#536

Connected Car Forecast

CONTABLE OF CONTENTS
Introduction

Connected
CarSince the advent of the first in-vehicle telematics systems, the connected car market has seen exponential
year-on-year growth. This growth has been fueled by the increasing accessibility of these systems alongside
the growing number of new solutions offered by start-ups and suppliers offering new solutions - some of whichhave partnered with or received investments from legacy OEMs. At the same time, newer automakers aredeveloping vehicles built around connectivity systems and features - marketing them as USPs.

Executive Summary
Connectivity Trends
Feature Trends

As legacy OEMs continue to explore new connectivity opportunities while new players emerge and innovate,
the connected car market will only grow in complexity. Today, it relies on the correlation between technology
readiness, legal activity, OEM investment policies, and vehicle lifecycle management as well as the expectations
and acceptance of the consumer. For premium and mass-market OEMs wishing to grow their footprint in thisevolving market, maintaining this cohesion is crucial.

OEM Trends

Regional Trends
Next StepsIn the Connected Car Forecast report, a ten-year outlook is provided on the penetration of vehicle connectivity
and key connected features as well as the fitment rate of connected systems. Covering more than 90% of the
global connectivity market, it compares how these factors are expected to vary between different regions anddifferent types of connectivity and services.

RELATED SBD REPORTS
526 – Connected Services Guide
Although the opportunities to benefit fromconnectivity are rising, so are the risks associatedwith implementing the wrong strategy or fallingbehind competitors.
It's therefore important to ensure that you always
have the latest, most comprehensive, and mostaccurate information at hand. These reports are thereference guide to OEM connected car servicesofferings.

COVERAGE

FREQUENCY

PUBLICATION FORMAT

PAGES

1
NA

CHINA

EUROPEANNUALLYQUARTERLY

ONE-OFFPD F

POWERPOINT

EXCEL

ONLINE

100*

#536/Connected Car Forecast

Key questions answered> How will major OEM
groups deploy connectivity
in the next 10 years?

> What is the expected
evolution of specificconnected services?

This research supports

Do I have access?

> How will connectivity trendsvary per region?
PRODUCT PLANNERS

E NGI NE E R S

M A R K E T I NG

C- S UITE> What connectivity services
are offered in each region?

Portal access

Request a quote forConnected Car Forecast
Annual Report

2023

GLOBAL CONNECTED CAR FORECAST
GlobalContents

Introduction ≫4

OEM Trends ≫73

Executive Summary ≫8

Regional Trends ≫100

▪ China▪ Europe▪ USAConnectivity Trends ≫•Cellular Connectivity•Local Connectivity•Smartphone Connectivity•Screen Duplication

Feature Trends ≫20
Next Steps≫

109

Appendix ≫113

Contact Us ≫11828▪ Safety & Security▪ Maintenance & OTA▪ Navigation▪ Infotainment▪ Convenience & Remote Services▪ EV-SpecificTotal number of pages - 118

Introduction

Introduction

Chapter Introduction
SBD Automotive’s Connected Car Forecast report provides an outlook of the penetrationof vehicle connectivity type and key connected features by market up to 2033. This
forecast delivers guidance for industry stakeholders to help understand the level ofinfluence that barriers and enablers to connectivity are having.

SectionContent

ExecutiveSummary

Introduction to the forecast. Key highlights and conclusions fromthe report.

SBD Automotive commits to deliver a realistic forecast up to 2033. The assumptions
made in this forecast are based on influencers such as current and likely vehicle fitment
strategies adopted by OEMs, technology maturity and consumer acceptance of a pricepoint. The likeliness that consumers will expect or accept certain connected services aspart of a basic or optional fitment is also considered.

Connectivity
TrendsOverview and analysis of connectivity types and the penetration
rate trends across the forecasting window.

Technology and regulatory factors can lead to a change in feature penetration. This canbe positive (mandates) or negative (superseding technology).

Feature Trends

Analysis of feature trends identified in the forecast, including
expected trends, consumer expectations, and feature evolutions.

The market for connected car features relies on the correlation between technology
readiness, government mandates and regulations, OEMs’ investment policies, vehicle
lifecycle management and customers’ expectations and acceptance.

Markets covered• China

European countries considered:• USA•

Austria•

Hungary•

Romania• Europe•

Belgium•

Ireland•

Slovakia•

Bulgaria•

Italy

•

Slovenia•

Czech Republic•

Latvia•Spain•

Denmark•

Lithuania•

Sweden•Estonia•

Luxembourg•

Switzerland•

Finland•Netherlands•

United Kingdom•

France•Norway•Germany•

Poland•Greece•Portugal

OEM Trends

Regional Trends

Next Steps

Overview of each OEM’s connected service offering over theforecasting window.

Analysis of how key connectivity types and features will penetrate
the car parcs in key regions.

Can SBD help you with any unanswered questions?

66

Example slides
from the report

Executive SummaryConnectivity Takeaways
OverviewBelow are the four main types of connectivity analyzed in the forecast, and their penetration rate by region.
• From 42 million cars with modems in US, EU andChina in 2023, are expected to double to over 64
million by 2033.

• As cellular connectivity moves toward 100% by
2028-29, local connectivity steadily decreases
over the next 9 to 10 years.

100%

100%

80%

80%

60%

60%

CellularConnectivity

40%
20%

Local
Connectivity

0%

40%
20%
0%

2023

2025

2027

2029

2031

2033

2023

100%

100%

80%

80%

60%

60%

Smartphone
Connectivity

20%
0%2023

82025

2027

2029

2031

2027

2029

2031

2033

• 34m cars with screen duplication have shipped up
to October 2023 in the US, EU and China. This
figure will reach 50 million by 2033.

• The penetration of proprietary smartphone-based
solution is declining, and it can be attributed to fallin cellular connectivity cost and screen duplication

40%

2025

Smartphone
Duplication

2033

40%
20%
0%
2023

China

EU

2025

2027

2029

2031

2033

US8

Connectivity Trend

Definition

How do we define connectivity?

CellularConnectivity

LocalConnectivity

Smartphone
Connectivity

ScreenDuplication

System where all hardware,
software and firmware isshipped in a car from factory.
This means the cellular SIM
is inaccessible by the user.

When the OEMs provide thesoftware, hardware andfirmware from the factory
however, the connectivity isprovided by the user.

OEM provides a proprietary
smartphone app whichinterfaces with the head unit
to provide cloud content invehicle.

OEM uses in-vehicle
software to duplicate themobile device screen onto
their head unit. This allows
the users to control thedevice through the headunit.

99Connectivity Trend

Local connectivity

Local connectivity
Volume brands and regional differences
Some OEMs offer services supported by local connectivity, but overall penetration isdecreasing. Regional differences play a significant role in overall penetration rate. SBD
expects the penetration of local connectivity to decrease as cellular connectivity increases.

100%

Local Connectivity Penetration(%)

90%

80%
70%

Local connectivity is a low-cost option for volume brands looking to offer high bandwidth,
services and OTA updates for maps and software. Real-time updates are still supported by it.

60%
50%

Consumers expect frictionless digital experiences, which local connectivity cannot always
offer. Local connectivity cannot be relied upon for mission-critical services or safety-related
software updates.

40%
30%
20%

SBD Outlook

10%

SBD expects the trend of decreasing penetration to continue over the forecast period. The
percentage of local connectivity applications will decrease in favor of cellular equivalents.

0%2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
ChinaEUUSA

Drivers

Barriers•The key driver for local connectivity is lower cost compared to an cellularequivalent, particularly for volume brands.

•Cannot be relied upon as a means of connectivity due to consumer setup
challenges.

•The option is cost-effective for the user. It provides lower data download
costs compared with cellular solutions.

•Not suitable for mission-critical or safety related software updates.

•Local connectivity is suited to infrequent use cases such as over the air
updates for maps and software. Local connectivity is maintained in China
by some OEMs.

•Not a reliable way to harvest status or sensor data from the vehicle.

•Falling data costs makes the cost effectiveness argument weaker whencompared with the lack of connectivity certainty.

1010

Feature trends

Safety & Security

Safety & Security in 2023
Stolen Vehicle Tracking

Industry Signals

Stolen Vehicle Control•

Stolen vehicle control has the highest penetration in
the USA, at 32%. China and Europe are at 15% and3%.

•The major difference in feature penetration is
between premium and volume segments. The
biggest gap is in Europe where penetration is 7%
for volume brands and 29% for premium. The US
also has an unusual situation with lower penetrationof premium vehicles compared to volume.

•The penetration of stolen vehicle tracking varies
significantly depending on the region, ranging from
15% in China, to 52% and 71% for Europe and theUSA.

•The difference between segments is important.
Europe has the largest gap in feature penetration
between premium and volume vehicles at 52% and7% respectively. There is a similar difference inChina the overall adoption level is lower.

•Security alert and Parental Controls, like the othersecurity features, have a higher penetration in theUSA (60%) than in Europe (40%) or China (34%).

•The largest gap between premium and volume
segments with this feature penetration is in Europe(57% and 30%). In the USA, there is almost no
difference with penetration at 59% in volumevehicles and 61% in premium vehicles.

100%

100%

100%

80%

80%

80%

60%

60%

60%

40%

40%

40%

20%

20%

20%

0%0%
VolumeChina

SBD Outlook

Security Alert and Parental Controls••EuropePremiumUSA

While still a niche feature, stolen vehicle control willgrow consistently, helped by overall infrastructuredevelopment. China due to significantly lower cartheft events is expected to maintain a loweradoption rate.
The difference in penetration between premium andvolume segments is likely to remain consistent. Thedifferent approach's taken by many OEMs in Europe,and the additional costs support this trend.

0%VolumeChinaEuropePremium
USA•

Adoption is expected to remain low in China wherecar theft is rare compared to other countries due toCCTV presence and general control.

•The clear difference in penetration rate between
volume and premium segments is expected toremain for longer, particularly in Europe where thegap is clearer.

VolumeChinaEuropePremium
USA•

Most OEMs featuring the service will reach 100%
adoption rate in the near term.

•A part of the volume brands in China and Europe
will not adopt the feature over the next 10 years
leaving it as a more exclusive feature for premium
vehicles.

1111

Feature trends

Navigation

Navigation – Last Mile Guidance
Last Mile Guidance•

The feature is expected to gradually develop into a hygiene feature due to common use on
digital devices and screen duplication options.

•Last mile navigation has a high penetration rate already in the US and Europe mostly due toscreen duplication options, while the overall penetration is significantly lower in China where thepreferred mode is cellular connectivity, as screen duplication solutions use AutoNavi, Baidu Map,
Tencent Map and Sougou Map but various services provided via CarPlay and Android Auto are
not available.

SBD Outlook••Last mile guidance preferred connectivity is screen duplication, but embedded services
complementing connected sharing services are expected to increase.

OEMs developing an ecosystem will look to feature first and last mile guidance via proprietaryapps to enrich their offering and FaaS potential with the addition of augmented reality, multimodal journey planning solutions.

Toll-Payment

100%
80%
60%
40%
20%
0%

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

USA

91%

94%

95%

95%

95%

94%

94%

94%

94%

94%

94%

EU

82%

94%

97%

99%

99%

99%

99%

99%

99%

99%

99%

China

27%

35%

41%

45%

48%

51%

54%

56%

58%

61%

62%

100%

•Toll payment has currently a very low penetration rate in all three regions. It is not a service thatis expected by customers to be featured as standard as 3rd party solutions are already extremelycommon.

80%•Some OEMs are launching the feature in the US, and in China the high number of toll booths islikely to encourage the feature’s diffusion. On the other hand, what might hinder its diffusion in
Europe is the market fragmentation.

40%

SBD Outlook••

12

Initial signals indicate that over the forecast period some degree of diffusion could appear inEurope and the US.
Toll Payment is only supported through cellular connectivity and SBD expects it to remain so.

60%

20%
0%

2023

202420252026

2027

2028

2029

2030

2031

2032

2033

USA

1%

1%

1%

2%2%

2%

2%

3%

3%

3%

4%

EU

0%

0%

0%0%0%0%0%0%

0%0%

0%

China

0%

0%

0%

2%

3%

5%

7%

9%

11%

12%

14%
12

Feature trends

Convenience

Convenience – Wi-Fi Hotspot and Vehicle Locator
Wi-Fi Hotspot•

The Wi-Fi Hotspot is not considered an essential feature as the convenience of smartphones withcheap data plans are usually favored. The feature has already a good penetration in the US andChina, beyond 50% and lower in Europe.

•SBD does not expect 5G introduction to significantly impact the user experience but potentially
the OEMs’ marketing strategy which one of the reasons the feature penetration will likely
continue growing.

SBD Outlook•

The feature is supported through cellular connectivity, and it is expected to remain so.

Vehicle Locator•

A hygiene feature expected by users to be available and made initially popular by Google maps
with the “my parking” function to save the car location.

SBD Outlook•

Addition to this function that are available and likely to become more popular in coming years
are the ability to share location.

•The feature is supported almost exclusively by cellular connectivity and is expected to remain so.

100%
80%
60%
40%
20%
0%

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

USA

65%

71%

75%

77%

79%

80%

81%

83%

85%

86%

86%

EU

32%

41%

47%

51%

54%

57%

59%

60%

62%

62%

62%

China

70%

80%

81%

83%

84%

85%

85%

86%

87%

87%

87%

100%
80%
60%
40%
20%
0%

13

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

USA

77%

85%

89%

91%

93%

94%

94%

94%

95%

95%

95%

EU

68%

76%

80%

82%84%

86%

88%

89%

90%

90%

91%

China

79%

88%90%92%

92%

93%

93%

94%

95%

95%

95%
13

What the Excel
Version Contains

Excel Database Includes

Excel Data Points:

75,000+#536/Connected Car Forecast

Global OEMs Covered:

Excel Tabs:

80+

4

Excel Database Includes

Excel Data Points:

75,000+#536/Connected Car Forecast

Global OEMs Covered:

Excel Tabs:

80+

4

Excel Database Includes

Excel Data Points:

75,000+#536/Connected Car Forecast

Global OEMs Covered:

Excel Tabs:

80+

4

Request the priceContact Us

Contact SBD Automotive

Do you have any questions?
If you have any questions or feedback about thisresearch report or SBD Automotive’s consulting services,
you can email us at info@sbdautomotive.com or discusswith your local account manager below.

info@sbdautomotive.com

Book a meeting

USA

Garren Carr
North America
garrencarr@sbdautomotive.com+1 734 619 7969

19UK

Germany

Luigi Bisbiglia
UK, South & West Europe
luigibisbiglia@sbdautomotive.com+44 1908 305102

Andrea Sroczynski
Germany, North & East Europe
andreasroczynski@sbdautomotive.com+49 211 9753153-1

IndiaChinaJapanSBD China Sales TeamChina
salesChina@sbdautomotive.com+86 18516653761

SBD Japan Sales TeamJapan, South Korea & Australia
postbox@sbdautomotive.com+81 52 253 6201
19