Car Connectivity Increases as Automakers Look to 5G

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Automakers are testing cars with 5G wireless technology. With low latency and faster download speeds, the connected car could be one of the biggest beneficiaries of the new wireless standard, according to S&P Global Technology. However telecoms must build the 5G infrastructure. Since 5G is still a few years away for connected-car manufacturers, a hybrid 4G/5G system is more likely in the interim, the analysts believe.

Cellular vehicle-to-X, or C-V2X, technology encompasses the connecting of vehicle sensors to driving data such as speed, location, traffic, and other cars. At the January 2019 CES show in Las Vegas, Ford Motor’s connected-car Director Don Butler said the company will equip the entire lineup of Ford cars with 5G modems in anticipation of a 2022 rollout, according to S&P

The installed base of U.S. vehicles with embedded in-vehicle cellular (3G/4G LTE) systems reached nearly 41 million by year-end 2018, an increase of 22 percent year over year from just over 33 million in 2017. Most of the estimated in-vehicle cellular installed base in 2017 was made up of basic 3G telematics systems. In 2018, the 4G LTE installed base surpassed that of 3G. The introduction of 5G wireless networks will negatively impact 3G in connected cars as automotive original equipment manufacturers, or OEMs, increasingly move away from the older, limited-ability bandwidth. 

While 5G networks’ transmission speeds help vehicle-to-vehicle (V2V) and V2X communications by boosting efficiency and safety, the auto industry must innovate around the technology for mass-market adoption. 4G LTE is expected to be the primary connected-car wireless network, which S&P estimates should surpass 80 percent of total in-vehicle cellular systems in 2024.

Among the wireless providers, AT&T Mobility is the leader in terms of connected-car support. In 2018, AT&T added over 8 million connected cars to its network, a 25 percent increase from just over 6 million net adds in 2017. In the first quarter of 2019, S&P projects, AT&T added just over 2 million connected cars, up over 13 percent from the first quarter of 2018.

Toyota Motor Corp. has been the most notable holdout against external software makers for years, but the automaker announced early in 2019 that 2020 models of the 4runner, Tacoma, Tundra and Sequoia will feature Alphabet’s Android Auto. With nearly every auto manufacturer offering some form of one or both of Android Auto or Apple’s Apple CarPlay, it’s likely Toyota could not develop a connected dash to compete with the two heavily funded and frequently updated platforms, S&P theorizes.

August 6, 2019     

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