The evolution of mobile connectivity has accelerated at an unprecedented pace. From the foundational 2G that introduced cellular networks to the transformative 4G that revolutionized video streaming, each generation of mobile technology has brought profound changes. Now, with 5G, we are entering an era of "isolated connected solutions" such as 5G-enabled factories, campuses, and stadiums. But the future promises more—an interconnected world where everything from personal devices to city infrastructure is linked, creating what I envision as a seamless "connected living" where we will be connected at the personal, community, and city levels. Imagine a future where everything – and I mean everything – is connected, from personal devices to city infrastructure. In this interconnected world, even our cars will transform into vital nodes in a vast network.
Car as a Connected living Eco System
The Car as a Connected Living Hub
Forget the traditional view of cars as mere transportation vessels. The vehicles of tomorrow will be central elements in a connected living ecosystem. Imagine a car that drives you autonomously, manages your daily schedule, orders groceries, integrates with your smart home and office devices, acts as a health kiosk, and more. This transformation has turned cars into golden geese for automakers, capable of driving continuous revenues across their lifetimes. Connected cars have evolved beyond being mere data generators for fleet management and safety compliance. They now perform myriad functions previously confined to smartphones and unlock new realms of connectivity with the touch of a button.
A $568 Billion Market Opportunity: The Connected Living Ecosystem
A groundbreaking study titled "Car as a Connected Living Ecosystem" by my team at MarketsandMarkets (MnM) forecasts the market to reach an astonishing $568 billion by 2035. This translates into a potential revenue stream of $1,600 per vehicle per year for manufacturers, a significant increase from the current $120. This vast market includes cars that can give you cheaper digital insurances, navigate autonomously, manage energy requirements, and even function as a health kiosk.
MnM research identified over 300+ potential features that Vehicle Manufacturers (VMs) can integrate into future software-defined vehicles, creating a seamless customer experience while generating vital revenue streams. These features span from pre-buying and digital retailing influenced by social media to seamless in-car experiences, including entertainment, operational use cases, and even integration into the metaverse. Connected cars will also offer services like autonomous driving packages and flexible vehicle ownership models, making recurrent revenue streams for OEMs a strong possibility.Connected cars in future will not be just about individual features; they will represent an integrated ecosystem. They will play pivotal roles in connected homes, work, health, and city infrastructure, enhancing customer experience and offering support services in daily life. They are set to revolutionize how we think about mobility, energy management, and public infrastructure.
Cars Integrating Smart Home Solutions
OEM Initiatives and Industry Trends
As the automotive industry pivots towards a more interconnected and sustainable future, VMs are strategically positioning themselves as car manufacturers and integral players in the broader cosystem of connected living solutions. Companies such as Stellantis, General Motors (GM), Ford, Tesla, and Hyundai are not merely focusing on enhancing connected cars; they are broadening their services to include sustainable solutions like renewable energy generation, energy storage, and vehicle-to-grid (V2G) technology. These initiatives represent a strategic shift in leveraging connected vehicle data to pioneer new services, including connected insurance models spearheaded by Tesla through its innovative insurance ventures.
Looking towards the future, Stellantis projects an impressive addition of EUR 20 billion in revenue from 34 million connected vehicles by 2030. Similarly, GM and Ford anticipate substantial revenues, estimating around $20 billion each from their connected vehicle sectors by the same year. These revenue streams will primarily stem from subscriptions for connected living services, features on demand, and data as a service, reflecting a significant trend toward monetizing vehicle connectivity.
In terms of specialized services, Hyundai and Renault are making notable strides in the health sector with their BeyonCa solution, an innovative in-car health monitoring system. Simultaneously, Tesla, GM, and Ford are at the forefront of the connected energy sector. Their efforts are focused on developing systems that not only support renewable energy generation but also integrate these capabilities with Vehicle to Grid (V2G) technology, enhancing the energy efficiency of electric vehicles.
The integration of vehicle operating systems with popular video conferencing platforms such as Zoom, now compatible with Apple CarPlay and Android Auto, exemplifies the "office on wheels". This development suggests that the future of in-car experiences will increasingly mirror the functionality of smart devices.
Nissan's Arc Strategy highlights the importance of cross-industry partnerships, new revenue streams, and the introduction of innovative products to stay competitive in the fast-evolving automotive market.
The best in class Vehicle manufacturer in this space today is actually Xiaomi, China’s leading Smartphone maker now launching its own Electric car, which debuts with an in vehicle operating system that works with Smart phones and home appliances including Air conditioners, rice cookers and other home devices giving you full control of your home and kitchen while on drive home…..and Apple decided to cancel its car programme.
This interconnected world will make every drive an unforgettable journey!
With inputs from Shwetha Surender, Vice President Mobility, Markets and Markets
