By on May 8, 2021

connected vehicle

Connected vehicle sales will grow 20 percent in 2021, with a 10.4 percent compound annual growth rate (CAGR) between 2020-2026 according to ABI Research, a tech market advisory group.

2020 new car sales dropped 15 percent,  although it was less than anticipated. Consumers rallied at the end of 2020 and the first quarter of 2021, catching automakers with their days supply down. End users have become more demanding about their infotainment systems. According to ABI, there’s strong interest in connected vehicles, an opportunity OEMs are missing.

Hyundai’s partnering with Nvidia to standardize AI-based infotainment systems is one example. In ABI’s study, connected vehicles are reshaping the industry with more powerful infotainment systems. Nvidia, Qualcomm, Xilinx, NXP, and TSMC have platforms with greater AI-based functionality, and headroom for updates and apps.

Vehicles with connected infotainment will grow by 23 percent in 2021, returning to pre-pandemic levels, ABI claims. They say this is due to increased penetration in emerging market regions. The Ford and Google alliance shift to Android’s OS will double its penetration in 2023 and 2024. Google’s advantage occurred due to poor embedded system reviews, and existing smartphone dominance.

At present, connected vehicle subscriptions are not profitable. Sensor data marketplaces, OTA updates, and in-vehicle commerce could monetize connectivity during the vehicle’s lifecycle. To realize this potential, OEMs need to offer more compelling user experiences to increase touch points with their embedded systems, ABI advised.

Tesla, Mercedes-Benz, Volvo/Polestar, Harman, Visteon, and Aptiv are OEMs and tier ones heavily investing in connected vehicle technology. ABI Research’s connected cars report was the source. ABI provides research and guidance to technology firms, innovators, and decision makers, focusing on technologies that are changing industries, economies, and work forces. Their aim is to empower clients to stay ahead of the market and their competition, a lofty goal in the midst of chip shortages and divergent platforms.

[Image: Cadillac]

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14 Comments on “Connected Vehicle Sales Grow by 20 Percent in 2021...”

  • avatar
    Steve Biro

    I don’t mean to be unkind, Jason, but this piece reads like it picks up somewhere in the middle of a larger story and drops out before the end. I also reads like it was lifted from a report with little or no rewriting. Please, don’t rush pieces or publish them before they are finished.

    • 0 avatar

      If you saw the source documents, and the press release that accompanied them, you’d know it took awhile to sort through the self-congratulatory dialogue to get to where I ended up, Steve.

      There’s only so much time to devote to each story or post, and quotas to meet. I came from a print background where I had at least a month or longer to shoot the images, interview the subjects, get the details, and write the story.

  • avatar

    Don’t assume everyone knows what a “connected vehicle” is. I didn’t.

  • avatar
    schmitt trigger

    Anyways, back to the meat of the story.

    These past week there have been several stories which indicate how the worldwide silicon chip shortage has severely hamstrung the automotive sector.
    There has been some talk about de-contenting electronic gadgets out of anything less than luxury vehicles.

    Yet manufacturers are pressing full steam ahead. It seems to me that the mirage of vehicle subscription’s future profits, has everyone salivating.

    • 0 avatar

      @schmitt trigger

      “Yet manufacturers are pressing full steam ahead. It seems to me that the mirage of vehicle subscription’s future profits, has everyone salivating.”

      Agreed. Call me a crochety luddite, but aside from autonomous operation, I can’t think of a connected product or experience auto manufacturers can offer that other form factors can’t do better.

    • 0 avatar

      I doubt very few people will be paying for subscriptions.

  • avatar

    1) I would buy a Buick or GMC (depending on vehicle) over a Cadillac right now because there isn’t enough differentiation

    2) Despite point 1, I have to admit I love the 38″ display in the Cadillac

    3) I believe this will be the future for everything – displays have gotten stupid cheap and one panel for all is easier for manufacturing

    4) Going to suck when they fail

  • avatar

    Two problems.

    1. Connected Services are no better, and typically far worse, than the equivalent service on a smartphone. If I want to find a place to eat, read some reviews, and book a reservation, I can do all of that anytime on my phone – car included. GPS? Apple Maps on Carplay. Weather? Just ask Siri. Nearest gas station? Siri. Traffic? Waze, which also works on CarPlay.

    2. Aren’t you supposed to be concentrating on driving the car? Why are we making it easier for drivers to distract themselves?

    Really, the only use case I think think of for connected services is when someone lost or misplaced their phone. Also, I’m assuming connected cars refers to connected services, like the UConnect store. And lastly, focus on driving the damn car.

  • avatar

    Connected vehicle subscriptions aren’t profitable because the foundation upon which they are built SUCKS.

    Three plus years ago I bought a VW that came with a free trial of their Car-Net services. Despite their best efforts immediately to sell me on a 5 year subscription, I declined–and am glad I did. It was pure junk.

    Fast forward to a couple of weeks ago, and I buy a new Chrysler. They have a fancy setup where I can buy stuff from the car. Huh, makes no sense to me; I have a wallet. Anyway, it’s all tied into their UConnect 5 setup–which includes remote status and services in the phone app. And it’s pure junk, absolutely no better than what VW tried to sell me. If you can’t get the basics right, why should I buy anything else from/through you?

    When I bought the car I immediately set up my phone–and wireless Android Auto fired right up and there I was. Why do I need maps, and XM Radio, and anything else built into the entertainment half of the infotainment system? Take all that cost and complexity out and leave me with the screen, amplifier, speakers, and secondary/tertiary car controls on the screen. Because you all stink at providing value.

  • avatar

    Here’s a connected car question: My car has Onstar. I don’t pay for the service, but since I did create an account, I get those vehicle diagnostic emails, so my car is being monitored to some extent: check engine lights, tire pressure monitor etc. If I delete the car off the account altogether, does that stop GM from monitoring the car?

    • 0 avatar
      Steve Biro

      No. OnStar keeps monitoring the car until and unless you disconnect the wireless modem. But you should close and delete your OnStar account as well.

  • avatar

    Just got 2021 CX-5 GT, it came with connected service complimentary for 3 years and cellular data for 3 month.
    Reading thru Mazda’s agreement for usage is a little scary but it’s fun to have the iphone app to control the car from anywhere, get alert if a door is open and so on.

  • avatar
    Master Baiter

    The newest of my three vehicles is “connected” and it suffers from the same type of software bugs that plague smart phones and computers. Driver profiles fail to load half the time; the connected phone app that’s suppose to send GPS directions to the vehicle doesn’t work most of the time; the last software update changed the UI and broke a frequently-used feature; the voice input is unreliable. Hell, it even forgets my home address sometimes. And this is all on vehicle that cost nearly $90K. Color me unimpressed.

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