Current trends – May, 2020
The connected car in the time of Covid-19
Many people are nervous about looking at the way the car industry will restart post pandemic. Before we look at the longer term consequences for car connectivity, we can already anticipate a short term surge of personal car usage, as anyone would try to favor their own private transportation mean instead of shared mobility solutions, public transportation, car sharing or ride sharing for obvious health concerns. That should lead to a short term surge in sales of cars, if users can afford it, especially in view of the likely subsidy backing of the governments wishing an economic rebound.
Car sharing- whose business model was already at pain prior to the Covid crisis, as Daimler-BMW JV Sharenow pulled out of the US already in November 2019- and car riding would need to reinvent themselves if they wish to still be part of the automotive future.
But let’s look at the longer term implications for the car industry. Besides the short term economic crisis linked to the near complete closure of all activities, leading probably to redundancies, cost cutting and projects discontinuations, the market offering would also be shaped by governmental actions across the globe.
An early sign comes from China, who has decided to prolong for two years subsidies for electric vehicles, that where supposed to vanish at year end. Initial feed-back from the EU is similar, so that the car industry may be forced to go into the fast lane to switch to fossil-fuels free vehicles.
EVs have their specific limitations, so users require real time operational information regarding diagnosis, their expected driving range, where they can charge en route, optimized itineraries for their car etc. All those services necessitate connectivity services that are anyway required for ADAS (Advance Driver Assistance Services), Infotainment, WIFI on board or third party services such as pay as you drive insurance schemes. In addition, the mass adoption will require the batteries of EV to become elements in power grid balancing, that only smart connectivity to the vehicles would allow.
We should also focus on the evolution of the vehicle user post pandemic: he has been confined at home working remotely, relying heavily on its connected PC and smartphone both for work and infotainment. And most businesses will reinforce teleworking from now on. Therefore we can expect users to require going forward equivalent connectivity in their car such as wifi internet.
It seems to mean that car manufacturers should prepare a post-pandemic acceleration of connectivity requirements for their new cars. Such surge in the importance of cellular connectivity should lead them to investigate what is their best strategic and economic option to build cellular connectivity solutions on the long term with cost effective solutions, secured and available globally. To fully master in the long term such services, car manufacturers should consider themselves becoming full MVNO (Mobile Virtual Network Operator), thus fully controlling by themselves scarce resources such as IMSIs and network codes. And this does provide the ability to mastering always best service coverage at any time and network costs with local MNOs while insuring service consistency throughout the world.
Of course such move may appear out of their comfort zone, as it may require a paradigm shift and a new way of thinking the connectivity, as well as some upfront investment, compared to the less stressful and more traditional subcontracting to third party operators. However, the long term freedom, the quality control and the cost efficiency it provides would become a key competitive asset in the evolution of the new cars leading ultimately to autonomous driving.