Connected car

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A connected car is a car that is equipped with Internet access, and usually also with a wireless local area network.[1][2] This allows the car to share internet access with other devices both inside as well as outside the vehicle[3]. Often, the car is also outfitted with special technologies that tap into the internet or wireless LAN and provide additional benefits to the driver. For safety-critical applications, it is anticipated that cars will also be connected using Dedicated Short Range Communication (DSRC) radios, operating in the FCC-granted 5.9GHz band with very low latency.

History of connected cars, 1996–present[edit]

General Motors was the first automaker to bring the first connected car features to market with OnStar in 1996 in Cadillac DeVille, Seville and Eldorado. OnStar was created by GM working with Motorola Automotive (that was later bought by Continental). The primary purpose was safety and to get emergency help to a vehicle when there was an accident. The sooner medical helps arrives the more likely the drivers and passengers would survive. A cellular telephone call would be routed to a call center where the agent sent help.[4]

At first, OnStar only worked with voice but when cellular systems added data the system was able to send the GPS location to the call center. After the success of OnStar, many automakers followed with similar safety programs that usually come with a free trial for a new car and then a paid subscription after the trial is over.

Remote diagnostics were introduced in 2001. By 2003 connected car services included vehicle health reports, turn-by-turn directions and a network access device. Data-only telematics were first offered in 2007.

In the summer of 2014, Audi was the first automaker to offer 4G LTE Wi-Fi Hotspots access and the first mass deployment of 4G LTE was by General Motors.

By 2015, OnStar had processed 1 billion requests from customers.[5]

In the UK, the breakdown association 'The AA' introduced the first piece of connected car technology, in Car Genie that connects directly to a breakdown service, not only warning of issues with car health, but intervening directly with a phone call to customers to help them prevent a breakdown.<>

Categories of applications[edit]

Applications can be separated into two categories: 1.) single vehicle applications: In-car content and service applications implemented by a single vehicle in connection with a cloud or backoffice. 2.) cooperative safety and efficiency applications: they provide connectivity between vehicles (or infrastructure) directly have to work cross-brand and cross-borders and require standards and regulation. Some may be convenience applications, others safety, which may require regulation.

Examples include, amongst others: 1.) single-vehicle applications: concierge features provided by automakers or apps alert the driver of the time to leave to arrive on time from a calendar and send text message alerts to friends or business associates to alert them of arrival times such as BMW Connected NA that also helps find parking or gas stations.[6] The European eCall would be an example of a single vehicle safety application that is mandatory in the EU.[7]

2.) cooperative safety-of-life and cooperative efficiency: forward collision warning, lane change warning/blind spot warning, emergency brake light warning, intersection movement assist, emergency vehicle approaching, road works warning, automatic notification of crashes, notification of speeding and safety alerts.[8][9]

The connected cars segment can be further classified into 6 different categories.[10]

  • Mobility management: functions that allow the driver to reach a destination quickly, safely, and in a cost-efficient manner (e.g.: Current traffic information, Parking lot or garage assistance, Optimised fuel consumption)
  • Vehicle management: functions that aid the driver in reducing operating costs and improving ease of use (e.g.: Vehicle condition and service reminders, Remote operation, Transfer of usage data)
  • Breakdown prevention: connected to a breakdown service, with a back end algorithm predicting breakdowns and an outbound service intervening via phone, SMS or push notification
  • Safety: functions that warn the driver of external hazards and internal responses of the vehicle to hazards (e.g.: Vehicle condition and service reminders, Remote operation, Transfer of usage data)
  • Entertainment: functions involving the entertainment of the driver and passengers (e.g.: Smartphone interface, WLAN hot spot, Music, video, Internet, social media, Mobile office)
  • Driver assistance: functions involving partially or fully automatic driving (e.g.: Operational assistance or autopilot in heavy traffic, in parking, or on highways)
  • Well being: functions involving the driver’s comfort and ability and fitness to drive (e.g.: Fatigue detection, Automatic environment adjustments to keep drivers alert, Medical assistance)

Single-vehicle applications[edit]

Current automobiles entail embedded navigation systems, smartphone integration and multimedia packages.[11] Typically, a connected car made after 2010 has a head-unit, in car entertainment unit, in-dash system with a screen from which the operations of the connections can be seen or managed by the driver. Types of functions that can be made include music/audio playing, smartphone apps, navigation, roadside assistance, voice commands, contextual help/offers, parking apps, engine controls and car diagnosis.[4]

On January 6, 2014, Google announced the formation of the Open Automotive Alliance (OAA) a global alliance of technology and auto industry leaders committed to bringing the Android platform to cars starting in 2014. The OAA includes Audi, GM, Google, Honda, Hyundai and Nvidia.[12]

On March 3, 2014, Apple announced a new system to connect iPhone 5/5c/5S to car infotainment units using iOS 7 to cars via a Lightning connector, called CarPlay.

Android Auto was announced on June 25, 2014 to provide a way for Android smartphones to connect to car infotainment systems.

Increasingly, Connected Cars (and especially electric cars) are taking advantage of the rise of smartphones, and apps are available to interact with the car from any distance. Users can unlock their cars, check the status of batteries on electric cars, find the location of the car, or remotely activate the climate control system.

Innovations to be introduced until 2020 include the full integration of smartphone applications, such as the linkage of the smartphone calendar, displaying it on the car's windshield and automatic address searches in the navigation system for calendar entries.[11] In the longer term, navigation systems will be integrated in the windshield and through augmented reality project digital information, like alerts and traffic information, onto real images from the driver's perspective.[11]

Near-term innovations regarding Vehicle Relationship Management (VRM) entail advanced remote services, such as GPS tracking and personalized usage restrictions. Further, maintenance services like over-the-air tune-ups, requiring the collaboration of car dealers, OEMs and service centers, are under development.[11]

Despite various market drivers there are also barriers that have prevented the ultimate breakthrough of the connected car in the past few years. One of these is the fact that customers are reluctant to pay the extra costs associated with embedded connectivity and instead use their smartphones as solution for their in-car connectivity needs. Because this barrier is likely to continue, at least in the short-term, car manufacturers are turning to smartphone integration in an effort to satisfy consumer demand for connectivity.[13]

Cooperative safety-of-life and efficiency[edit]

These services relate to Advanced Driver-Assistance Systems (ADAS), that depend on the sensory input of more than one vehicle and enable instant reaction through automatic monitoring, alerting, braking and steering activities.[14] They depend on instant vehicle-to-vehicle communication, as well as infrastructure, functioning across brands and national borders and offering cross-brand and cross-border levels of privacy and security. The US National Highway Traffic Safety Administration (NHTSA) for that reason has argued for regulation in its Advance Notice of Proposed Rulemaking (ANPRM) on V2V Communication[15] and argued the case in US Congress.[16] NHTSA began the rule-making process on December 13, 2016, proposing to mandate dedicated short-range communications (DSRC) technology in new light vehicles.[1] Under this proposed rule, vehicles would broadcast a defined data packet, the "basic safety message" (BSM) up to ten times per second, indicating vehicle location, heading, and speed. In March, 2017, GM became the first US automaker to provide DSRC as standard equipment on a production automobile, the Cadillac CTS.[17] The US also has appropriate standards – IEEE 802.11p - and frequency rules[18] in place. In Europe a frequency is harmonised for transport safety[19] and a harmonised standard, called ETSI ITS-G5,[20] are in place. In the EU there is no push to oblige vehicle manufacturers to introduce connect. Discussions about a regulatory framework for privacy and security are ongoing.[21]

Technologically speaking cooperative applications can be implemented.[22] Here the regulatory framework is the main obstacle to implementation, questions like privacy and security need to be addressed. British weekly "The Economist" even argues that the matter is regulatory driven.[23]


The necessary hardware can be divided into built-in or brought-in connection systems. The built-in telematics boxes most commonly have a proprietary internet connection via a GSM module and are integrated in the car IT system. Although most connected cars in the United States use the GSM operator AT&T with a GSM SIM such as the case with Volvo,[24] some cars such as the Hyundai Blue Link system utilizes Verizon Wireless Enterprise, a non-GSM CDMA operator.[25]

Most brought-in devices are plugged in the OBD (On-board diagnostics) port for electrification and access to vehicle data and can further be divided into two types of connection:

  • Hardware relies on customers smartphone for the internet connection or
  • Hardware establishes proprietary internet connection via GSM module.

All forms of hardware have typical use cases as drivers. The built-in solutions were mostly driven by safety regulations in Europe for an automated Emergency Call (abbr. eCall). The brought-in devices usually focus on one customer segment and one specific use case.[26]


The data provided by greater vehicle connectivity is impacting the car insurance industry.[11] Predictive-modeling and machine-learning technologies, as well as real-time data streaming, providing among others information on driving speed, routes and time, are changing insurers' doing-of-business.[11][27] Early adopters have begun to adjust their offering to the developments in the automotive industry, leading them to transition from being pure insurance product provider to becoming insurance-service hybrids.[27]

Progressive, for example, has introduced its usage-based-insurance program, Snapshot, in 2008, which takes into account driving times and ability. The data gathered through an onboard diagnostics device allows the company to perform further personal and regional risk assessments.[27] Another innovation being tested in the insurance industry regards telematics devices, which transmit vehicle and driver data through wide-area networks and are subsequently used to influence driving behavior, for legal purposes and the identification of fraudulent insurance claims. Further applications are dynamic risk profiles and improved customer segmentation.[27] Future services include coaching on driving skills for fuel efficiency and safety reasons, the prediction of maintenance needs and providing advise to car owners regarding the best time to sell their car.[27]


The following trends are strengthening the shift towards a fully developed connected cars industry, changing the concept of what is understood as a car and what are its functions.

Technological innovation in the field of connectivity is accelerating.[28] High-speed computers help make the car aware of its surroundings, which can transform manoeuvring a self-driving vehicle an increasing reality.[29]

Further there are initiatives to use the ethernet technology to connect the sensors that allow for advanced driving assistance systems (ADAS). Through the ethernet network speed inside the vehicle can move from one megabit to gigabits [30]. Further, It uses switches that allow connections to any number of devices, reducing the amount of cabling required and thus the overall weight of the car. Moreover, it is more scalable, allowing devices and sensors to connect at different speeds and has the benefit of components being available off the shelf [31].

In fact, research also shows that customers are willing to switch manufacturers just to be able to use mobile devices and connectivity. In 2014 there were 21% who were willing to do so whereas in 2015 this number climbed up to 37%. On top of that 32% of those customers would also be ready to pay for a service related to connectivity on top on a base model. This figure has been at 21% in 2014, one year before. The increase of customers willing to switch manufacturers and to pay for such services shows the increase in importance for connected cars. [32]


Drawbacks and Challenges[edit]

Although the connected car offers lots of benefits and excitement to the drivers, it also faces drawbacks and challenges;

  • A major issue with the connected cars is hackability. The more it is connected to the internet and to the system, it becomes more exposed to being penetrated from the outside. If the service and help can be provided from distance by car-makers, through that channel, hackers can access and control the car as well. In Germany and Brazil, 59% of car drivers are afraid to be hacked into their car if it is connected to the Internet. In the U.S there are 43% and in China 53% whereas the average lies at 54%. [33]
  • Reliability is also a major concern. Cars, sensor, and network hardware will malfunction. The system has to deal with incorrect data, as well as faulty communications, such as denial of service attacks.
  • Privacy is another dimension, both with hacking and with other uses. Sensitive data gathered from the car such as the location, driver's daily route, apps that are used, etc... are all susceptible to be hacked and used for unauthorised purposes.[34], as well as being used by businesses and government. In Germany for example 51% of car drivers do not want to use car-related connected services because they want to keep their privacy. In the U.S it is 45%, in Brazil 37% and in China 21% of the car drivers that think so. The average lies at 37%. [33]
  • A simple failure in the system, whether in the connected car, or elsewhere in the network, while on the autonomous drive can cause fatal consequences.

Fighting the challenges[edit]

  • Changing the design of products: the way that the product is developed and the "maintenance-respond-architecture" play a crucial role. Companies have to focus on long term solutions in terms of design security because quick changes are costly and easy to circumvent. Integrating this sphere at the earliest stage possible when developing the product can be the right approach for the companies.
  • Internal cooperation between departments of the company: product-security teams and corporate IT-security teams will have to work closely together in order to prevent the hackability of their devices. To do so, companies may create guidelines that minimize probabilities of bugs, and security gaps (software). Making modifying and patching systems easier can be another effect driven from that.
  • Over-the-air updates: As short term solutions are also easy to solve problems a technology called OTA (over-the-air) becomes more and more important to OEMs. These OTA updates allow companies to quickly detect problems/attacks and prevent the malefactors to become active and attack the system. However, this is a very costly approach and companies have to know the architecture of their systems in detail to directly attack the issue not to lose money on inefficiency.
  • Value chain security: As companies are the final integrators of security systems they also have to control security all along the value chain. Also suppliers have to make sure that security plays the most important role for the mobile device. Taking the example of the procurement department, it has to make sure that the cybersecurity features of the final product are negotiated and available. The whole security issue starts at the beginning of the value chain. This approach can be used to actually define and shape future security standards in the industry and make sure that every player in the industry has the same understanding of the importance of security. [35]

See also[edit]


  1. ^ Elliott, Amy-Mae (25 February 2011). "The Future of the Connected Car". Mashable. Retrieved 22 July 2014. 
  2. ^ EOS magazine, september 2010
  3. ^ Meola, Andrew. "Automotive Industry Trends: IoT Connected Smart Cars & Vehicles". UK Business Insider. UK Business Insider. Retrieved 9 November 2017. 
  4. ^ a b "Definition of Connected Car – What is the connected car? Defined". AUTO Connected Car. South Pasadena, California, United States: Aproprose. Retrieved 22 July 2014. 
  5. ^
  6. ^ "BMW Connected NA available for iPhone / Apple Watch – calculates departure time, texts friends & finds gas/parking". 31 March 2016. 
  7. ^ EU eCall (
  8. ^ "How will connected vehicles affect us". 
  9. ^
  10. ^ PwC Strategy& 2014. " In the fast lane. The bright future of connected cars".
  11. ^ a b c d e f McKinsey & Company (September 2014). "Connected car, automotive value chain unbound" (PDF). Retrieved 20 April 2017. 
  12. ^ "Open Automotive Alliance". Open Automotive Alliance. Retrieved 22 July 2014. 
  13. ^ "everis Connected Car Report" (PDF). everis. Retrieved 7 May 2015. 
  14. ^ Choi, Seunghyuk; Thalmayr, Florian; Wee, Dominik; Weig, Florian (February 2016). "Advanced driver-assistance systems: Challenges and opportunities ahead". McKinsey & Company. Retrieved 20 April 2017. 
  15. ^ Federal Motor Vehicle Safety Standards: Vehicle-to-Vehicle (V2V) Communications, Docket No. NHTSA–2014–0022 (
  16. ^ Hearing in US Congress (
  17. ^ "V2V Safety Technology Now Standard on Cadillac CTS Sedans". Retrieved 2017-08-01. 
  18. ^ Federal Communication Commission -Amendment of Parts 2 and 90 of the Commission's Rules to Allocate the 5.850-5.925 GHz Band to the Mobile Service for Dedicated Short Range Communications of Intelligent Transportation Services ET Docket No. 98-95 (
  19. ^ Commission Decision 2008/671/EC „on the harmonised use of radio spectrum in the 5 875-5 905 MHz frequency band for safety-related applications of Intelligent Transport Systems (ITS)“ (
  20. ^ First version ETSI EN 302 571: Intelligent Transport Systems (ITS); Radiocommunications equipment operating in the 5 855 MHz to 5 925 MHz frequency band; Harmonized EN covering the essential requirements of article 3.2 of the R&TTE Directive (
  21. ^ C-ITS Deployment Platform – Final Report, January 2016 (
  22. ^ NHTSA: Vehicle-to-Vehicle Communications: Readiness of V2V Technology for Application (
  23. ^ "Uberworld". Economist. 3 September 2016. 
  24. ^ "Volvo Cars and AT&T Enter Multi-Year Agreement to Connect Future Models in U.S. and Canada" (Press release). AT&T Corporation. 16 April 2014. 
  25. ^ Walford, Lynn (21 January 2014). "Hyundai Blue Link Goes Red (Verizon Wireless) Using Google Glass, Pandora or SoundHound". AUTO Connected Car. Aproprose. Retrieved 22 July 2014. 
  26. ^ "Connected Car Business Models – State of the Art and Practical Opportunities". AutoScout24. Munich, Germany: Scout24. Retrieved 22 July 2014. 
  27. ^ a b c d e Löffler, Markus; Mokwa, Christopher; Münstermann, Björn; Wojciak, Johannes (May 2016). "Shifting gears: Insurers adjust for connected-car ecosystems". McKinsey & Company. Retrieved 20 April 2017. 
  28. ^ "What's driving the connecter car?". McKinsey. 
  29. ^ "Obstacles for Connecter Cars". Forbes. 
  30. ^ Alam, Mahbubul. "The Top Five Trends For The Connected Car In 2016". TechCrunch. Retrieved 2017-11-08. 
  31. ^ Hall-Geisler, Kristen. "From your dorm room to your car: ethernet is back". TechCrunch. Retrieved 2017-11-08. 
  32. ^ "How carmakers can compete for the connected consumer". McKinsey & Company. Retrieved 2017-11-09. 
  33. ^ a b "What's driving the connected car". McKinsey & Company. Retrieved 2017-11-09. 
  34. ^,news-20424.html
  35. ^ "Shifting gears in cybersecurity for connected cars". McKinsey & Company. Retrieved 2017-11-09. 

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