The Business of Data: How Automakers Monetize Vehicle Telematics
For automakers, telematics isn't just a customer feature; it's a rapidly growing revenue stream. The data collected from millions of connected vehicles creates immense value, leading to new business models centered around subscription services.
This "recurring revenue" model includes:
Service Subscriptions: Charging monthly fees for features like remote start, live traffic, and concierge services that often expire after a free trial period.
Feature-on-Demand (FoD): Allowing customers to pay to unlock hardware-based features already in the car, such as enhanced performance or advanced driver-assistance functions.
Data Monetization: Aggregating and anonymizing vehicle data to sell to third parties like city planners (for traffic flow analysis), insurance companies, or mapping services.
This shift is pushing automakers to become tech and service companies, with a focus on the entire vehicle lifecycle rather than just the initial sale.
FAQ
Q: Why should I pay a subscription for a feature my car has?A: Automakers argue it helps cover the ongoing costs of connectivity, software development, and cloud services, and allows them to offer more flexible ownership models.
Q: Can I opt out of data collection?A: This varies by manufacturer and region. Privacy policies outline your options, but fully opting out often means losing access to connected services altogether.
The connected car is becoming a platform, and your data and subscriptions are the new currency.