Not only from A to B, cars are data collection machines
Tesla car, London. Photo: Tim Sandle.
According to McKinsey, cars generate about 25 gigabytes of data per hour. As automotive technology advances from electric cars to autonomous vehicles, data generated by cars presents a multi-billion dollar opportunity.
Data is captured by many sources connected to the car, including Global Positioning Systems (GPS), sensors, cameras and Engine Control Units (ECU). The ECU, for example, is an onboard system in automotive electronics that controls one or more of a car’s electrical systems or subsystems.
This is also a theme highlighted by Nick Jordan, CEO of data trading platform Narrative. Jordan tells Digital diary that automakers are “evolving their business to see it as a data collection mechanism.”
However, he also adds that the real value, however, is in understanding how to use this data. According to Jordan, the car has become a modern computer, which many use as often as ordinary computers.
Regarding the main points of interest, Jordan divided them into three key areas. With these automakers, this knowledge can be applied to new opportunities.
Jordan points out that: “Automakers are currently using data for everything from directly monetizing data to delivering better in-car experiences and even collaborating with outside organizations such as insurance companies to create a vibrant ecosystem. “.
Data is equal to value
Monetary value is something that changes over time, says Jordan: “As cars develop more sensors and can collect more data, the value goes from $100 over the lifetime of a car to $700, which equals billions when multiplied by tens of millions of cars.
Tesla leads the way
When it comes to the current market leader, there’s only one name that comes to mind, Jordan notes: “One company that has used data effectively is Tesla – their new Full Self Driving modes or Ludicrous are based on the driving habits of those specific drivers.
With Tesla cars, the “ludicrous speed upgrade” is a selection that cuts the 0-60 mph time to 2.8 seconds, delivering a quarter mile of 10.9 seconds.
Despite the above three factors, Jordan warns the auto industry that some consumers may be suspicious when they hear about data being collected on their car.
For this reason, it is important for companies to be transparent about how the collected data is used, by whom and why. It is also important for companies to deploy the analyzed data wisely so that it ultimately brings added value to the customer.