Weekly Brief: 2013 Year in Review

Jan

Jan Stojaspal

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30th December 2013

It was Machiavelli, the famous Italian polymath and father of political science, who remarked that “whoever wishes to foresee the future must consult the past.” 

As we stand at the doorstep of 2014 and wonder what the new year will bring, it’s only fitting that we step back and re-examine the prominent headlines and themes of 2013 for clues to the 12 months to come.

There’s plenty to return to, from milestones like Ford producing its ten-millionth SYNC-equipped automobile to novel ideas like General Motors implementing Telematics Genius Bars at its dealerships.

And so, without further ado, here’s the 2013 Year in Review. 

The autonomous vehicle Space Race

Self-driving cars may be years away from trundling off factory floors onto dealership lots, but it’s hard to deny autonomous vehicles the top trend of 2013. Just look at the sheer number of different parties that inserted themselves into the driverless car conversation.

First, there was Nissan unveiling plans to introduce multiple, commercially viable Autonomous Drive vehicles by 2020. The company established partnerships with the University of Tokyo, Oxford, Stanford and MIT to turbo-charge innovation in the space and broke ground on a Japanese testing site dedicated purely to autonomous driving and self-driving technology.

Not to be outdone, Continental signed partnerships with BMW, Google and IBM to act as tier 1 partner for a variety of autonomous vehicle endeavors while Bosch piloted a fleet of experimental autonomous vehicles on public roads in Germany. Stateside, Bosch also secured a collaboration agreement with the Stanford Artificial Intelligence Laboratory’s Autonomous Driving Team.

Then there were the national governments that got in on the action. Sweden announced a pilot in Gothenburg with 100 self-driving cars testing everything from improved traffic efficiency and road safety to infrastructure requirements for autonomous driving. And China unveiled “Fierce Lion 3,” the first self-driving car to pass a freeway test.

Finally, Cadillac debuted “Super Cruise,” a semi-automated driving system, which lends the driver a helping hand with braking, speed control and lane following. The system still isn’t street-ready and is not intended for a fully autonomous vehicle, but it signals the gateway solutions we’re likely to see more of in 2014, with multiple automated functions and advanced driver assistance systems (ADAS) aiding drivers in their everyday tasks behind the wheel.

(For more on autonomous vehicles, see The autonomous car: The road to driveless driving.)

Usage-based insurance gains momentum

For years, industry insiders have awaited the tipping point in usage-based insurance (UBI), which uses GPS tracking and driving behavior monitoring to determine insurance premiums. It’s a no-brainer of an idea, yet traction has been slow. And so while 2013 may not be remembered as the year UBI finally surpassed its tipping point, the year marked significant new offerings and faster uptake in many primary markets, including the United States and the United Kingdom.

To that end, LexisNexis published a report stating that one in three U.S. consumers are now aware of UBI, three times the awareness rate of 2010, while Towers Watson reported that 55% of drivers in the six largest motor insurance markets in Europe are now open to the idea of a usage-based insurance offering.

In terms of specific solutions, we saw some creative new additions to the market, like HIMEX’s UBI 3D offering, which blends 3D virtual worlds and gamification to make insurance telematics offerings more attractive to consumers. They can now see their journeys rendered in a 3D online interface and watch their own driving performance each day.

Autocar introduced an interesting UBI bundle, Autocar Start, which aims to catch the fancy of young drivers with a provisional license, a new smart fortwo coupé pulse, 40 hours of professional instruction from the Mercedes-Benz Driving Academy and a UBI insurance package from Carrot, all for £299/month over three years.

Taking a quick tour around the world, in Australia Insurance Box and IntelliTrac were the first to offer UBI. And, in the U.K., insurethebox created its own entirely in-house telematics platform (dubbed “Big Telematics”) while, in the United States, Allstate expanded its UBI program DriveWise from 10 states to 16.

In 2014, we expect the trend to continue, with more pilots expanding from states and regions to nationwide offerings. The success of these transitions will likely determine the speed with which insurers ramp up UBI offerings in specific markets around the world.

(For more on insurance telematics see, Industry insight: Insurance telematics.)

EVs buckle in for a bumpy ride

In early October 2013, a Tesla Model S traveling at a highway speed struck a large metal object and burst into flames. The following six weeks witnessed two more Teslas catching on fire. As attention grew in U.S. media, The National Highway Traffic Safety Administration threatened to open an investigation, and Tesla Motors CEO Elon Musk was forced to take to the airwaves in defense of the safety of lithium-ion batteries, which were determined to be the source of the fires.

It was that sort of a year for electric vehicles. Lows followed by highs. Highs followed by lows.

In May, Israeli start-up Better Place, which once aimed to prove that EVs were ready to pervade world markets and raised $850 million in investor funding, went bankrupt, only to be later purchased out of bankruptcy by a group of entrepreneurs for $12 million.

On the infrastructure side, a number of companies announced commitments to expand public charging infrastructure, BMW chief among them. Upon launching its new i3 EV, the German carmaker acquired a two-percent stake in Chargemaster, a U.K.-based provider of charging stations for electric vehicles.

BMW also teamed up with five other players in the EV space: Bosch, Daimler, EnBW, RWE and Siemens. Together, they are the founding members of the “intercharge brand,” which aims to create a European network for charging stations, where drivers can charge their cars no matter the country or region, all under the same contract.

In the United States, Ford partnered with PlugShare, an aggregator of public charge stations, to provide real-time charge station information to drivers of Ford’s plug-in hybrid vehicles. Ford is the first manufacturer to offer real-time charging station location information through its smartphone app, MyFord Mobile.

However, these positive developments were undercut by an end-of-year downer from the U.S. Energy Information Administration, which reported that, in the U.S. at least, EVs will only represent 1% of total vehicles sold come 2040. Granted, that’s a 25-fold growth from today’s sales levels, but EV enthusiasts like to envision a future when EVs are the predominant vehicles on the road. That day, it seems, is likely a ways off, certainly far beyond 2014.

(For more on electric vehicles, see Industry insight: Electric vehicles.)

Refreshed telematics platforms

Whereas self-driving cars, EVs and UBI offerings are still emerging, traditional telematics systems, as of 2013, have decidedly gone mainstream. That being said, upgrades and new rollouts abounded this year, with many a latecomer to the market finally introducing solutions.

Volkswagen unveiled VW Car-Net, a solution similar to GM’s OnStar in that it provides comprehensive roadside assistance and crash notification bundled with connectivity features like in-vehicle navigation, remote vehicle status and remote lock/unlock.

Porsche rolled out Porsche Car Connect, an in-dash solution with navigation, Bluetooth, apps and various remote control functionalities, including stolen vehicle tracking. The system will be available on the Panamera S E-Hybrid model and the 2015 Porsche Spyder.

Then there was STARLINK, Subaru‘s new in-car connectivity brand, and Infiniti InTouch, Infiniti’s new in-car platform, both of which couple advanced infotainment features with safety features.

On the upgrade front, Toyota expanded its Entune telematics system from a limited collection of in-dash apps to a broad range of in-vehicle connected services — audio, phone, navigation, music, etc.

Honda, meanwhile, converted the next generation of HondaLink to a 100% Cloud- and app-based telematics platform connecting customers to online content, both inside and outside the car thanks to mobile apps.

Finally, BMW upgraded its ConnectedDrive technology with Internet-based services like a dictation function for writing emails while driving, and advanced integration of Internet search, travel and social media services via the SIM card on the customer’s smartphone.

(For more on this, see Industry insight: Telematics and apps.) 

Infotainment & the rise of apps

Openness is winning the war. Increasingly, automakers recognize that third-party developers can spawn innovation that trumps the need for total control at all costs. 

Ford, to that end, unveiled an open developer platform, OpenXC, to encourage developers, researchers and hackers to focus on using vehicle data to create breakthrough innovations in the car environment. 

General Motors followed suit with a flexible application framework that enables developers to interact with and build upon the infotainment systems in GM vehicles. GM will offer developers a software development kit through an online portal and allow them to work with GM in a secure and controlled manner to design, test and deliver relevant, customizable and seamlessly integrated automotive apps.

Near the end of the year, Car Connectivity Consortium debuted version 1.1 of its MirrorLink standard, which enables carmakers to rely on drivers‘ smartphones for data connection, GPS and app content. Pertinent to this conversation, the new version allows third-party developers to create apps that are interoperable between a majority of the world’s most popular cars and handsets. Volkswagen has already committed to embracing MirrorLink in 2014.

The openness trend even extended into the fleet management space as TomTom Business Solutions allowed third-party developers to create new applications for use in and around the vehicle. TomTom plans to grant access to the Bluetooth channel on TomTom's in-vehicle LINK device, which the company hopes will lead to new apps.

(For more on this, see Telematics and operating systems: The 'open' versus 'closed' debate, part I, and Telematics and operating systems: The 'open' versus 'closed' debate, part II.)

Acquisitions

Mergers and acquisitions are supposedly the way of the future for telematics as more big players press in and force consolidation on an industry with myriad small players vying for market share. But 2013 was relatively tame on the M&A front.

There was, of course, SiriusXM‘s $530-million purchase of Agero’s connected vehicle business, which immediately vaulted SiriusXM into the position of the leading telematics service provider for OEMs, with BMW, Nissan, Toyota, Acura, Honda and Hyundai among its newly acquired clients.

In fleet, a U.S.-based private equity firm purchased Omnitracs for $800 million in cash. The acquisition includes all of Omnitracs’ operations in the United States, Canada and Latin America.

Also of note is Ford’s $10-million acquisition of in-car-connectivity specialist Livio, which builds products and software tools to support standardized smartphone-car connectivity. Livio works with an array of auto OEMs, and its software is compatible with commonly used apps and all major smartphone devices.

2014 and beyond

Looking forward to 2014, the themes of self-driving cars, EVs and UBI are likely to feature prominently, but we wouldn’t be surprised if other topics, like the rise of 4G LTE and vehicle-to-X solutions, also start to assert themselves. 

Mercedes-Benz has already announced that, by the start of 2014, its newest vehicles will come equipped with sensor-based technology that permits the exchange of information between individual vehicles as well as between vehicles and infrastructure. 

Honda has hinted at a vehicle that can establish a communication channel with the smartphones of nearby pedestrians. Wherever the news unfolds, we’ll keep you posted

(For more on 4G LTE, see 4G LTE and the future of the connected car, part I, and 4G LTE and the future of the connected car, part II. For last year's Year in Review, see 2012 Year in Review Weekly Brief.) 

The Weekly Brief is a round-up of the week’s top telematics news, combining TU analysis with information from industry press releases.

Andrew Tolve is a regular contributor to TU.

For all the latest telematics trends, check out Consumer Telematics Show 2014 on Jan. 6 in Las Vegas, Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, and V2X and Auto Safety USA 2014 on July 8-9 in Novi, Michigan.

For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.