America to See 80 Million New Connected Cars by 2025

The US car market is expected to grow by 27% after being affected by COVID-19 as per the latest report by 2025. It saw a 6.8% decline year over the year in 2020. The data which is only related to passenger cars with embedded connectivity further states that the cumulative shipments during 2020-2025 are contemplated to cross $80 million units with a Compound annual growth rate (CAGR) of 10% in the US. During 2020-25, as per research, $80 million new connected cars will be added to the US market.

The first half of 2020 was painful for the automobile industry as they had to shut down manufacturing units in the wake of COVID-19. Specifically in the US from March onwards, most Original equipment manufacturers like Toyota, Volvo, Ford, GM, and Honda, had to put up their production approximately for two months. During H2 2020, US car sales continued to recover from 21% year over the year in H1 to 3%. GM accounted for a quarter of the market and stayed the market leader, in H1 2020. Today, more than 95% of its cars provide embedded connectivity, which enables customers to relish services from navigation and hotspot to vehicle diagnostics.

Meanwhile, Research Associate Fahad Siddiqui said, “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. AT&T is the preferred telecom operator due to the variety it offers in its data plans, customizations for specific vehicle models, and its collaborations with manufacturers to speed up research and development in the connected car ecosystem.”

“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). 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,” Soumen Mandal, Research Analyst.

Talking about the connectivity perspective, Research Vice-president Neil Shah said, “In 2020, 4G LTE cellular connectivity had a mammoth share of 92%. 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. By 2025, 5G cars will account for more than a quarter of the connected car market. With the growing adoption of 5G connectivity, there is a need to make use of C-V2X technology for improved safety features, better infotainment options, and a greater capacity to process large amounts of real-time data. Automakers’ bullish sentiments toward electrification and aggressive plans for employing 5G technology will help TCU suppliers in expanding their 5G portfolios.”