GDPR May Be Slowing Connected Car Growth

Automakers sold 5.9 million connected cars in the first quarter of this year, but jitters over European privacy laws may be slowing the growth of the technology.

Connected car sales rose just 1.5% from the first quarter of 2017, the research group Bloomberg New Energy Finance (BNEF) noted in a recent report. This represents a slowdown for a set of features that had been making strong gains in popularity, the report said.

One reason may have been concern over how the technologies may be perceived under the European General Data Protection Regulation (GDPR), which is set to take effect on May 25.

Connected cars span a wide range of different capabilities, from access to streaming media over cellular networks to systems for sharing location, speed and direction with other vehicles nearby. Some can send data about engine condition and driving behavior to manufacturers and insurance companies.

If current trends continue, 25% of all new passenger cars will be connected, BNEF found.

Connected car sales grew by leaps and bounds soon after the first connected features were introduced. After quarterly sales passed 1 million vehicles in 2012, they exceeded 4 million by the final quarter of 2015, according to BNEF.

But manufacturers may be hesitant to increase their connected car offerings until they learn more about the public’s reaction to them, the report said.

GDPR will cover data about transactions that take place in Europe and will affect any company that does business there. For carmakers it will mean asking consumers’ consent to collect data, giving them access to that data and deleting it upon request.

This is likely to get complicated as cars transmit more kinds of data to more places. Automakers exchange data with many suppliers and may carry the risk of fines and embarrassment if any of that data gets into the wrong hands, the consulting firm BearingPointhas noted.

Vehicles may already have more information than consumers (and maybe manufacturers) are aware. In 2015, the German auto club ADAC inspected a BMW 320d and found it transmitted personal data including destinations entered on the navigation system and contacts synchronized with the driver’s smartphone.

The report also covers developments in ride-hailing, car-sharing and autonomous vehicles. BNEF estimated there are now 48 million ride-hailing drivers and 900 million customers globally. Governments around the world are responding to the industry’s growth in opposite ways, with new taxes or fees being proposed in places including Iowa, Philadelphia and Czech Republic, while cities such as Arlington, Texas, subsidize ride-hailing services to take the place of public transit.

Fleet-based car-sharing services added 20,000 vehicles to a worldwide total of about 200,000 in the first quarter. But there are 1.35 million cars available through peer-to-peer sharing services like Turo, which last year scored funding from Germany’s Daimler. In March, the Mercedes-Benz parent company merged its mobility services with BMW’s.

Autonomous vehicle development and testing continued despite worries set off by the apparent first fatal accident involving a self-driving car, which took place in Arizona on March 18. While that accident and a fatal crash of a Tesla on Autopilot sparked debate, there were no major changes in AV laws in the first quarter.

In the US, the Senate’s AV START Act remains stalled.

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