Is There Too Much Data Going In And Out of The Car?

Depending on whom you talk to, the auto industry is either collecting too much or too little data. It’s gigabytes and terabytes today – it could be petabytes tomorrow. When will it end, or should it end at all? How much really is too much?

“The data that’s being generated by the car is massive right now,” said Chris Wiklund, senior product manager of mobility intelligence at Arity, an insights technology company that was spun out of auto insurer Allstate. His focus is on data acquisition strategy. “But most of the data stays on the car; it’s just not being pulled off.”

There are some key reasons why automakers are ditching data, mainly due to the cost. Not enough cars have embedded modems – adding more is yet another expense to consider. And when they do have the necessary modems, OEMs must grapple with high data transfer fees charged by telecommunications companies. That cost might get passed on to the consumer, but it’s not the same as a cellular phone plan, in which consumers happily pay for data. Automobiles will ultimately require much more data than the average phone consumes each month.

“OEM’s incentive is to not pull all the data off the car,” said Wiklund. He explained that edge processing could allow the data to be processed – and eliminate some of the unnecessary content – right from the car before it’s ever sent to the cloud. Even then questions remain about the validity of all this data being collected. For now, much of the value is still being determined.

“There will always be new use cases that they didn’t know existed,” Wiklund speculated. “Until you can connect that data to a company or industry that’s trying to use it, you won’t even know that there’s value in that data. It’s a massive market requirements challenge. How do you understand what these people need? And then weighing all your different business options of where do I pull the data off first, do I put it in the cloud or process it at the edge? How do I plan on this five-year cycle to support that? That’s the challenge.”

Wiklund hopes that the advent of 5G, hailed as a necessary component of connectivity, mobility and the future of IoT, will reduce the financial burden to OEMs. That would allow automakers to extract more of the car’s crucial data points. In doing so, however, it could eventually bring the cost back to pre-5G levels as the desire for even more data rises. “But it also unlocks new use cases, which helps to substantiate the business model,” Wiklund added.

Those use cases could be essential to OEMs looking to maintain profitable margins. Most corporations aren’t simply looking to turn a profit, however. They want to reduce costs at every turn, believing that a dollar saved is a dollar earned. Could that mean automakers will seek mergers or partnerships with telecommunications companies? “I could see some strategic partnerships happening, where it might not be a buyout but some sort of joint venture,” said Wiklund. “You start to get into regulation when you start to buy those types of companies.”

That being the case, Wiklund thinks it might be smarter for OEMs to negotiate a better contract.