I spent last week at the Telematics Update conference in Detroit learning more about what’s going on in the telematics industry and what is likely to change in the coming years. During this event, I moderated a panel entitled “Telematics: A Must Have for EVs.”
First, my impression from the conference in general is that there is a seismic change occurring in the telematics industry, but we’re on the cusp of it (as opposed to in the midst). The most interesting comparison I saw was the difference between the cellular industry pre-iPhone and the post-iPhone. Before the iPhone, the apps that were available were limited to those sold by handset manufacturers or software suppliers and were designed to sell the equipment and service (many designed to sell multiple devices like the Palm Pilot, handheld GPS units and cell phones). Post-iPhone, the equipment is almost secondary to the apps and the services that are sold. Apple may be a hardware manufacturer, but they make a lot of their money in the iTunes store and use that to drive hardware sales. Many think this is how telematics will go and, based on the companies with displays at the conference, I tend to think they are right.
There are a lot of companies that are working on the machine-to-machine (M2M) communication network business model. Many of these offer vehicle OEMs ways to access and manage multiple wireless networks without having to go into negotiations with multiple carriers. In fact, I would venture to guess that there are too many in this segment to be sustainable. This industry looks ripe for consolidation as it grows. I found that trying to clearly understand what the differences are between networks became a challenge as the day went on. In fact, the biggest differences right now seems to be the partnerships (this is starting to sound a bit like the EV battery industry a year or two ago). Those with strong OEM partnerships and strong wireless network partners (Verizon, AT&T, Sprint, Vodafone, et cetera) seem most likely to survive the hump.
This brings me to the panel I moderated. The panel included representatives from Sprint, Airbiquity, Nissan and Toyota. It was very interesting to get the perspective of the service suppliers as well as the OEMs on the future of telematics. And perhaps more interestingly was the amount of agreement there was between all parties on the panel. While EV telematics is still early in its development stage, the panel came to a consensus (of sorts) on several key points:
- Distinguishing features of EV telematics haven’t yet been defined. Aside from charging point locations and battery charge related items, telematics of EVs will be pretty similar to what ICE and hybrid vehicle drivers will experience (though I expect this will change rapidly in the coming years).
- The EV telematics experience won’t be much different for fleets and consumers (in passenger cars).
- Everyone wants to own their customer data - all of it. OEMs will not likely give up their customer EV data and want to bring in other data to get the total picture. We have heard the same from utilities and even charging equipment suppliers in the past. Data integration remains a key issue to be worked out.
- The privacy issues surrounding consumer EV data and data integration are a huge issue in telematics. OEMs and service suppliers are very tuned in to this.
- Telematics are not a premium feature justifying the higher upfront cost of EVs, because the lifetime cost of EVs will be lower than that of ICE vehicles.
In the end, the title was definitely apropos as everyone agreed that the telematics are a “cost of entry” into the EV market. The ability to locate EVSE and track aspects of battery charge is mission critical for vehicle owners. Also, everyone seems to agree that the future of EV telematics will likely reside in cloud computing, with “the cloud” offering greater opportunities for integrating data from multiple sources and helping to customize the driving experience for the driver. Beyond that, specific features and how revenue will be generated from telematics data remains up in the air.
Photo by Major Nelson/flickr/Creative Commons
As an analyst for Pike Research, Dave Hurst studies emerging markets in electric transportation.