In the second quarter (Q2) of this year, the penetration of connected cars surpassed that of non-connected cars for the first time ever globally. Sales of 5G-ready vehicles surpassed 500,000, but 4G still made up 90% of all connected vehicle sales.
“In the first quarter of this year, sales of connected cars in the US market lagged behind those in China. However, the US overtook China as a result of Covid-19’s resurgence and plant closures in China starting in March” Soumen Mandal, a senior analyst, said The report claims that automakers are putting a lot of effort into using potent on-board computers for next-generation connected mobility.
“90% of shipments of connected cars worldwide were made up of 4G vehicles in Q2 2022, with only 7% of those being 5G vehicles. Even though 5G’s market share will keep growing, 4G will experience yearly sales growth until 2027” said Peter Richardson, vice president of research. As automakers prefer to upgrade their portfolio with factory-fitted embedded connectivity even in base model variants, the number of non-connected cars has been steadily declining.
Even before the initial push towards connected vehicles came from government mandates like eCall, luxury brands like BMW, Mercedes, and Audi were the first to introduce connected cars with inbuilt Wi-Fi. The proliferation of 5G for cars is reportedly being hampered by a number of factors, including expensive 5G NAD/TCU and patchy network coverage even in areas where 5G has already been introduced. This results in a limited supply of 5G-capable vehicles.
Furthermore, the adoption of ADAS/AD levels is still in its infancy. There are currently very few Level 3 capable models, and they are all 4G. “We anticipate that 5G connectivity will only be widely adopted after 2025 when the majority of these issues will have been resolved,” Richardson said.
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