During the first internet boom, the automotive industry tried to implement connectivity features into their cars but they failed to launch a product that added value for the customers. The required technology for those features at this time was not sophisticated. In particular, the then newly launched UMTS-standard could not provide the necessary up- and download-rates. Although there have been attempts in the past to establish connected cars, but many people do not really know what turns a typical car into a connected car.

Definition of connected cars

In reality, the term “Connected Car” is used in many variations and is not clearly defined by the industry. However, scientific connotation often differentiates between two types of connected cars – 1.0 and 2.0.

Connected Car 1.0

As of 2019, even most middle-class cars can be viewed as Connected Cars 1.0. In most cases they provide:

  • Infotainment systems –  the combination of navigation, driver assistance, and several other systems
  • Telematics – in most cases telematics like vehicle diagnosis (notification if the tire pressure is too low etc.) or fleet management applications are implemented


Connected Car 2.0

The next step in the evolution of vehicles are Connected Cars 2.0. Infotainment systems will have to develop from proprietary OEM systems to more open, standardized systems that allow the user to implement his own streaming services into the car.

But more importantly, the Internet of Things not only enables Car to Car communication to prevent accidents but also the communication of vehicles with infrastructure. It will be interesting for which cases this technology can be used. From the optimization of traffic flow to innovative parking systems or even the possibility of using an entire network of charging stations for electronic cars all around the city with an integrated and automated billing system.

Connected Car Technologies

Telecommunication standards – 5G

Both car to car communication and car to infrastructure communication are requirements for autonomous driving. This new kind of communication will generate a huge amount of data, so of course there has to be a network powerful enough to handle all those data. There is an excitement in the automotive and communication industry, that 5G will act like a catalysator for autonomous driving because it enables communication to be carry out with:

Theoretical latency of 1 to 2 ms
• Up to 10 Gbps download and upload rate

Artificial Intelligence (AI) / Machine learning

Artificial Intelligence will play a big role in Connected Cars. The meaning of AI goes further than just processing data from sensors and devices in a car and solely providing them to infotainment or telematics systems.

Cars will be capable to evaluate the behavior of its driver including the level of fatigue, emotional stress, attention, and many more factors to provide a safer and more comfortable way of driving based on a divergence of the usual behavior pattern.

Artificial Intelligence will also be used for predictive maintenance in a way we cannot comprehend nowadays. The interplay of software, hardware, and collected data will provide the ability to identify correlations and dependencies within the mechanical parts of cars and even offer solutions to possible defects of the car.

Services & Global Connectivity

If connected car services are reliant on active connections, then there is certainly a need for global coverage for connected car services. There is already an established solution for use cases like this, the Global SIM.

Security & Privacy

Unfortunately, connectivity brings some risks with it. Like other conventional software, software used in cars will be exploited in one or the other way especially if you consider the large number of cars shipped all around the world. This makes OTAs (Over the Air updates) indispensable. The automotive industry will have to transform from pure manufacturing to software companies as well, to prevent users/drivers from the dangers of manipulation and hacking.

But not only manipulated or hacked cars could harm the end user. Users have to acknowledge, that all the data the thousands of sensors and connections generate, not only improve their driving experience but could be used in a way they would not agree to if they would´ve been aware of it. Drivers who like to go a little bit faster than allowed may be confronted with a termination of their insurance policy. Tracking of one´s interests can expand from the internet to certain areas or businesses the user is visiting more often than others. The result could be an, even more improved targeting profile that advertising companies can and will use.


The market of connected Cars is expected to grow by 270% until 2022, Counterpoint Research estimates that until then more than 125 Million Connected Cars will be shipped to customers.
For a better understanding, we find it useful to view the market growths of Connected Cars 1.0 and 2.0 separately.
Connected Cars 1.0 will see an increased market due to several reasons:
eCall – the European Union obligated the Automobile industry to integrate an automated emergency call into all new car models from March 31 2018
• The massive growth of China´s car market
Connected Car 2.0
Expectations are, that Connected Cars 2.0 as we´ve defined it before, will be introduced to the public not until 2020 when the first commercial 5G networks will be launched because of the huge amount of data those Cars will generate. Research shows that in 2022 5G networks should be broadly available which will further increase the amount of Connected Cars 2.0 The establishment of Connected Car 2.0 is an important milestone of autonomous driving.