The connected car shipments in the US are expected to cross 80 million units during 2020-2025 with a CAGR of 10 percent, and 5G cars will account for 27 percent of the market by 2025, according to a new report.
The connected car data refers to only passenger cars with embedded connectivity.
The US connected car market managed to weather the Covid-19 storm with a moderate decline of 6.8 percent (YoY) in 2020, according to the latest research from Counterpoint’s Smart Automotive Service.
H1 2020 proved to be painful for automakers worldwide, with most of them forced to shut down their manufacturing facilities to curb the spread of Covid-19.
US car sales continued to recover during H2 2020, declining 3 percent YoY compared to 21 percent YoY during H1 2020.
The US-connected car market is becoming mature. OEMs’ electrification plans and push for driverless technology are helping speed up this process.
GM has increased its budget for electric and automated vehicles from $20 billion to $27 billion and plans to launch 30 new EVs globally in the next five years (over 20 of these are planned for North America alone), -Soumen Mandal, research analyst .
In 2022, GM will launch 5G-enabled cars in China followed by the US region.
“Ford, on the other hand, plans to deploy cellular vehicle-to-everything technology (C-V2X) in its models in the US beginning 2022,” Mandal said in a statement.
Collaborations with telecom operators are helping automakers deploy cars with embedded connectivity faster than before.
“AT&T has more than 30 brands using its network, some notable ones being BMW, Ford, Chevrolet, Jaguar and Honda. Verizon’s connected car portfolio, on the other hand, has a handful of OEMs, including Toyota, VW and Mazda, with plans to add more soon,” said Research Associate Fahad Siddiqui.
In 2020, 4G LTE cellular connectivity had a mammoth share of 92 per cent.
“Going forward, we can expect 4G penetration to increase, with 3G being phased out slowly. 5G-enabled cars entered the market in 2020 but they were limited to China only. The US will see 5G cars in the market from 2022 onwards with BMW and Ford leading the foray,” said Research Vice-president Neil Shah.
By 2025, 5G cars will account for more than a quarter of the connected car market.
“Automakers’ bullish sentiments toward electrification and aggressive plans for employing 5G technology will help TCU suppliers in expanding their 5G portfolios,” Shah added.