The connected vehicle data battle
The last TU Automotive Europe in Munich was an exciting event with many inspiring key notes, track presentations and panel discussions. The speakers and participants represented a broad range of market segments, ranging from OEMs, IT providers, Telco’s, Insurance companies, Technology providers, Telematics Service Providers, Payment companies and Consulting companies, just to name a few.
Walking around the coffee corners, you would hear a buzz of conversation that included words such as:
- Connected vehicle
- Digitalization and data sharing platforms
- Future of digital customer services
- New business models and partnerships
- Smart mobility and car sharing
- Autonomous cars
One obvious thing these topics all have in common is “connected vehicle data”.
The end of car ownership?
Imagine yourself driving an open top vintage sports car along a winding mountain road, with the wind in your hair and “born to be wild” blasting from the speakers. Well, if you have a smile on your face while reading this blog, then you are probably like me. I’m from the generation that dreams to own such a vehicle and enjoy it at my leisure.
Unlike me, my little sister comes home almost every weekend in a shared car. Her perception of “freedom” is in total contrast to mine. But I must admit that sometimes I feel like trading the time spent polishing and maintaining my old car with her freedom.
Young people today are less and less attached to car ownership. Instead, they want on-demand mobility, without the hassle of save money for a capital investment and on-going running costs. This trend is also pointed out in many findings from McKinsey and Frost & Sullivan: The automotive revenue pool will increase and diversify toward on-demand services, where car sharing is a part of the equation.
What worries OEMs?
Automotive manufacturers have good reasons to rethink their future revenue models. The increasing demand for new mobility will decrease sales of private cars, but this is likely to be offset by increased revenues from car sharing. Many OEMs have already invested in the car-sharing business, for example: Daimler with Car2Go, BMW with Drive-Now, PSA with Free2Move.
The impact of this shift extends along the supply chain. More car sharing will result in more utilization and therefore more wear and tear, which in turn will have a positive effect on repair and maintenance revenues. New mobility business models will impose pressure on connected vehicle data, which is required to deliver coherent customer-focused services and outcome.The type of vehicle data might vary from current mileage, fuel level, GPS location to active warnings and diagnostics trouble codes (DTCs), but will need to be exchanged across multiple platforms and made available for third parties to develop new services. It is obvious that vehicle data will drive the automotive and mobility economy massively.
Not surprisingly, some OEMs have recently decided to restrict access to the OBD port which allows third parties and independent workshops to capture vehicle data via a dongle or a telematics device. Instead, vehicle data is to be “permissioned” by the OEMs via a centralized server. Today, BMW delivers vehicle data, collected from over 8 million connected cars, through the “cloud” to third parties such as insurance companies and repair workshops. The visibility of data is only possible with the customer’s consent. Toyota has teamed up with NTT to build a global vehicle data platform. Meanwhile, Ford is building a $200M to secure vehicle data strategy.
Neutral vehicle data platform
While OEMs are building their own data platforms, big data consumers such as petrol retailers, insurance companies and independent repair workshops are showing interests in having access to data from all vehicle brands through a single platform. For this reason, the ACEA (European Automobile Manufacturers' Association) is proposing a framework called Extended Vehicle, which addresses not only access to the data but also how access can be enabled via a “neutral” vehicle data platform provided by trusted third-party. As a result, a number of start-ups are paving the way to take their position in this space as vehicle data brokers. Amongst these brokers, Caruso and Otonomo are two recent examples.
What EU legislation says about vehicle data?
With the advent of GDPR (General Data Protection Regulation), the European Commission intends to strengthen and unify data protection and privacy of European citizens. In particular, Article 20 aims at preventing data monopolization, allowing consumers to manage and dispose of their data. As a result, no vehicle data can be transmitted without customer consent.
What the future landscape looks like
It is too early to say what the future landscape of vehicle data sharing will look like. One thing is likely: OEMs will take control of the connected vehicle data with their own cloud platforms meaning that access to vehicle data will not be provided free of charge.
A global ecosystem of connected vehicle data through a neutral data platform provider makes perfect sense. However, to be successful the platform provider must be seen as a neutral, trusted third-party that delivers operational excellence and a high standard of cyber security protection, at the same time as taking care of all privacy protection obligations.
The neutral data platform provider cannot simply position itself as traditional cloud provider but must be a multi-sided business partner to OEMs data consumers.