The Connected Car in the Internet of Things

We all might read the news earlier this year, how, according to a Gartner Forecast, in just a couple of years, there will be an estimated 250 million connected cars on the road enabling new in-vehicle services and automated driving capabilities. Further on the Internet of Things, 4.9 billion connected devices will be in use in 2015 and will reach 25 billion by 2020. These numbers are, to say the least, very impressive. However, where does that leave the industry today? Are OEMs and customers ready to process the massive stream of data? During this year’s Panasonic Automotive Innovation Summit 2015 in Berlin, Automotive IQ asked Roger Lanctot to provide some of his own insight on the topic. Mr. Lanctot works as an associate director in the global automotive practice. He’s involved in the automotive industry as an analyst and consultant for Strategy Analytics. Mr. Lanctot, you often describe the Internet of Things as a tsunami wave hitting the major industries. Looking at automotive, how well are OEMs, suppliers and customers prepared for what’s coming? I would say for OEMs, dealers, customers: everybody’s aware that there’s a wave of connectivity occurring elsewhere in the economy. However, it’s not really catching automotive companies in the way that it’s touching everything else like consumer electronics, mobile phones, smart-homes, etc. There’s a lot of talk about connective cars, but there really aren’t a lot of connected cars at this stage of the game –and certainly not from an Internet of Things perspective. IoT is virtually everything talking to everythingelse and connecting people to things and things to people, etc. We’re quite ways away from that in the automotive industry. But it’s fair to say that we’re already in the early stages of getting more and more connected features into the car – mainly infotainment systems but also the driving systems which also require connectivity. Most of the concepts around self-driving use connectivity, yes, such as in maps and so on. Do you feel that the demand for increasing connectivity is coming from the customer side? Or is it more driven by the OEMs? This is the problem. Right now, built-in vehicle connectivity – what the industry calls telematics – is not demand-driven. It’s not consumer driven. No one’s insisting on having telematics in the car. In fact the value proposition for having telematics in the car is entirely on the side of the dealer and the OEM: it’s not really there for the customer. The customer has his or her phone, and they’re perfectly happy with that connection. In fact, most people would be happy to just use the phone, but carmakers and regulators would like to see people connect the phone and more or less disable it. [inlinead] So here in Germany, if you so much as touch your phone while you’re driving you could end up paying one or two hundred euros for a ticket. Here it’s much stricter than in the US, but even there you’re not supposed to touch the phone. Carmakers are trying to make the embedded connection a little sexy by enabling Wi-Fi over it, which is a little silly because 80% of the time you’re driving by yourself and there’s not a lot you can do with a Wi-Fi connection in the car while you’re actually driving. When you get to your destination, perhaps, you could use Wi-Fi. But there must be some value to the whole proposition of connectivity – even at this early stage? I think, people appreciate the Tesla use-case where your software and maybe even your map are updated automatically, or you’re notified of a dangerous circumstance up ahead automatically. Maybe it’s also useful to be notified of a system glitch of some kind that you need to do something about. But these are not the things you go and buy the car for. I would have to say that clearly Elon Musk and Tesla anticipated that. People don’t want to be sold things that they would expect. So if you’re going to put a connection in the car, then I would expect that you would fix the software if something’s wrong with it. You wouldn’t make me have to go out of my way to download a file, take the thumb drive to the car, plug it in to a USB port and press a button so that it uploads and then I get a confirming message and so on. But car companies are doing that today because they haven’t provided for flawless updates. From an OEM’s perspective, this means: with great connectivity comes great responsibility? For the design process, all of that implies not that you would send the car out into the public before you were finished with it knowing that you could update it, but that it’s an ongoing process. You don’t just say, "Sold that car. Goodbye, we’re done with that," you’re always responsible for that vehicle. That lesson should have been brought home last year with all these millions of recalls for very old cars. We’re living with our products forever, including products that are not going to last 10 or 12 years like a car. We need to architect the system in such a way with the connection and software capability that we can reach out to that product and fix something that the customer would expect us to be able to fix. Also, we have to build that into the cost of the vehicle: people don’t want to pay a subscription for that. If we look at the increase of connectivity within cars, between cars, cars to infrastructure, cars to homes etc. There are concerns about security, privacy and data ownership. Are the OEMs and carmakers aware that this might be some kind of issue? I think OEMs would like some clear message from regulatory authorities with regard to privacy. This would preferably be something less rather than more restrictive. A move in the wrong direction was the ruling in Ansbach that said dashcams are illegal or you can’t use the data from a dashcam in a legal proceeding. In fact in Austria, dashcams are already illegal. This is absolutely ridiculous because you’ve got a camera on your phone, and you could put the phone on your dashboard. Does that make your phone illegal? Some rational authority needs to step in and stop overreach from regulators that can have collateral negative impacts. If the dashcam were ultimately to become illegal everywhere else, not just in Austria, well you can forget about the self-driving car. On security, I think the industry would like some guidance from the EU on what the minimum requirement is and what the carmakers are minimally expected or obligated to provide in terms of assurance on vehicle security. We need a testing regime or something that could certify that a system meets EU requirements for security, whatever they might be. This is not easily done but something needs to happen. What about the individual data profiles such as metadata from drivers? With regard to customer data: the data belongs to the customer but the customer can’t get their data right now. I would rather see regulators stay out of it but I’d like to see carmakers be more proactive about giving the customer control of and access to the data. Then the customer could say, "I want to share my data with my insurance company. I want you, Daimler, to share my data with this traffic platform here, because I want my data to be used to enhance my traffic data. I want to have my data because I want to play with my data. It’s part of my driving experience." Carmakers haven’t figured that one out. But I’m uncomfortable with regulators getting involved in that conversation. In that instance it would be, "You, Mr. OEM, have to provide some means of customer access." I don’t know if we want to go far into specifying which data exactly – I think that would be too much. But some kind of rough guidelines would be a framework for sure. Mr. Lanctot, thank you very much.

The Connected Car in the Internet of Things

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