Road to revolution:
from connected cars to new mobility

After a century of gradual upgrades, technology and the arrival of new players are changing the face of the automotive industry.


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Road to revolution:
from connected cars to new mobility


The car industry is over 100 years old, but until recently it hasn’t changed much. Today’s car is essentially a faster, sleeker Model T with some cool electronics.

But now, a revolution is under way. It’s less than seven years since Google unveiled its small and quirky-looking fleet of self-driving cars to the world. And just seven years since a team led by ex-DARPA technicians achieved practical, if not commercial, viability for a science-fiction idea most had assumed was decades away.

Today, Waymo – the new name for the Google automotive subsidiary – is no longer even the most disruptive or innovative in its field. Inspired and terrified by the rapid progress Google made, rival tech firms and auto-makers haven’t just caught up, they’ve overtaken the company that was first to hit the self-driving highway.

The arrival of the permanently connected car will reshape how we think about car ownership, safety and insurance. It might change how cars are built, and who owns them. It could even transform cities

Tesla vehicles come with software “Autopilots”, Uber has piloted self-driving taxis, Daimler and Embark have tested autonomous trucks, and the ability of a car to reverse park itself isn’t even a differentiating feature for luxury sedans any more.

And there’s so much more to automotive innovation than robot cars. The era of the connected car is upon us, and everything is changing.

Driving trends

At the heart of the connected car is the digitalization of driving. The ubiquity of computers and sensors in car components, and on the roads themselves, combine to make data gathering and processing possible on the scale required to safely disrupt century-old practices and business models.

At its simplest, it’s the way in-car and smartphone GPS systems have already revolutionized how we navigate cities. They will continue to do so as more data – such as where the nearest empty parking bay is – becomes available.

At its most extreme, the vast amount of real-time data available makes self-driving cars possible. But digitalization combined with urbanization is also changing attitudes towards transport. Why own a car if there’s a fleet of self-driving vehicles waiting to take you to where you need to go? Citizens are becoming attracted to the convenience and cost implications of the “sharing economy”, while city planners are starting to realize the benefits of reducing car ownership in terms of air quality, mobility and costs.

Digitalization combined with urbanisation is changing attitudes towards transport. Why own a car if there's a fleet of self-driving vehicles waiting to take you to where you need to go?

Today, the average car is in use just 5% of the time, and spends the rest of its life taking up space that could be better used for something else. Connected cars, set in motion by an emission-free electric engine, and able to spot congestion and nearby public transport, herald more efficient ways of getting around when the user can choose the quickest and most convenient method for a journey as they go.

The standards for 5G, the next generation of mobile internet technology, are being written specifically to support IoT devices like connected cars, travelling at high speeds in large physical groups.

High-speed internet connections enable autonomous cars, as they give them awareness of their surroundings – from traffic alerts and smart city grid information to peer-to-peer understanding of other devices and vehicles around them. On-board artificial intelligence can make decisions about routes and speeds, and share details of their own location with other road users, all vital for making self-driving cars smarter and safer than human drivers.

But once you have connectivity, you can also do much more.

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The eight areas of impact

Global consultancy PwC forecasts that annual sales of connected car technologies will triple to €122.6 billion by 2021. In its Connected Car Study report, it says technology will change the driving experience in multiple ways, such as:

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Mobility services

Urbanites in Paris, Bordeaux and Lyon have one of the most efficient and cost-effective ways of getting around town. Using their smartphone, they can locate the nearest Autolib’ charging station, download a PIN to unlock one of the electric vehicles charging there, and drive off. When they drop the car off at another charging point, they are billed for the time they’ve had use of the vehicle.

Autolib’s much-admired system is made possible thanks to connectivity that we take for granted now. Here, it enables both a phone and a car to report its GPS co-ordinates in real time, and secure digital authentication technology that ensures only registered drivers can take a vehicle. The service continues to innovate: privately owned electric vehicles can also navigate to an Autolib’ charging station using the same system.

It’s just one example of the ways in which mobility services are developing around connected cars.

It won’t be long before my car can book a cinema ticket via voice commands, direct me to the mall to watch the movie, find an empty parking space and, because it knows that I’m due an oil change, arrange for a mini service

Deon Liebenberg

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AI advancement

And this really is just the start. Advances in Artificial Intelligence (AI), cognitive computing and data analysis are being made all the time, and as more data is gathered about the way we drive and how cities are operating, new techniques for bringing it all together will enable services we may struggle to imagine today.

Deon Liebenberg is Managing Executive for the IoT at mobile operator Vodacom. “It won’t be long before my car can book a cinema ticket via voice commands, direct me to the mall to watch the movie, find an empty parking space and, because it knows I’m going to be parked for a couple of hours and that I’m due an oil change, arrange for a mechanic to come and do a mini service,” he says. “All with no input from me.”

Nick Walker, MD of Telematics at roadside assistance organization RAC, believes this will transform the relationship between companies like his and their customers.

“For 100 years we’ve provided the same service – call us and we’ll come out,” he says. “Now that’s changing. We can predict when a vehicle might break down. We have data on 2.5 million incidents a year, and we can analyze 60 data points in the lead-up to an accident, look for patterns and see if we could have predicted it.”

Connected cars will also be able to tell their owners when it makes more sense to use a different form of transport. Much as today’s park-and-ride schemes allow out-of-town visitors to avoid driving into urban centers, real-time awareness will bring a much more responsive way of dealing with the “last mile” of transport. The best place to park and catch a bus may not be the park and ride at all, but a midway point between the city outskirts and center.

The connected car will know.

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Changing fleet management

Why stop at the car, though? Its position as the de facto method of personal transport has defined the culture and aspirations of societies all over the world. It’s not just a US thing – in almost every country, car ownership is a status symbol and a practical enabler of choice.

That era is ending. The rise of car-sharing companies like car2go, Drivenow, Autolib’ and Zipcar is causing many people to rethink car ownership altogether. Why buy a car, and pay for insurance and maintenance, when you can use an app to find a fully fuelled one that no-one else is using?

The rise of car-sharing companies like car2go, Drivenow, Autolib’ and Zipcar is causing many people to rethink car ownership altogether

The end of that era has been accelerated by ride-sharing services like Lyft and BlaBlaCar. Naturally, people become accustomed to the ease of summoning a car and inevitably compare it to the cost and hassle of owning one.

Car-makers are taking this change very seriously. A study by AlixPartners argued that one car-sharing vehicle could displace 32 vehicles that would have otherwise been purchased. That’s 1.2 million displaced purchases by 2020. It’s why more and more auto manufacturers are launching their own sharing services. Ford is trialing a scheme to help owners rent out their cars, while Daimler launched car2go, and BMW teamed up with Sixt to develop the DriveNow scheme.

Frost & Sullivan argues that even that most desired of work perks, the company car, is slowly being replaced. More than half of the companies it surveyed for a report on corporate mobility said that they had piloted schemes that blend fleet management with traditional travel services: a travel allowance for the corporate lift-hailing account could be the economic and environmental solution of the future.

BMW already offers “intermodal” travel advice to i3 owners. It will plot a route that factors in real-time conditions and may advise leaving the car at home and getting on a train.

The logical conclusion of this holistic thinking is for manufacturers to stop selling cars and start selling “mobility” subscriptions. Early in 2016, Ford launched its FordPass app. One of the app’s features lets drivers book and pay for parking. Market watchers see FordPass as the first step towards a radical reinvention of Ford as a mobility provider, with future features for short-term car rentals or lift-hailing built-in.

At the launch, Mark Fields, then CEO of Ford, said: “Traditionally, we have dedicated a lot of energy and money to attracting new customers a year before they buy a new vehicle. Then we pretty much don’t engage until their next purchase. That’s about to change.”

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Entertainment anywhere

In its report, The Future of Mobility, Deloitte says that this shared infrastructure will give rise to greater demands for entertainment on the go. “As shared and autonomous mobility proliferate,” the authors write, “a tremendous opportunity arises for companies seeking to sell content, entertainment and generally enhance the time spent in-transit.”

Volvo has already announced a partnership with Netflix, for example, for streaming video to cars. “Augmented-reality windshields, currently being explored as a safety and navigation aid for drivers, could easily be repurposed for a hands-free world,” says Deloitte.

Want to make sure the kettle’s boiled and the heater’s on when you get home? Just ask Alexa

The Car Connectivity Consortium developed MirrorLink as a uniform standard for the integration of smartphones into the dashboard. But in parallel, Apple and Google have launched Apple CarPlay and Android Auto as car-centric versions of their own operating systems.

Ford is arguably in the pioneering position here. In January 2017 it announced a partnership with Amazon to bring the shopping giant’s virtual assistant Alexa into the car. Drivers and passengers will be able to use Alexa to make purchases of digital and physical goods while on the road and also control any smarthome equipment linked to their Alexa account.

Want to make sure the kettle’s boiled and the heater’s on when you get home? Just ask Alexa.

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Easy parking, easy payment

These big changes will take time to happen, but we’re well down that path of seamless transport journeys already. Cities like Hangzhou in China are fighting congestion by directing drivers to available parking spaces using smartphone apps, reducing the time spent searching streets for a gap by the curb.

There’s even a name for these kinds of communications. It’s called vehicle-to-things (V2X) technology

These kinds of services are moving from the phone to the dashboard, along with that all-important sister function: payments.

Earlier this year, payments giant Visa announced plans to automate transactions using connected devices. One important trial involves Honda and on-demand parking app ParkWhiz.

The applications in development by that partnership can warn the driver when fuel levels are low and provide instant directions to the nearest and cheapest fuel station. Not only can drivers pay for fuel from the dash, but pushing the prototype further, there are plans to integrate shopping from the forecourt store via touchscreen too.

The idea is that you pull up and drive off with fuel and snacks without ever leaving the car.

Parking is also a key feature of the system. Not only will the app find and reserve a space for you, it will offer a menu of time/payment options in a tap. If the time limit on the parking space is coming to an end, the Visa app will inform you of how long you have left.

There’s even a name for these kinds of communications. It’s called vehicle-to-things (V2X) technology.

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Incumbents playing catch-up

Traditional manufacturers have been caught off guard by the likes of Google and Lyft, but they know the pressure’s on. Scroll through the stories below to see some recent announcements you may have missed.

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Falling empires, new players

Although he works for a car company, Aric Dromi, Futurologist, is not afraid to voice radical ideas about the future of automotive. “My personal opinion is that half of car makers will have no reason to exist in 10 years,” he says. “Empires fall. There was an empire called Nokia and another one called Kodak, after all.”

Dromi references the announcement by Alibaba of an ‘Internet Car’ in July 2016 as evidence of a change in the way cars are made. Though the car was built by the Shanghai Automotive Industry Corporation (SAIC), Alibaba designed its operating system – YunOS.

‘We need to redefine what is a car’ - Aric Dromi

Access to cars is becoming a software issue. Dromi views this change in a radical way. He says: “If you have Uber on your phone, you have effectively downloaded a car.”

But could software makers go further and build cars themselves? Joe Simpson, research lead at Car Design Research, says new players will enter the car space, though he warns that expectations of cars are different from phones, for example. He says: “It’s obvious that Google and Apple would want to move into automotive. Google owns search and it owns video. It stands to reason it would want to own those things in a car.

If you have Uber on your phone, you have effectively downloaded a car

“And I’m pretty certain that Apple are doing something big. That could be some kind of iTunes for mobility, but they rarely do something like that without building a hardware experience. However, you can’t make a car that drains the battery after two years, like a phone. Making cars is a very particular skill and consumers have high standards.”

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Autonomous cars

Autonomous cars aren’t only an exciting area in their own right, they’re where all of these technologies and ideas terminate in one vehicle that can drive, refuel and service itself, and is available to rent on-demand and will deliver itself to your door when you summon it via an app.

McKinsey & Company speculates that anywhere between 30-100% of cars sold in 2040 will be able to drive themselves, a wide error margin that reflects just how little we can guess about the car of the future.

One of the reasons that analysts have such a wide margin of error for the potential success of connected and autonomous vehicles is because public opinion could turn against them at any time. Safety and security must be the highest considerations for manufactures and service providers.

In principle, autonomous cars are safer than human-driven ones. If entire highways are computer controlled, cars should be able to talk to each other and co-ordinate their movements.

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The virtues of V2V

Vehicle-to-vehicle (V2V) communication will enable cars to broadcast their position, speed and so on to other cars in order to avoid collisions, while on-board radar, laser and optical sensors can, in theory, react with superhuman agility to unknown obstacles, like a falling tree or a pedestrian stepping into the road.

This raises some interesting possible scenarios.

Teaque Lenahan, group director of design house Fjord/Accenture, thinks it will be a long time before all cars are fully autonomous, but the period when humans and AIs share the tarmac will be fraught with cultural struggles. “We’ve already seen issues with self-driving cars not understanding human motorists. I can easily see humans ‘gunning it’ to get the better of rule-abiding driverless vehicles,” he says.

And the same goes for pedestrians. Aric Dromi says: “If pedestrians can walk out and never be run over, they might do it all the time. We could have giant traffic jams, and whose responsibility would it be? None of us knows – and that’s why it’s so fascinating.”

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‘The autonomous future of cars will allow us to think differently’ - Teaque Lenahan

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Ransomware on the roads

The computer security issues are just as serious as the physical safety ones. Reports of hacked or hackable car systems are already starting to appear and have worried investors in autonomous tech.

Andy Davis, transport cyber security practice director at NCC Group, paints the nightmare scenario: “Media reports tend to focus on the physical attacks, but most cyber attacks come from organized crime – and they want to make money, not kill the general public.”

For this reason, Davis says the biggest current threat is “ransomware”, where criminals expose vulnerabilities and make blackmail threats to carmakers. But as connected cars become more widespread, he believes drivers could also be targeted. “It would be an easy way to make money for hackers,” he says.

You get in the car and a message on the infotainment system says: ‘Send money if you want your car to start’

Andy Davis

“You get in the car and a message on the infotainment system says: ‘Send money if you want your car to start’. I can also see hackers stealing ID and card details from cars to sell on the black market.”

Beyond the car, the internet-connected devices it communicates with are also vulnerable. In the famous 1969 movie The Italian Job, Michael Caine brings Turin to a halt by hacking the traffic light system of its day: with smart city grids, any vulnerability could open up a remote attack with similar consequences.

Three pillars to security success

Security specialists like Gemalto are working hard to secure the cars of the future today. Gemalto’s three-pronged strategy is to secure the device, secure the cloud and ensure that security is maintained and updated for the lifecycle of the device.

Whether that’s a car, a TV or a CCTV camera, the biggest threat to the IoT right now is from devices which are left connected but unmanaged. Never updated to protect against new threats, they pose a risk to themselves and whatever network they are connected to.

The threat to the IoT is very real: the world’s largest Distributed Denial of Service (DDOS) attack was facilitated by a botnet of compromised IoT devices in 2016. At the same time, security companies are rapidly learning the best response to these threats, which can be boiled down to multilayered security based on encryption, identity verification and rapid detection of unusual behaviors.

Davis says protecting cars is difficult because of the number of entry points. This includes external devices. “Lots of aftermarket device manufacturers don’t think at all about security. This is a concern for OEMs, as even if they tighten security, drivers could let attackers in through the back door.”

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‘Telematics is an obvious entry point for an attacker’ - Andy Davis

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Making it happen

Many of the key elements for enabling the future of transport are already in place. Solutions such as Gemalto’s Sentinel Embedded suite of tools provide a simple and cost-effective way of managing remote devices, including on-board systems for cars, and delivering software updates securely for the lifecycle of a connected system. Sentinel Embedded handles licensing and monetization issues as well.

The challenges around security, and the reputational damage if something goes wrong, are inspiring partnerships between car manufacturers and best-in-class industry leaders like Gemalto.

One of the key hardware challenges for connecting cars has already been solved, too. It’s called the embedded SIM, or eSIM for short.

The eSIM is designed for cars: it can withstand vibration and heat, is easily installed, is hard to access (and therefore secure) and can be remotely provisioned. That’s important because manufacturers build thousands of cars in one place, but sell them all over the world, so knowing which carrier to tie which factory-fitted SIM card to would be tough.

The eSIM can be provisioned over the air and manufacturers can use tools like Gemalto’s On-Demand Connectivity solution to manage many thousands of cellular subscriptions in one place.

This is why the eSIM, though well suited to any connected machine (such as smart meters), has been embraced first by car companies. General Motors, Jaguar Land Rover, Renault Nissan, Scania and Volvo have already publicly committed to the standard.

The challenges around security, and the reputational damage if something goes wrong, are inspiring partnerships between car manufacturers and best-in-class industry leaders
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new mobility automotive connected cars

5G = V2X

Building such a complex network of V2X connections, however, will depend on 5G technologies which are currently still under development. The key advantage of 5G networks is that they won’t be as subject to congestion when multiple users log on at once. Quality drops when everyone in a cell-tower’s radius starts to download something today, and a report by the GSMA projects 75 billion connected things by 2025.

5G has the potential to connect an almost infinite number of low-bandwidth objects, which will be critical to keeping thousands of cars moving on connected highways. While the 5G spec won’t be completed until 2018, the narrowband IoT standard is already in use today.

Telecoms suppliers have created the “narrowband” NB-IoT standard to make the best use of 5G for low-power connected devices.

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Identity protection

One area which will be important to pay attention to is robust identity verification. For the most part, today’s cars are accessed by physical tokens such as keys or hard-to-clone radio devices, much as they have been for decades. But manufacturers are already integrating more modern identification systems on production cars.

Here, the mobile phone is emerging as the important replacement for a physical key. Daimler has launched its Mobile Key app, Volvo plans to offer cars without keys from 2017. Using a mobile phone to open and control a car gives access to built-in biometric sensors and the ability to grant other drivers temporary access without giving them a key.

Specialists like Valeo are building platforms that take the keyless concept further. Valeo’s InBlue solution lets drivers use a smartphone to lock, unlock and start their car, but also transfer vehicle data. All of which is of particular interest to the new generation of car-sharing companies. One of them – Parcours – is already testing InBlue.

‘The connected car will change the monetization of the global industry’ - Dominique Doucet

Sharing car pools with strangers or taking an autonomous cab for a ride requires a huge amount of trust, and the ability to verify a rider is who they say they are will have to underpin any system. Right now, car hire firms such as Autolib’ reduce overheads and increase convenience by allowing customers to pick up and drop off cars without visiting service centers and filling in paperwork. A car’s position is displayed on a map along with a PIN to unlock it.

As adoption of Autolib’-like services increases, so does the importance of being able to confirm the identity of the driver, not least for the purposes of billing the right person and ensuring the car isn’t stolen, but also for insurance and legal responsibilities in case the car is involved in an accident.

Better ways to provide secure identities are emerging, through products like Gemalto’s Identity & Access Management Solutions. These will allow people to create trusted identities so that only those authenticated people and objects can access the car – both during manufacture and end use.

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Driving to the future

The century-old car industry is going through its most prolific period of change ever, and the speed with which automotive technology is evolving is breathtaking. Just a few years ago, many of the concepts which we can see on our streets weren’t expected to be commercialized for decades. Everything is changing: from how we unlock a vehicle to how we navigate in it and the very way we travel around our cities and neighborhoods.

But some things will stay the same. As Ken Washington, Vice President of Research and Advanced Engineering at Ford, says: “It’s an exciting time to be an automaker... We are still going to be a great automaker, but this will offer something more.”

New partnerships are emerging and will continue to grow, and as collaborations between technologists and automakers evolve, ever-more inspiring innovations will appear. The future of the industry belongs to those who can bring together the very best thinking from all fields to tackle the transport issues of the future.

Everything is changing: from how we unlock a vehicle to how we navigate in it and the very way we travel around our cities

“There are many tough, fundamental or even existential questions that are looming for automakers and suppliers,” say the authors of McKinsey’s Automotive Revolution – Perspectives Towards 2030 report published last year.

“Some commentators suggest these disruptions will mark the decline of the automotive industry,” they continue. “But, in our view, growth in the personal mobility market will accelerate as new sources of recurring revenues supplement slowing growth from one-time vehicle sales.”

In other words, for those who can adapt to the connected, electric, autonomous world we’re entering, and do it securely and with best-in-breed platforms to back them up, there will be huge gains from new revenue streams and services that will be developed too.

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