Connected cars are vehicles that are equipped with internet connectivity and can communicate with other devices and networks. The Internet of Things (IoT) has brought about a revolution in the automobile industry, and connected cars are at the forefront of this change. With advanced sensors and data analytics, connected cars can provide drivers with real-time information about traffic, weather, and even the condition of the car itself. But can you make money on connected cars? In this article, we’ll explore the potential ways to make money from connected cars.
Car Manufacturers
Car manufacturers are one of the main players in the connected car market. They are investing heavily in research and development to create new technologies and services that will enhance the driving experience. The main source of revenue for car manufacturers is still the sale of cars, but connected cars offer a range of new opportunities for revenue generation. Here are some of the ways that car manufacturers can make money on connected cars:
a. In-car Services
Connected cars can provide drivers with a range of services such as infotainment, navigation, and vehicle diagnostics. Car manufacturers can generate revenue by offering these services to customers as subscription-based service. For example, General Motors’ OnStar service offers a range of services to customers, including emergency assistance, stolen vehicle tracking, and remote vehicle diagnostics. Customers pay a monthly fee for these services, providing a steady stream of revenue for the car manufacturer.
b. Data Collection
Connected cars generate a huge amount of data that can be used to improve the driving experience and create new services. Car manufacturers can collect this data and use it to develop new technologies and services. For example, Ford is using data from its connected cars to develop new services such as predictive maintenance and personalized marketing.
Telecommunications Companies
Telecommunications companies are another key player in the connected car market. They provide the infrastructure that allows cars to communicate with other devices and networks. Telecommunications companies can generate revenue in several ways:
a. Data Plans
Connected cars require data plans to access the internet. Telecommunications companies can offer data plans to customers, generating revenue from the sale of data. For example, AT&T offers data plans for connected cars, providing customers with internet access while they are on the road.
b. Infrastructure
Telecommunications companies can also generate revenue by providing the infrastructure that allows connected cars to communicate with other devices and networks. For example, Verizon has partnered with Honda to provide 4G LTE connectivity to Honda’s connected cars.
Insurance Companies
Insurance companies can benefit from the data generated by connected cars. The data can be used to develop new insurance products and services that are tailored to the needs of individual drivers. Here are some ways that insurance companies can make money on connected cars:
a. Usage-Based Insurance
Usage-based insurance is a type of insurance that charges customers based on how they use their cars. Connected cars provide insurance companies with real-time data about how drivers use their cars, allowing them to offer usage-based insurance products. For example, Progressive’s Snapshot program uses data from connected cars to offer usage-based insurance to customers.
b. Risk Analysis
Insurance companies can also use data from connected cars to analyze risk and develop new insurance products. For example, insurance companies can use data on driving behavior to develop new products that are tailored to the needs of individual drivers.
Service Providers
Service providers such as parking companies and gas stations can also benefit from the data generated by connected cars. Here are some ways that service providers can make money on connected cars:
a. Personalized Services
Service providers can use data from connected cars to offer personalized services to customers. For example, parking companies can use data on driving behavior to offer personalized parking services to customers.