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Short-term and long-term IoT trends within the automotive industry

European car sales have seen the sharpest drop on record in the year of 2020 due to the impact of the COVID-19 pandemic. The European Automobile Manufacturers’ Association (ACEA) predicts that the first steps towards recovery will be marked in 2021. The automotive industry is highly competitive and Europe’s automotive sector must be strengthened to remain relevant on the global stage.  

To remain a relevant industry, investments must be made, stressing the importance of innovation within the sector. Developments in the field of the Internet of Things (IoT) implemented by automotive manufacturing make for more advanced and new services. This means cars can constantly connect to the adjacent ecosystem in real-time. By communicating with other vehicles and e.g. road sensors, users will experience a smooth and safe journey.

An example of a short-term IoT trend within the automotive industry is eCall. This system alerts the police and/or ambulances to bring accurate assistance to road users involved in collisions. The eCall system is mandatory for new models from 2018 onwards per European regulation. Another short-term trend can be found within User-Based Insurance (UBI) models. UBI models use in-car sensor data to classify the level of risk and these models have proven to be helpful with achieving accurate risk-level classification.

In the long term, the development of 5G will also influence the use of real-time data. The usage of 5G-networks will improve mobile data communication and impact the connection between cars and their surroundings. The concept of Mobility as a Service (MaaS) will influence the idea of ownership in the long term. To build on integrating the automotive industry with other innovations, there also is the trend of connecting smart cities with connected cars. This mentality involves creating a solution for different changes, such as urban development, traffic systems, and decreasing emissions contributing to smart cities.

The Advanced Technology for Industry (ATI) project has recently published a report on IoT components in connected and autonomous vehicles. This report maps the value chain of IoT for connected and autonomous vehicles and the key actors. This provides an analysis of the EU’s competitive positioning therein and indicates related challenges and opportunities. For more information, read more about the ATI project.