- In 2020, 92% of connected cars in the US were using 4G LTE networks.
- 80 million new connected cars will be added in the US during 2020-2025.
San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – July 7, 2021
The US connected car market managed to weather the COVID-19 storm with a moderate decline of 6.8% YoY in 2020, according to the latest research from Counterpoint’s Smart Automotive Service. The cumulative connected car shipments in the US are expected to cross 80 million units during 2020-2025 with a CAGR of 10%. The connected car data here refers to only passenger cars with embedded connectivity.
H1 2020 proved to be painful for automakers worldwide, with most of them forced to shut down their manufacturing facilities to curb the spread of COVID-19. In the US specifically, from March onwards, most OEMs, including Ford, GM, Volvo, Toyota and Honda, suspended their production for nearly two months. Other factors that exacerbated the production delays included the semiconductor shortage, the storm in February that knocked US Gulf chemical plants offline, and massive blackouts due to cold weather that led to petrochemical shortages. US car sales continued to recover during H2 2020, declining 3% YoY compared to 21% YoY during H1 2020.
Commenting on the US connected car market, Research Associate Fahad Siddiqui said, “Connected car sales grew 2% YoY during H2 2020 mainly driven by a growing preference for connected services and late entrants like Toyota and FCA catching up with mainstream brands like GM and Ford. GM remained the market leader, accounting for a quarter of the market in H2 2020. In collaboration with AT&T, GM has been offering OnStar 4G LTE connectivity in its vehicles since 2015. Today, more than 95% of its cars offer embedded connectivity, with customers enjoying a host of services ranging from hotspot and navigation to vehicle diagnostics. It is the plethora of services that a connected car offers right at one’s fingertips that attracts customers towards it.”
He added, “Collaborations with telecom operators are helping automakers deploy cars with embedded connectivity faster than before. AT&T has more than 30 brands using its network, some notable ones being BMW, Ford, Chevrolet, Jaguar and Honda. Verizon’s connected car portfolio, on the other hand, has a handful of OEMs, including Toyota, VW and Mazda, with plans to add more soon. AT&T is the preferred telecom operator due to the variety it offers in its data plans, customizations for specific vehicle models, and its collaborations with manufacturers to speed up research and development in the connected car ecosystem.
Research Analyst Soumen Mandal said, “The US connected car market is becoming mature. OEMs’ electrification plans and push for driverless technology are helping speed up this process. GM has increased its budget for electric and automated vehicles from $20 billion to $27 billion and plans to launch 30 new EVs globally in the next five years (over 20 of these are planned for North America alone). In 2022, GM will launch 5G-enabled cars in China followed by the US region. Ford, on the other hand, plans to deploy cellular vehicle-to-everything technology (C-V2X) in its models in the US beginning 2022.”
Speaking from the connectivity perspective, Research Vice-president Neil Shah said, “In 2020, 4G LTE cellular connectivity had a mammoth share of 92%. Going forward, we can expect 4G penetration to increase, with 3G being phased out slowly. 5G-enabled cars entered the market in 2020 but they were limited to China only. The US will see 5G cars in the market from 2022 onwards with BMW and Ford leading the foray. By 2025, 5G cars will account for more than a quarter of the connected car market. With the growing adoption of 5G connectivity, there is a need to make use of C-V2X technology for improved safety features, better infotainment options and a greater capacity to process large amounts of real-time data. Automakers’ bullish sentiments toward electrification and aggressive plans for employing 5G technology will help TCU suppliers in expanding their 5G portfolios.”
The comprehensive and in-depth ‘Recovering Passenger Car Sales Drive Connected Cars Market’ report is now available for purchase at report.counterpointinsights.com.
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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.
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