telematics control unit Archives

Connected Car Sales Grew 12% YoY in 2022 With Volkswagen Group in Lead

Volkswagen Group led in connected car sales, closely followed by Toyota Group.
4G cars captured more than 95% of connected car sales in 2022.
Tesla broke into the top-10 connected car sales rankings for the first time.

New Delhi, London, San Diego, Buenos Aires, Hong Kong, Beijing, Seoul – April 24, 2023

Global connected car sales* grew 12% YoY in 2022 with the share of connected cars in the overall car sales exceeding 50%, according to the latest research from Counterpoint’s Smart Automotive Service. The US remained the strongest market for connected cars followed by China and Europe. These three markets accounted for nearly 80% of the total connected car sales globally in 2022. Despite having a relatively small share of connected car sales, Japan experienced the highest growth in connected car penetration.

Commenting on the market dynamics, Research Analyst Abhilash Gupta said, “The penetration of connectivity in cars improved during 2022 after struggling in 2020 and 2021. In 2022, new facelift versions of older models like the Honda Civic, Toyota Corolla, Ford Escape and Chevrolet Equinox were introduced with upgraded 4G connectivity and new features. Some prominent features include remote lock/unlock, remote engine start/stop, climate control, vehicle status, location tracking, geofencing, emergency assistance, in-cabin music, video streaming, and over-the-air updates. Next-generation vehicles are being introduced with various connected and autonomous features that require high-speed internet access available through 5G. However, as of now, 5G remains a niche, available only in premium cars like the Ford F-150 Lightning, Cadillac LYRIQ, Mercedes-Benz EQS, Audi e-tron GT, BMW iX and GWM Haval HG.”

Gupta added, “With consumers’ focus shifting to connectivity in the car, non-connected car shipments are steadily declining. The top five automotive groups accounted for nearly half of the connected cars sold in 2022. Volkswagen Group led the charts in terms of connected car sales volume, closely followed by Toyota Group. Tesla broke into the top 10 for the first time.”

Commenting on the market outlook, Senior Analyst Soumen Mandal said, “The shift towards digitization in cars is increasing at a rapid pace and is visible in the consistent rise of connected car penetration globally. Currently, 4G dominates the connected car market with almost 95% share. But as the automotive market is transitioning towards electrification, software-defined vehicles and autonomy, the need for seamless and faster in-vehicle connectivity will be fulfilled through 5G. By 2030, more than 90% of connected cars sold will have embedded 5G connectivity. Connected car sales are expected to grow at a CAGR of 13% between 2022 and 2030.”

* Sales here refer to wholesale figures, i.e. deliveries out of factories by respective brands, and consider only passenger cars with embedded connectivity.

The comprehensive and in-depth ‘Global Connected Car Tracker, Q1 2019-Q4 2022’ and ‘Global Connected Car Forecast, 2019-2030F’ are now available for purchase at report.counterpointresearch.com.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Abhilash Gupta

Soumen Mandal

Peter Richardson

Counterpoint Research

press@counterpointresearch.com

Related posts

How Connected Vehicle Data is Shaping the Automotive Industry

The connected car market is growing, and cars are becoming more connected than ever before, and this will continue as the Counterpoint Connected Car study predicts that more than 70% of the cars sold will be connected cars in the year 2025. The data generated by the vehicle includes information about the vehicle status, driver’s behavior, and location-based data. With the emergence of Electric Vehicles (EV) and more driving safety features, connected vehicles become more relevant. This available vehicle data is “gold” for OEMs, suppliers, insurers, mobility providers, fleet owners and much more. However, most players especially OEMs failed to take the opportunity to monetize the car data. In this blog, we will be learning about connected car data, why OEMs failed to monetize the data and lastly, talk about the connected vehicle data platforms and the players.

What makes a car “connected’’?

A car is connected if it has internet access, which allows the car to share internet access and data with other devices inside the car and/or devices, networks, services outside the car as well as other cars, homes, offices, or infrastructure. A connected car is connected through two types of connectivity solutions: tethered or embedded.

An embedded connectivity solution is built into the vehicle using embedded hardware called a Telematics Control Unit (TCU). The telematics unit has an integrated modem that establishes the connection between the car and the network. For the vehicles that don’t have a built-in TCU, services can also be provided via devices that are brought in by users, like smartphones or wireless dongles (connected to the vehicle’s On-Board Diagnostics (OBD) port), such connectivity solutions are termed tethered or, sometimes, a Bring Your Own Device (BYOD) solution.

Use Cases for Vehicle Data

The connected car data presents the opportunity to monetize the data through different business models. The vehicle data can be used to elevate the consumer experience or offer new services or improve the vehicle’s performance. The various applications of car data are as follows:

Usage-based Insurance
Predictive Maintenance
OTA updates/upgrades
Fleet management
Traffic Management
Roadside assistance
In-car advertisements
In-car payments

OEM’s slow approach to capitalize on the car data

At the outset, OEMs struggled to capitalize on car data as they wanted to be in control of the data at every part of the value chain even though they were not in a good position to do so. Moreover, automakers lacked the resources and skills needed to leverage the data into meaningful insights. In addition, connected cars produce huge amounts of data. Storing the data, and who owns the car data, became a big question for carmakers. As per the European Union’s (EU) regulation, 2018/858, car manufacturers should share connected car data with third parties. Some of the OEMs, like GM, were the first to monetize the data services. Now, with the introduction of data aggregators like Otonomo or Wejo, almost every OEM is looking to monetize vehicle data.

What are the Data Aggregators?

Data aggregators are the companies that offer a platform for the collection, storage, analysis and sharing of the data from OEMs, Telematics Service Providers (TSP), or fleets. These companies process the raw vehicle data from various car companies and follow the privacy norms according to the relevant regulations. The processed and standardized car data is then ready to sell/share through a marketplace or as APIs to different entities such as insurance companies, mobility companies, governments, etc. Examples of such companies are Caruso, High Mobility, Otonomo, Wejo and some established player like HERE. In this blog, we will focus on Wejo and Otonomo.

Wejo

Founded in 2014, Wejo went public in 2021 through the SPAC merger with Virtuoso Acquisition Corp. The company is backed by GM and Palantir. It has two business solutions, Wejo Marketplace and Software and Cloud solutions. The marketplace includes a data visualization platform called Wejo Studio. In the last quarter of 2021, Wejo introduced its software and cloud solution. It has partnered with Microsoft to build its suite of data and intelligence solutions on the Azure cloud platform. This year at CES, Wejo announced its analytical platform specifically designed for connected, electrical and autonomous vehicles leveraging its partnership with Microsoft Azure and its data platform called Wejo ADEPT. The platform will only collect the most relevant data by filtering and then analyzing the connected car data at the edge before transferring it to the cloud. Wejo plans to expand its offerings into five new services.

Source: Wejo

Wejo has a strong partnership with OEMs and Tier-1 suppliers, by the end of 2021, it had partnered with 22 OEMs and Tier-1 suppliers. Leveraging its relationship with OEMs it has 16.1 million cars on its platform out of which it receives data from 11.8 million vehicles and processes nearly 16 billion data points per day, mainly in the US. Its customer base includes 68 companies, and most of the revenue (90%) comes from the US through its Marketplace services.

Source: Wejo

Financial Highlights

The full-year revenue amounts to $2.6 million which is a 92% growth from last year. The fourth-quarter revenue contributed to $1.4 million which is 180% higher than the same period last year.
The net loss increased from $60.3 million in 2020 to $217.8 million in 2021
The total contractual value increased by 68% to $20.5 million

Otonomo

The company was founded in 2015 with its headquarters based in Israel. The company went public in August 2021 through the SPAC merger with Software Acquisition Group. Otonomo offers a Vehicle Data platform and marketplace and, after the acquisition of Neura, it leverages its capabilities and offers a mobility intelligence platform. In addition to the platform and marketplace, Otonomo also offers API solutions for real-time data and historical vehicle data.

Source: Otonomo

It has partnered with 22 automakers on vehicle data agreements. The platform has 50 million vehicles with 4 billion data points per day. Otonomo uses Amazon cloud to host its platform. By the end of 2021, it had 55 customers from different industries. In February 2022 it has made another acquisition of the company known for telematics-based insurance technology.

Source: Otonomo

Financial Highlights

In 2021 the revenue grew by 337% to $1.7 million as compared to last year. The fourth-quarter revenue amounts to $1.1 million compared to $0.21 million in the same period in 2020.
The net loss for 2021 is $30.9 million as compared to the $20 million in the previous year.
EMEA contributes approx. 71% of the revenue followed by APAC with 19% and the rest North America
Three companies/customers accounted for 55% of its revenue. Hylabs ltd is the biggest contributor with approximately 28% followed by Mitsubishi Motors with 14% and Neotec Bio with 13%.

Conclusion

Even though both Otonomo and Wejo are data aggregators, they differ in their technology capabilities and business approach. Otonomo provides vehicle data for various use cases across different verticals but lacked visualization capability. While Wejo has visualization capabilities, it lacks solutions for different use cases, although it plans to launch some in 2022. Otonomo is playing aggressively and looking to consolidate new resources and capabilities through acquisitions and thereby bringing new customers and increasing the addressable market. Wejo, on the other hand, relies on developing its product or new services through partnerships with global technology players.

Wejo currently does not offer any solution or services to developers through its own API whereas Otonomo has its own API, which allows developers or new service providers to have access to vehicle data. Lastly, Otonomo and Wejo are each strong in one region – Europe and USA respectively.

We have also published a report on the location platforms where we also analyzed and evaluated 25+ platform players like HERE and Otonomo based on the CORE (Competitive Ranking & Evaluation) framework.

Overview of the Otonomo and Wejo

Source: Counterpoint

Global Telematics Control Unit Shipments Grew 13% YoY in 2021

LG led the global TCU market in 2021, followed by Continental and Harman.
US, China and Germany were the top three geographies in the global TCU market.
5G is still a niche segment, capturing less than 1% of global TCU volumes.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – April 7, 2022

Global telematics control unit (TCU) shipments grew 13% YoY in 2021, according to the latest research from Counterpoint’s Global Telematics Control Unit Tracker. This growth came despite the COVID-19 outbreak and supply chain shortages, and was driven by the rising penetration of connected cars and the consumer preference for digital features. Moreover, favourable government policies such as eCall mandates are also helping this market to grow. The global ASP (average selling price) of TCUs increased slightly in 2021 due to the rising cost of 4G chipsets. We expect the supply situation to remain constrained through much of 2022.

Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “LG leads the global TCU market, followed by Continental and Harman. These top three players account for nearly three-quarters of the market.

LG’s TCU shipments grew 19% YoY in 2021. Its close relationships with GM and Volkswagen in the Chinese and US markets are helping LG maintain its leadership position. LG is leading across all major regions except Europe.

Continental, the second-largest TCU player, has a good hold on the European market, especially Germany, France and UK. However, it lost around 2% market share in 2021 compared to 2020. Continental launched 5G TCUs in early 2022 to target 5G opportunities in the automotive sector. We expect this to help Continental regain share in the coming quarters.

Harman, the third-largest player, is mainly focused on the luxury car market. It is already offering 5G TCUs with leading premium brands. Harman’s expertise in the automotive industry and its strong distribution channels via Samsung will likely help it to win more deals and improve its position.

Among other brands, Denso and Visteon made big improvements in the TCU brand ranking list for 2021. The partnerships between Denso and Toyota, and Visteon and Ford are proving beneficial for these brands.”

Source: Counterpoint Global Telematics Control Unit Tracker, Q4 2021

With technology transitions, 2G and 3G are unable to meet the data demands of cars. And with especially 3G being phased out, 4G and 5G are becoming the only viable options. Currently, more than 90% of connected cars are using 4G TCUs. However, 4G is reaching maturity. We have already seen a few 5G chipsets, NAD modules and TCU launches in 2021. We expect more cars will be equipped with 5G connectivity this year. Moreover, increasing penetration of autonomous vehicles and C-V2X deployment will help in 5G adoption as well.

Looking at connectivity trends, Research Analyst Mohit Sharma said, “As we move to higher levels of autonomy, the amount of data generated by ADAS sensors will surpass 400MB/s. To process all this data, high processing power will be required. In addition, more sophisticated AI algorithms will be required along with large volumes of data storage. The industry has to shift to 5G for cloud computing. 5G will provide more than 30 times faster data speeds and promises to reduce latency by 10 times.”

Autonomous vehicles, connected cars and electrification are the main trends shaping the future of mobility. Connectivity will be the backbone of these systems. OEMs are enhancing existing connectivity services like infotainment and OTA software updates while adding newer services like custom entertainment packages and insurance. Automakers are pushing connected services to diversify their revenue streams and more closely understand the overall customer behaviour to improve their car’s performance and services.

Source: Counterpoint Global Telematics Control Unit Tracker, Q4 2021

On future perspective, Associate Director Brady Wang said, “Global TCU shipments are expected to grow at a CAGR of 15% during 2020-2025. In terms of value, the TCU market will grow more than twofold to reach $7 billion by 2025. The rising penetration of higher-priced 5G TCUs is one of the major reasons for this huge growth. In terms of shipments, 5G will be the fastest (206%) growing technology during the forecast period.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint tracks and forecasts on a quarterly basis 10+ TCU brands’ shipments, revenues and ASP performance across 4 cellular technologies and 10 major geographies.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Soumen Mandal

Brady Wang

Mohit Sharma

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

More than 431 Million Telematics Control Units Will Be Shipped Globally During 2019-2025

LG, Continental, Harman, led the global automotive Telematics Control Unit (TCU) market in 2018. 4G and 5G TCUs to account for most of the shipments by 2025. 2G/2.5G TCUs will cease to sell post-2021.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – September 11, 2019

The global automotive TCU market is expected to grow at a rate of 14% CAGR during the 2019-2025 period, with cumulative shipments crossing 431 million units, according to the latest research from Counterpoint’s Smart Automotive service. The data represents the global TCU shipments for all vehicles including passenger cars⁽¹⁾, light commercial vehicles (LCVs), heavy commercial vehicles (HCVs), and buses.

In 2018, the eCall mandate in Europe continued to drive global TCU shipments. However, the growing adoption of embedded connectivity by Japanese and German automakers, coupled with rising demand for connected vehicles in China and the US, will drive the market during the forecast period.

Commenting on the findings, Aman Madhok, Senior Analyst at Counterpoint Research said, “In terms of market share, LG leads the market, catering to close to a quarter of the total market demand, followed by Continental. GM is the major customer for LG, as most of its sales in key markets like the US and China are connected cars. However, LG should continue to diversify its customer base to maintain its market leadership position during the forecast period.”

Exhibit 1: Global Telematics Control Unit Shipments % Share 2018 – by Brand

Discussing the various brands’ performance, Hanish Bhatia, Senior Analyst, highlighted, “Continental shipments continued to grow in 2018, with rising penetration of cellular connectivity within German automakers. Also, Denso has been working with Toyota for the Lexus brand till now, and the association will likely continue as Toyota adds embedded connectivity to its top-selling vehicles in the future”.

Looking at the connectivity technology, Satyajit Sinha, Research Analyst, said, “Global shipments of 2G/2.5G based TCUs continued to decline in 2018 and would cease to sell post-2021. Backward compatibility or ‘fallback’ technology in TCUs is encouraging automakers to embed the latest connectivity module in TCUs. Moreover, leading telecom operators like AT&T and Vodafone have plans to shut their 2G/3G networks during the forecast period, in many countries to free spectrum for 4G and 5G.”

Resonating similar thoughts, Vinay Piparsania, Consulting Research Director added, “Today, it takes three to four years for car design to be approved and move to the factory. And once sold, the car can be on-road for another ten years. Hence, automakers must plan for 15 years while designing connectivity in their cars, making sure they can differentiate their cars and customers get fast connectivity during the car’s entire life.”

“High bandwidth cost of 5G will limit the penetration of 5G TCUs to 16% by 2025. However, the share of 4G TCUs in total sales will continue to decline in the long-term, aided by declining bandwidth costs of 5G,” Piparsania added.

Commenting on the connected car evolution, Neil Shah, Research Director said, “Autonomous vehicles and connected cars are two important trends shaping the automotive industry. Even though autonomous vehicles are getting all the hype, it is connected cars which are gaining traction. OEMs are enhancing existing connected services including infotainment and predictive maintenance while adding newer services like insurance. Automakers and service providers are pushing connected services to gain from additional revenue stream, especially amid slowing automotive sales. The TCU’s transformation into a ‘gateway modem’ on steroids or the central brain is inevitable, which will power the car’s connectivity. TCU and related component vendors are set to play an important role in the automotive supply chain.”

Note:

Includes SUVs, MUVs, and high-performance vehicles

The comprehensive and in-depth ‘Global Telematics Control Unit Market Tracker 2019’ from our Smart Automotive service is available for purchase at report.counterpointinsights.com. Please feel free to reach out to us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

The Counterpoint’s Smart Automotive research for TCU is based on total shipments estimates based on supply chain checks, company’s IR results, vendor polling triangulated with sell-through (sales), and secondary research.

Analyst Contacts:

Aman Madhok