The Internet of Things (IoT) had a nice run of turning on lights and playing people’s favorite songs. Now it is transforming global industries, and the automotive sector is no exception with connected cars quickly becoming the norm.
The IoT describes the network of physical devices connected via the internet. It consists of billions of devices globally, including many that fall into the automotive category. Connected cars date back to the mid-1960s, beginning with General Motors Driver Aid, Information and Routing (DAIR). Manufacturers started embedding technology into vehicles in the mid-1990s, followed by vehicle advancements throughout the first two decades of the 21st century.
Automakers continue to push the envelope as part of their efforts to enhance the driving experience. Other automotive industry companies are doing the same, to the point where car IoT revenues are increasing rapidly. Research indicates the automotive IoT market could reach $82.8 billion in revenue in 2022. This is due primarily to the benefits of using internet-connected technologies across a wide range of automotive applications. That kind of backing indicates that this space may prove to be a viable investment opportunity for years to come.
This guide will examine the link between cars and IoT. It will look at the past, present, and future of connected vehicles, along with why investors are increasingly flocking to automotive IoT opportunities.
What Are the Benefits of Automotive IoT?
Connected car solutions benefit consumers and businesses alike. Key reasons why the automotive IoT market is expected to grow include:
1. Enhanced Travel Safety
Carmakers can build internet-connected technologies to make the roads safer for drivers and pedestrians. The IoT empowers a vehicle to collect and analyze real-time information from various sources, so a driver can change their route, avoid traffic jams, and lower their risk of accidents. Manufacturers can also equip connected cars with sensors to help drivers control their vehicles and avoid road hazards.
2. Improved Efficiency
Having internet connectivity in a vehicle provides a driver with information that can optimize fuel efficiency and cut down on travel time. Internet-connected technologies can also provide fleet managers with insights they can use to streamline their fleet’s performance.
3. Cost and Time Savings
Connected technology can help drivers stay up to date about traffic jams and other road issues that otherwise can cause their fuel costs and travel time to escalate. Carmakers can also incorporate connected technology into cars to provide drivers with preventative maintenance updates. This ensures drivers can maintain their vehicles before issues crop up that lead to costly, time-intensive repairs.
4. Increased Accessibility
Smart cars may ultimately provide more travel options to people coping with disabilities. The development of autonomous (self-driving) cars, for instance, may help people dealing with disabilities drive on their own.
5. Less Air Pollution
Carmakers are building connected cars that run on electricity instead of or in addition to gasoline, and they can help drivers cut down on vehicle emissions. Self-driving cars might lead more people to carpool if they become widely available. This can further reduce the amount of automotive air pollution.
Connected-car technologies show tremendous promise, with more innovations coming by the day. But the technologies remain a work in progress, with several issues that still need to be resolved before they are universally accepted and accessible.
What Are the Risks of Automotive IoT?
Questions persist about connected technologies in vehicles regarding safety and other issues. Critics have raised concerns about many areas surrounding connected vehicles, including:
1. Data Security
Connected vehicles can collect driver information over an extended period, so data that inadvertently falls into the hands of a cybercriminal could cause myriad problems. A connected car can even be subject to a cyberattack; in this instance, a hacker could gain control over the vehicle and put the driver and others in danger.
2. Internet Connectivity
Not all internet connections are created equal, and there is no standardized internet connectivity solution for all smart vehicles. This means some vehicles may support 5G connectivity, while others may use Wi-Fi. The lack of standardization could make it challenging for sensors and other connected components in vehicles to communicate with one another.
Self-driving cars can boost safety since they eliminate the risk of human error behind the wheel. They can also create safety concerns, as the vehicles take control away from drivers.
Companies across the auto sector are investing heavily in the research and development of IoT technologies. They perform comprehensive testing before releasing any of these technologies, and they apply regular updates to ensure the vehicles are performing at peak levels.
Automotive IoT Use Cases
Carmakers are using IoT technologies to solve several problems across the sector. The number of automotive IoT use cases is seemingly endless, since any device can be connected to the internet. A few that have gained attention recently include:
1. Fleet Management
Carmakers can embed sensors into truck fleets for tracking cargo weight and volume, vehicle performance statistics, and road traffic conditions. They also allow fleet managers to determine the real-time location of vehicles and monitor the time it takes drivers to get from point A to point B. Managers can use sensors to gain insights and uncover ways to optimize their fleet’s performance.
2. Connected Cars
Connected cars can do more than share information with drivers. These vehicles can leverage internet-connected technologies to share information and connect to various networks. This ensures “smart” cars can provide drivers with details about traffic and road conditions, minimize the risk of pedestrian accidents, and help them enjoy safe and efficient travel experiences.
3. Automotive Maintenance
No one wants to have their car break down while traveling. Automakers can use connected technologies to promote proactive automotive maintenance. Any time the technology detects issues that could hamper a vehicle’s performance, it can notify the driver accordingly.
4. Autonomous Vehicles
Semi-autonomous vehicles are already helping drivers drive, park, brake, and perform other vehicle functions. Automakers’ work on autonomous vehicle technology has shown great promise in producing autos that can safely drive themselves.
5. In-Vehicle Infotainment
Although drivers often relied on their car’s radio to keep them entertained in the past, the IoT is bringing about a new era of in-vehicle infotainment. Voice-enabled apps such as Pandora and Spotify let drivers use voice commands to activate a smart and connected device’s playlist, so they can start listening to music hands-free. Software developers are creating cloud-integrated apps that will provide drivers with direct access to audio platforms, navigation, and other infotainment options.
Imagine what it would be like if emergency responders could be instantly alerted if a vehicle is involved in an accident, even if the victims cannot call 911. Real-time telematics can make it easy for cars to do just that. They can provide emergency responders and other authorized third parties with remote access to vehicle operation information.
7. Car Engineering and Production
Automakers can use IoT technologies to learn more about driver behaviors and preferences. They can then apply these insights to the engineering and production of their vehicles. The result: Carmakers can produce cars that match consumers’ expectations.
These applications only scratch the surface of IoT in the automotive sector. This is a rapidly developing space that is determined to reveal some impressive innovations in the foreseeable future.
3 Tips to Evaluate Automotive IoT Investment Opportunities
Investing in any type of technology can be risky. The auto IoT space, however, will reward those with the knowledge and skills to sort out the ordinary and uncover genuine opportunities.
Automotive technology investments can present high-risk and high-reward opportunities. Here are three tips to help you assess the potential risks and rewards of auto IoT investments.
1. Conduct Industry Research
Review automotive IoT research from Gartner, IDC, and other market intelligence firms. Since the market for connected cars is evolving, new research is released regularly. Investors who stay up to date can gain insights into market patterns and trends.
2. Learn About the Auto IoT Market’s Key Segments
Key segments of the auto IoT market include geography, connectivity form factor (such as tethered, integrated, and embedded), and components (including hardware, software, and services). Track data across connected-car market segments over time to identify investment opportunities across these segments.
3. Partner With an Auto IoT Investment Specialist
An automotive IoT investment specialist can offer insights that may be difficult to obtain elsewhere. Specialists often have technology experts on staff who can explain the ins and outs of auto IoT investments and respond to any concerns or questions.
The future looks promising for auto IoT technologies. Those who explore investments in this sector today may reap the benefits of their investment decisions for years to come.
Connected technology investments extend beyond the automotive sector. People may want to consider cybersecurity investing opportunities in conjunction with those in the auto IoT segment.
Learn More About Automotive IoT and Cybersecurity Investing Opportunities
It takes a skilled team to identify the most promising auto IoT investments, including those in the cybersecurity sector. Option3Ventures has developed a group with extensive experience in the national security space and the investment world, with a dual focus on finding high-performing companies that make our country safer.
Our portfolio is delivering solid returns for a long list of conscientious investors. Contact us today for more information or tips about cybersecurity investing.