According to McKinsey, cars generate approximately 25 gigabytes of data per hour. As automotive technology advances, from electric cars to self-driving cars, the data that cars generate presents a multi-billion dollar opportunity.
The data is captured by many sources connected to the vehicle, including global positioning systems (GPS), sensors, cameras, and engine control units (ECUs). An electronic control unit, for example, is a system embedded in automotive electronics that controls one or more electrical systems or subsystems in a vehicle.
This is also a topic identified by Nick Jordan, CEO of data commerce platform Narrative. Jordan says digital magazine Automakers are “developing their business to think of it as a data-collection mechanism.”
However, he also adds that the real value, however, lies in understanding how this data is used. According to Jordan, the car has turned into a modern computer that many use like regular computers.
In terms of the main points of interest, Jordan divided these into three main areas. With these car manufacturers such insights can be applied to new opportunities.
Jordan notes: “Automakers are currently using data for everything from direct data monetization, to providing better in-car experiences to working with external organizations like insurance companies to build a vibrant ecosystem.”
Data equals value
Monetary value is something that changes over time, Jordan says: “As cars develop more sensors and can collect more data, the value goes from $100 over the life of the car to $700, and that runs into billions once tens of millions of cars are hit.” .
Tesla leads the way
Regarding the current market leader, there is only one name that comes to mind, Jordan finds: “One company that has used data effectively is Tesla — their new Full Self Driving or Ludicrous driving styles are based on the driving styles of those specific engines.”
With Tesla cars, the “Ludicrous Speed Upgrade” is an option that cuts the 0-60 mph time to 2.8 seconds, delivering a quarter-mile time of 10.9 seconds.
Despite the three factors mentioned above, Jordan warns the auto sector that some consumers may be wary when hearing their vehicle data being collected.
For this reason, it is important for companies to be transparent about how they use the data collected, by whom, and why. It is also important that companies publish the analyzed data wisely so that they ultimately add value to the customer.