The total market for connected living services is estimated to grow from $8 billion in 2023 to more than $1.5 trillion by 2035 at the CAGR of 54.5%.
The market for vehicles as a linked living ecosystem is expanding due to factors like customer perceptions and service expectations, technological advancements, and enhanced connection levels across automakers. Customers anticipate a variety of connected features, including increased safety, remote vehicle functions, security, car-home connectivity, and EV & energy management services. This is especially true for Gen Z customers and customers who are willing to pay more for sophisticated connectivity. In an effort to generate new revenue streams, nearly all OEMs, including Mercedes Benz, BMW, Stellantis, VW, and others, are concentrating heavily on the connected car market.
“The new smartphone is the automobile.”
Connected automobiles are now more than just data-generating devices for fleet management and safety regulations. The capacity of connected cars to generate steady money throughout the course of a person’s lifetime has made them the golden goose for automakers. The cars can do nearly anything that our smartphones can do now, and even more, providing complete linked lifestyle solutions at the push of a button. The vehicles have the ability to remotely unlock, drive and navigate themselves, protect themselves from potential dangers and security threats, control energy consumption, provide in-car marketplaces with integrated payment systems, amuse passengers, look after their homes and health, manage work diaries and civic duties, and blend the real and virtual worlds.
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“The market for digital connected living services is anticipated to be dominated by the in-car connectivity segment.”
By 2035, it is anticipated that clients would be able to get these services for $1,600 per year. The in-car experience is predicted to generate the majority of revenue (87%) over the next ten years, with health, energy, and aftermarket emerging as strong categories. OEMs must determine their connection and subscription income plan. Finding the ideal balance between subscription fees and customer willingness to pay is the main obstacle, though.
“There is more room for growth in the larger connected car ecosystem.”
Developing capabilities in the broader automotive ecosystem, such as energy management services and connected insurance, would benefit OEMs even more. In addition to selling electric vehicles, Tesla, Hyundai, GM, and Ford also offer the full range of services needed for energy independence, including energy storage, renewable energy production, and V2G technology. To provide linked insurance services that are underwritten by insurance firms, Tesla, GM, and JLR are utilizing data from connected vehicles. Data monetization collaborations with different stakeholders, including cities, auto shops, and others, constitute a third source of income. A single connected car could lead to multiple more cash streams.
Managing energy services, insurance, and healthcare through the car’s ecosystem, as well as communicating with drivers and providing AR-based driver assistance, autonomous driving, and automatically managed maintenance systems. VR repair and maintenance, V2X technologies, and 6G connection will transform how buyers interact with the vehicle.
Key Players
Major players in the Car as a Connected Living include Mercedez Benz (Germany), BMW (Germany), VW (Germany), Stellantis (Netherlands), Hyundai (South Korea), Toyota (Japan), GM (USA), Ford (USA), Nio (China), Xpeng (China). All OEMs offer vary levels of connectivity solutions through the car.
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