Analysts at Pike Research are bullish about the incorporation of telematics into electric vehicles over the next five years. Pike released “Electric Vehicle Telematics” last week, a report that anticipates an EV telematics niche worth $1.4 billion in global sales by 2017. Telematics refer to electronics and communications devices that connect EVs to utility firms, municipalities and wireless devices. The presence of basic telematics in luxury cars and hybrids as well as public initiatives to create smart grids drive Pike’s optimistic estimate.
“Electric Vehicle Telematics” reached this conclusion using metrics like average revenue per user and market concentration. Analysts note that 90% of plug-in vehicles sold in 2011 featured basic telematics. This number should grow to 94% of vehicles sold per year by 2017. Pike Research cites a projected 80% of plug-in EVs with advanced telematics systems as the prime mover in the market. Automakers and telematics manufacturers should benefit greatly from this growing market with an average revenue per user (ARPU) of $13.27 by 2017. This ARPU estimate compares favorably to the 2011 figure of $10.65.
Pike Research notes that the EV telematics market should be pushed by four industrial sectors working toward a common goal. The auto industry will push for greater adoption of telematics to increase profits from green vehicle sales. Manufacturers of telematics hardware and software could vault from niche to mainstream in five years if Pike’s estimates come to fruition. “Electric Vehicle Telematics” indicates that these manufacturers need to develop telematics that last a decade rather than a few years to accommodate vehicle buyers. Another industry that should push telematics to the fore is the wireless communications industry that offers call centers and communications infrastructure.
The emergence of a strong EV telematics market should compound the benefits of green vehicle use. An EV driver with access to traffic reports, maps and routing information can commute more efficiently while increasing safety. Utilities and municipalities can use more sophisticated telematics to reroute drivers to charging stations or roadways with little traffic. Advancements in EV telematics allow drivers to network with each other and communicate with emergency service providers. The primary issue facing automakers entering the telematics market is avoiding the temptation to overprice these products. Pike Research’s report should encourage municipalities, utilities and automakers to unite behind affordable telematics options for consumers.