Telematics shipments in India are expected to reach 50 million units in 2030 at a CAGR of 31% from 2021.
Rising demand for EVs, ubiquitous 4G connectivity and favourable policies will act as potential drivers.
According to Counterpoint’s CORE evaluation, iTriangle leads the overall rankings for India’s telematics ecosystem, followed by Teltonika and Bosch.
New Delhi,London, San Diego, Buenos Aires, Hong Kong, Beijing, Seoul – November 25, 2022
India is the world’s second-largest automotive and mobility market in terms of production volume. It offers significant opportunities for connected telematics due to its sheer scale as well as the growing design and manufacturing ecosystem. Telematics penetration in 2021 was just 2% of the total number of vehicles on the road. According to Counterpoint’s India Telematics Ecosystem Analysis, telematics shipments are expected to reach 50 million units in 2030 with a CAGR of 31% from 2021. Currently, iTriangle leads the overall rankings for India’s telematics ecosystem in Counterpoint’s CORE evaluation.
Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “Presently, India’s telematics market is at a nascent stage but there is a steady demand for telematics devices. High import dependency, lack of advanced technology adoption, and infrastructure challenges have all been inhibitors. However, the rising demand for electric vehicles, ubiquitous 4G connectivity, favourable government policies, and schemes related to design and manufacturing, such as PLI and Make in India, will act as potential drivers for the demand for connected telematics devices for different mobility applications.”
To understand the future trajectory of India’s telematics space, Counterpoint Research analysts evaluated the top 15 players using the proprietary CORE analysis technique.
iTriangle leads the overall rankings for India’s telematics ecosystem, followed by Teltonika and Bosch. With the growing market demand, domestic players such as Blackbox, Rosmerta, Nippon, Accolade and Volty are expected to give strong competition to top players in the coming times.
iTriangle’s expertise in different aspects of manufacturing and ecosystem creation has pushed the company to initiate business in Thailand and other Southeast Asian markets. iTriangle is one of the few Indian companies to cross international borders in the telematics space.
Detailed insights into the Indian telematics market opportunity, devices, policies, use cases and recommendations are all captured in a comprehensive white paper published on our portal.
Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.
Background
CORE is a competitive ranking evaluation that evaluates a player across important criteria. For the study of Indian telematics players, Counterpoint took seven categories and more than 45 sub-categories under its CORE analysis. Each of the categories and sub-categories was selected carefully so that they reflected the existing market, current developments, future trajectory and market acceptance of each player. Counterpoint ranked each of the top 15 players on a scorecard based on the latest publicly available information and primary interviews based on the above categories. Exhaustive secondary research was conducted to gather all the information available publicly.
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.
India’s Connected Vehicle event is back offline after two years. Held in Bengaluru from May 4 to May 6, the event saw attendance from the chipset, NAD module, telematics, cybersecurity and mapping domains, besides regulatory bodies and communication service providers within the connected and autonomous vehicles ecosystem. Analysts from Counterpoint Research were also present. Here are their key takeaways from the sessions held at the event.
Connected, Autonomous, Shared, Electric and Smart Mobility
India is lagging in connected car penetration (17%) compared to the global market (43%). However, the country is also preparing for a shift towards smart electric mobility and focussing on local manufacturing. Such events will help Indian ecosystem players to remain updated on the latest in the field around the world and prepare themselves for the coming transformation.
5G Automotive Association, Tata Elxsi, Dell and what3words participated in this session and discussed the need for C-V2X technology for better communication, opportunities for ecosystem players from connected mobility, a paradigm shift from hardware to software-centric approach and a unique mapping solution that uses three keywords.
Source: Counterpoint Research Smart Automotive Services, 2022
Shifting Future of Automotive Industry to Top Gear with Connected Mobility
The rising demand for safety and comfort features is helping to increase connected car penetration. We expect more than 70% of cars will be connected by 2025 in the global market and one in four cars will have 5G connectivity. However, connectivity penetration will be lower than 40% in India by 2025.
This session mainly focussed on safety during driving, challenges in handling data generated from vehicles, creating actionable insights from telemetry data, and collaborative effort among OEMs and Tier-1 suppliers to make this transition smooth. Intel, Zeliot, VE Commercial Vehicles and Danlaw shared their understanding of this transition.
Driving Towards Connected, Secure, Autonomous & Electric Mobility
In the future, cars will be driven by software. We have already witnessed smartphone players such as Foxconn and Xiaomi entering this market. Data will be the new fuel and nearly 30% of the automotive market value will come from software and services. Moreover, electronic content in a car will rise with increasing smart electric mobility penetration.
According to Counterpoint’s latest research, India’s automotive electronics market will triple by 2027, driven by rising income levels and increasing customer preference for in-vehicle digital experience.
Collaborative efforts of all ecosystem players, whether OEMs, Tier-1 suppliers, regulatory bodies, system integrators or service providers, are important for a successful transition. The Indian government is also working to come up with AIS189 and AIS190 standards for connected vehicle security. Continental and Bosch share the same view on this topic and think a collaborative effort will be the key to connected mobility success in India. Secure Things highlighted how our vehicles are becoming more prone to safety issues and hacking. Both hardware and software level security will be required as preventive measures.
Emerging Technologies – Riding the Next Wave of Connected & Autonomous Mobility
Connected mobility is undergoing dramatic changes. Earlier, we used to connect smartphones to a car via Bluetooth or cable. Today, most cars come with embedded connectivity. In the future, cars will be able to communicate with other vehicles, pedestrians, networks, infrastructure, grid and home.
The upcoming connected and autonomous era will induce a huge influx of data for which substantial storage will be required. We expect Level 4 cars will require more than 1TB of data storage by 2025. Moreover, 30% of cars sold globally will support Level 2 or above. Western Digital is working on automotive storage products. It believes that one day storage will be a key feature at the time of selecting a vehicle. During this session, Bosch introduced Mobility Cloud Platform and Mobility Marketplace. This platform can support other IoT applications such as industrial and enterprise.
Download the full analysis from event sessions below:
ADAS – A Game Changer for Safe and Autonomous Driving
MG Motors introduced ADAS in India for the first time back in 2019 through its L1 SUV Hector. Even as ADAS technology is rapidly gaining acceptance in the global market, India is not that far behind. Currently, L2+ autonomy is being offered in most premium vehicles. With the changing landscape of vehicle architecture, the incorporation of ADAS will be easier and more cost-effective.
Windriver and Hexagon showed how the changing vehicle architecture will benefit system integration and deployment of autonomy. While Windriver has expertise in test and analysis of vehicle architecture and software and ADAS system, Hexagon helps deploy autonomy across sectors and platforms by blending the digital and physical worlds. Hexagon uses ML algorithms to create a simulation through well-captured surround photos. The simulation helps understand how a situation will look with automation, and also increases the accuracy of the automated process.
Shaping the Future of Mobility with IoT, Connectivity & Sustainability
The mobility roadmap is hugely dependent on connectivity. OEMs are constantly innovating to make the journey more pleasurable with better IVI system, better navigation, CV2X and ultimately autonomy, which will not be possible if a proper vehicular connection is not established. According to our research, global cellular IoT module shipments are expected to cross 1.2 billion units by 2030 with a CAGR of 12%. 5G will be the fastest-growing (60%) technology, followed by 4G Cat 1 bis, during 2022-2030. Among cellular IoT modules, global NAD module shipments are expected to reach 80 million by 2025, growing at 14% CAGR from 2021, with one out of every five connected cars projected to have embedded 5G connectivity by then.
Leading frontline companies like Cavli Wireless and MediaTek have shared some details about how they plan to increase connectivity across the automotive industry. As the future bets on autonomy, connectivity benefits are not just limited to in-vehicle internet browsing and autonomy but also extend to vehicle accident prevention, better navigation, precise tracking and more. In short, increased connectivity will enable a sustainable digital ecosystem that, if used properly, holds immense development potential.
Intelligent Transportation System to Promote Safety & Improve Mobility
Increased vehicle connectivity has made transportation safer, more reliable and timelier. Along with changing architecture and increased integration of improved software, the addition of newer technologies is becoming easier.
Intellicar, Skoda, and IBM took the stage to showcase how intelligent transport solutions could tackle some of the general and critical issues of the industry. Intellicar has a solution line from hardware and firmware customization to a low-latency data directory. Skoda showed how intelligent systems can reduce road accidents. IBM provided a global overview and discussed its strength as a software developer and system integrator.
Protecting Software-defined Vehicles with Cybersecurity Solutions
With the increased use of software and internet, present-day cars are no less than a computer and like every other computer, cars are also exposed to cyber threats like malware. If the system used in vehicles is not properly protected, a lot of damage can happen, including loss of life. Therefore, strong and effective anti-virus protection with an improved firewall is much required.
Escrypt, a cyber threat protection company, was of the view that vehicle data safety could be ensured through blockchain-based communication systems, smart gateways, cyber digital twin, AI-based detectors and other encryption systems.
Charting the Future of Connected Mobility with Automotive Telematics
The growing automotive sector holds a lot of potential for the development of new and smart technologies. The transition from conventional vehicles to EVs is also paving the road toward a sustainable connected future. Technologies that were limited to certain fields earlier are finding their way into the expanding automotive space. The use of security systems, blockchain, data tokenization and other platform-based and protocol-based technologies and services is penetrating the automotive space, making the sector more flexible, versatile and user-friendly.
Source: Counterpoint Research Smart Automotive Services, 2022
Market Outlook
Emerging technologies such as ADAS/AD, in-vehicle connectivity, upgraded cybersecurity for the software-defined vehicles, electric vehicles and connected vehicles are taking centre stage as the automotive industry undergoes a paradigm shift. The automotive supply chain is dynamically changing as well, with OEMs making huge investments and starting to adopt digital services to remain future-proof and not cede revenue monetizing opportunities to technology companies. Apart from traditional auto OEMs, the involvement of non-automotive tech companies has been increasing in this space. The future of the automotive sector will be heavily dependent on digital technology. Due to traditional auto OEMs’ lack of expertise in digitalization, non-automotive companies are partnering with them to secure a market share in this growing space.
The global automotive industry has been in turmoil since 2020. The industry and its supply chain were initially disrupted by COVID-19, and then by supply chain chaos when the sector was unprepared for the demand rebound.
With the semiconductor shortage beginning to ease, 2022 was expected to be a better year, as indicated by increased sales during the initial months. But Russia’s invasion of Ukraine and fresh COVID waves in China have further delayed the industry’s recovery. Restricted supplies of critical raw materials procured from Ukraine and Russia are causing new supply chain impacts, driving up raw material prices including that of lithium, cobalt and nickel – the latter by 60% – as well as aluminium and, to some extent, steel. Furthermore, gases used in the production of semiconductors are also impacted – although the overall effect is unlikely to be immediately material. To cope with these cost increases, automakers across regions have reluctantly increased their vehicle prices, despite the likely impact on demand.
China
The Chinese automotive sector is contending with a double whammy – subsidy cuts and sharply increasing materials prices. The country’s government cut subsidies on NEVs (New Energy Vehicles) by 30% in 2022. This was long planned but will impact demand right at the point where escalating costs are increasing prices:
Tesla increased the price of its cheapest Model Y by more than $2,000 in March. The recent inflationary pressure on raw materials and logistics forced Tesla to then make a further price increase, the second time within a week, which looks like bad planning or miscommunication as much as a forced price increase.
Leading Chinese electric vehicle (EV) manufacturer BYD increased prices by $500-$1,000 depending on the model and specifications. BYD is developing and producing LFP batteries in-house but still increased prices twice this year.
Xpeng, a rising Chinese EV start-up, followed in the footsteps of larger OEMs to increase prices by $1,500-$3,000. Smaller OEMs may find it harder to control costs and compete with larger OEMs as they have less control over supply chains.
Other important auto OEMs such as Chery, SAIC, Hozon Auto and Wuling Motor also announced price increases for NEVs.
ORA has been forced to stop taking new orders due to a shortage of chips and other core components.
US
The US recently released its EV policies which are designed to push up EV adoption rates. But the Ukraine crisis and geopolitical tension with China may hinder the country’s plans. The US imports a major portion of its rare earth metal requirement for vehicle production.
To become self-sufficient and to keep the EV adoption progress on track, President Biden may include these rare earth metals under the Defence Production Act, which will enable the country’s mining industry to extract and refine these metals. Mining in the US has been restricted due to its environmental impact. Any resumption of broader domestic mining activity will eventually lead to price decreases, but this is not a quick fix.
Automakers are increasing prices to deal with supply chain situations and simultaneously building inventories as a hedge against future supply chain shocks. The largest EV manufacturer in the world, Tesla, increased prices by $2,000-$12,500 depending on the model from the third week of March. Ford has made significant price increases across several models. The F-150 Raptor was subject to the biggest increase ($3,300).
Europe
The ongoing Ukraine crisis has forced European automakers to halt production lines as the supply of critical auto parts has been severely hit. Moreover, in solidarity with Ukraine’s fight against Russia, automakers have withdrawn from Russia.
Auto OEMs such as Volkswagen, BMW and Porsche temporarily shut down plants to deal with the supply chain disruption. European automakers are dependent on Russia and Ukraine for the supply of raw materials for battery production, wire harness, neon gas and more. However, the level of dependence isn’t so high, which is one reason European automakers haven’t increased prices compared to other regions. There may be another reason, like profit margins, which are higher for European automakers and can absorb some of the extra costs.
Inflation across Europe reached 7.5% in March 2022, up from 5.9% in February. Though no OEMs operating in Europe, except Tesla, have announced price increases so far, we expect them to do so soon. The rising prices of petrol and diesel in Europe have created a favourable market for EVs, so automakers don’t want to disrupt EV demand by increasing prices.
Japan
The Japanese government removed most-favoured-nation (MFN) treatment for Russia over its invasion of Ukraine. This increased import tariffs by 3% to 10%. The demand for aluminium for automotive applications is rising due to the growing demand for lighter-weight products in line with the shift towards electric mobility. For these reasons, the Japan Aluminium Association is also concerned about price hikes, which may slow down BEV adoption in Japan.
German automakers Volkswagen and Mercedes-Benz raised prices by an average of 2% and 1% respectively. Jeep increased prices by 13% from March.
Japanese automakers including Toyota and Honda are resisting price hikes for now, while Nissan is reducing optional equipment and vehicle grades to cope with increased costs. For example, it is eliminating manual transmissions and narrowing the combination of best-selling models.
India
India’s government had extended its Faster Adoption and Manufacturing of Electric vehicles-II (FAME-II) program by two years until March. This initiative is further supported by the Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage. India is trying to become a world-class manufacturing destination and more self-reliant in terms of production. As India’s automotive industry is dependent on other countries such as China and Japan for automotive parts, it is becoming difficult for automakers to control input costs.
Indian automakers are also reacting to raw material price hikes by increasing car prices by at least 2%. KIA Motors has increased prices of all its vehicles. Maruti Suzuki, India’s largest passenger vehicle (PV) maker, has also increased the average price of its cars by 8.8% since January 2022. Toyota, Tata Motors, Hyundai and MG Motors have also increased prices for their vehicles across ranges. Even premium vehicle brands such as BMW India, Mercedes-Benz India and Audi India have announced at least a 3% increase in their vehicle prices.
Due to the low EV adoption, high prices of lithium and cobalt have not directly impacted the industry. The price hikes in India are mostly due to the rise in the price of steel. Steel is used in manufacturing vehicle chassis and body. Nickel-containing stainless steel is used in some drivetrain components.
In addition to rising materials costs, fluctuating exchange rates and rising operational costs are other factors driving price increases.
Counterpoint’s Take:
The recent cost increases have already affected the EV industry. 2021 saw EV sales rising by more than 200% but price increases are likely to put the brakes on a continuation of this fast growth. However, while EV sales will slow, sales of conventional ICE vehicles will see more significant declines due to the global fossil fuel price inflation. For 2022, we expect global passenger vehicle sales will be around 72 million, some 5 million units lower than our earlier projections.
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