Connecting cars remains one of the most unnatural acts in the world of IoT. “Connected Car” headlines might make you think otherwise, but the reality is that precious few cars on the road today are connected with a live, provisioned and functioning wireless connection. That being said, General Motors claims 16M of those cars on its own OnStar network making the company the de facto leader in car connectivity.
Noting GM’s leadership is significant in a world where the one-time ruler of the automotive industry (now the sixth largest ranked by global vehicle sales) has spent decades exiting markets, laying off workers, and closing factories. All of that downsizing has failed to diminish GM’s technology leadership emanating like a beacon from its Warren, Mich., Tech Center and development operations in Israel, Canada, Georgia, Texas, Silicon Valley, and China.
When GM makes a technology announcement it is a signal to the global automotive industry that The General can still call the tune. That’s precisely what GM did this week in announcing its plans to launch 5G connectivity in select vehicle models beginning with model year 2024. The announcement follows, by one year, the company’s announcement of its plans to launch 5G in select models in China in model year 2022.
GM isn’t the only car company bringing 5G connectivity to vehicles, It is the first, though, outside of China, to lay its 5G cards on the table. The current 5G announcement is reminiscent of GM’s launch of LTE-enabled OnStar connectivity in all of its cars (in the U.S.) beginning in 2014.
To this day, though, car companies including GM struggle to define a message around vehicle connectivity that is compelling to consumers. At its launch more than 25 years ago, OnStar was able to leverage the novelty of vehicle connectivity and the fear factor to sell the solution: If you are ever in a crash, OnStar will ensure that help is on the way with its built in automatic crash notification (ACN). GM has notably revived those commercial messages in recent weeks.
The onset of smartphones more than 10 years ago introduced a false sense of security for most drivers, dissolving the fear factor. Auto makers have struggled since to define a new car connectivity message sufficient to convince customers to part with $10-$20/month or more for a subscription.
When GM introduced LTE connectivity and inaugurated its current partnership with AT&T it offered in-vehicle Wi-Fi along with the ability to add your GM connected vehicle to your AT&T wireless plan. Both offers were intriguing enough to attract at least some interest – but not enough to solve the connectivity customer retention challenge.
The subscription drive by car makers such as GM reflects an enduring desire to “monetize” the vehicle connection. GM and its rivals offer elaborate subscription packages including Wi-Fi, access to on-board streaming (instead of streaming via a connected smartphone), software updates, and search. None of these offers have generated much traction – though consumer awareness and interest is slowly growing.
Only one company has succeeded in insinuating a seamless connectivity into the daily car ownership experience: Tesla. Tesla owners drive vehicles that operate almost like sentient beings – anticipating troubles ahead and interacting with their drivers. The wireless connection is either included in the price of the vehicle or the buyer is required to pay a nominal $10/month for Internet access – which supports a hybrid navigation experience.
Wireless connectivity is not a big part of the Tesla experience unless you consider the heartbeat of monthly software updates (most often handled via Wi-Fi actually), and access to Internet search important. Of course, you can also stream Netflix in your Tesla while you’re charging – but that isn’t a daily scenario. Tesla isn’t pushing a connectivity subscription beyond the $10 a month, though it has proposed a $199/month self-driving subscription.
The onset of 5G does promise a different connected car experience including higher speed communications, lower latency and direct communications with other 5G-equipped cars (mainly for collision avoidance applications), enhanced vehicle location technology, and a more reliable connection. Most important of all, though, is that the 5G connection at launch will be backward compatible to LTE.
The transition to 5G will not leave LTE-equipped cars without connectivity. That being said, 5G arrives as 2G and 3G networks in the U.S. and, in a few years, in Europe, are being decommissioned. This, too, will accelerate 5G adoption.
It is no exaggeration to say that both the wireless industry and the automobile industry were waiting eagerly for GM’s announcement. Connecting cars is an expensive business and one that, these days, is fraught with cybersecurity concerns. It’s just hard for an automotive engineer to get excited about connecting cars when customers are ambivalent and the return on investment is unclear.
Add to these concerns regulatory uncertainty regarding the use of the 5.9Ghz band and the result was an entire industry frozen in amber – unwilling to commit to the adoption of next generation wireless connectivity. GM’s announcement was the essential starting gun – the ice breaker – that will spur competitors to cop to their own 5G plans.
The announcement may also help return some respectability to the business of connecting cars. AT&T is GM’s anointed connectivity partner. Even if car makers are still struggling to define the connected car killer app, there is no chance AT&T would risk suffering the ignominy of losing GM to a competitor such as T-Mobile or Verizon.
To drive home the importance of the AT&T-GM relationship, GM’s press release notes: “Since the launch of 4G LTE in 2014, GM owners have used more than 171M gigabytes of data across its brands, which is equivalent to nearly 5.7B hours of music streamed or more than 716M hours of streaming video.”
Curiously, GM did not highlight in its announcement how many emergency response notifications it has received historically or in the past year – including lives saved, stolen vehicles recovered, and drivers assisted. This is a clear disconnect that reflects GM’s struggle to come to terms with the challenges of connected car messaging.
In fact, GM is at the heart of an important industry inflection point. Soon, vehicles around the world will require connectivity to fulfill safety mandates designed to reduce or avoid vehicle collisions. GM’s own Super Cruise hands-free driving system requires an OnStar subscription to operate.
In the near future multiple in-vehicle systems from navigation to intelligent speed assistants and, of course, software updates will require vehicle connectivity. All cars will eventually come with a subscription in addition to the sticker price. It’s either reassuring or alarming to see that GM is struggling to come to terms with this reality. Presumably the marketing minds at GM have decided that the time isn’t quite right to highlight the reality of the OnStar subscription and its relevance to vehicle safety. Wi-Fi and streaming media access are seen as safer 5G talking points for now.
GM’s announcement will help to clear the fog of corporate ennui enveloping 5G car connectivity. The message is clear from The General that 5G cars are on their way – and GM intends to lead the evolution. Competing car makers can be expected to follow swiftly behind GM with their own announcements.
It comes down to a simple proposition. In a rapidly evolving 5G world – where 5G networks are rolling out globally faster than any previous network topology – no auto maker will want to be caught selling LTE cars against 5G-equipped cars. The 5G car won’t be merely a connected car. It will be an intelligent car – and GM wants to have the smartest cars on the road.