on the road. This creates logistical, safety, and fuel efficiencies for the trucking companies that use this connectivity.
For infrastructure connectivity, vehicles are also connecting with road signs and sensors to create new solutions for everyday issues. For example, Fybr has sensors located under parking spots in parking structures that alert drivers to the number of available spaces. This can move vehicles through parking garages at a much faster rate by telling drivers what level has open spaces rather than to wander through the structure.
When a car is tethered to a mobile phone, it provides connections to apps and other information a driver may want to access while on the road. For example, Mojio and Apple Car Play provide application connectivity in many of today’s vehicles. Finally, a car connected to the cloud has a network connected embedded in the vehicle, such as those offered in consumer vehicles by Android Auto and Tesla or that are part of a fleet management applications.
Rapid Emergence of New Applications
Within each of these categories of services, there is even more that these connected cars can do for drivers and vehicle manufacturers from all the data that comes out of a vehicle. Also, it’s opened up opportunities for technology companies to develop new applications and services that further what a connected car can do. Essentially, if you can see it on a vehicle dashboard, then that data can be extracted for use.
For example, a connected car can share information about driver behavior, including speed and acceleration, braking, climate control, and trip information. This information can inform auto manufacturers and those involved in building smart city infrastructure, propelling the use of autonomous vehicles.
Also, if consumers have hybrid or electric vehicles (EV), they can learn how to adapt their driving behavior from the data that is collected and provided on the dashboard controls. This includes braking, accelerating, and cruising coaching from their connected vehicles.
The emergence of new applications can even go as far as to create new opportunities for insured drivers to customize their rates based on driving behavior and actual miles driven through pay-as-you-drive companies like MetroMile. In return, many drivers are saving more money on their insurance premiums while insurance companies are learning more about driver behavior.
A Map of the Connected Car Landscape
With so much opportunity emerging from the connected car landscape, it’s no wonder that the industry is experiencing such exponential growth. There are nearly 500 companies and products that make up the connected car industry along with 275,000 employees. These companies are generating $437.7 billion in economic value.
Among the startups, there are 14 unicorns (those founded after 2000 with under 100 employees but with $1 billion valuation) that have appeared to further illustrate the extraordinary interest and potential from connected cars. These unicorns include Zoox, BlaBlaCar, Argo AI, and Waze. Beyond the unicorns, $105.5 billion in funding is stimulating industry and application expansion and facilitating connected car growth.
The connected car landscape is defined by an incredible amount of innovation across specific segments, including connected intelligence, connected apps and processes, and connected edge. In first looking at the connected edge, this is the segment of equipment that connects the raw data in the field from connected cars.
This raw data is then moved up through the connected car ecosystem into the cloud where it is aggregated and then becomes part of the connected intelligence segment. The aggregated data is analyzed and becomes insights that are pushed out into the consumer and enterprise markets through apps as well as returned back into the devices into the field. In this way, the connected car landscape oversees a cycle of data, offering continual motion and enhanced insights as the information cycles through these connected car segments.
Emerging Trends Driving the Connected Car Industry
One of the first trends to emerge from the connected car industry is the proliferation of shared vehicles as an alternative to car ownership. In this way, mobility no longer focuses on driving. This has pushed vehicle manufacturers to re-imagine the in-car experience.
Also, this trend has paved the way for stationless bikes and scooters with rideshare companies like Uber and Lyft expanding into these markets through investments in mobility startups. With that, cities around the world, such as Helsinki and Bogota, plan on banning car access in their city centers over the next few years.
Although autonomous vehicles continue to be an emerging trend, it’s still in the experimental, research, and development phase as an industry. As part of this phase, a number of pilot programs have been launched to test autonomous vehicle application. In late August, two grocery stores tested delivery service using autonomous vehicles. San Jose, California consumers could order groceries from an app and then receive them via a temperature-controlled, self-driving vehicle. Another pilot program was conducted in Scottsdale, Arizona with a similar type of vehicle.
Another trend to emerge with autonomous has been a positive one despite many concerns about job loss. Instead, autonomous mobility solutions are viewed as one way to fill a gap in specific current labor shortages. Between a truck shortage and rising fuel costs, there has been an identifiable need for national truck drivers. In turn, this had led to increased retail pricing on beverages and other products.
Where We’re Headed
While autonomous may have a long way to go before they have a mainstream market and use, connected cars are already becoming a large part of the consumer and enterprise environments. As IoT, data analytics, and technology continue to converge and develop applications and value, connected cars will certainly pave the way for where we’re headed in terms of driverless mobility as well as change the mindset about ownership and use.