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Shipments of Vehicles with Satellite Connectivity to Reach 30 Million by 2034
October 18, 2024 | ABI ResearchEstimated reading time: 1 minute
The prospect of improving connectivity subscriber retention is driving automotive Original Equipment Manufacturers (OEMs) and their partners to explore satellite connectivity integration into their vehicles to provide drivers with a unique offering. ABI Research, a global technology intelligence firm, forecasts that shipments of vehicles with this technology will reach 30 million by 2034 after entering non-Chinese markets in 2027, growing at a CAGR of 32% in this period. Clear use cases and potential for monetization drive this growth, although several aspects of the ecosystem need to be aligned before deployment is feasible.
“Appetite for satellite connectivity is global, with some Chinese OEMs, such as Geely and BYD, already shipping vehicles with the technology. Providing ubiquitous connectivity to drivers at any location is a value proposition that OEMs have never been capable of before due to limitations in cellular network coverage. It can potentially bring OEMs a reliable after-sales revenue stream,” explains Abu Miah, Research Analyst at ABI Research.
The lack of extensive coverage in the United States, China, and even on main roads in the European Union, (where drivers have no connectivity 12.4% of the time), makes satellite connectivity especially appealing in these regions, which have strong markets for the premium and SUV vehicle segments. Targeting emergency use cases, such as emergency text/call, stolen vehicle tracking, and remote vehicle monitoring, allows drivers to have complete access to these features in the moments when they are most likely to need them – in rural or unfamiliar terrain where cellular infrastructure is also likely to be scarce.
To extract the maximum value from in-vehicle satellite connectivity, the ecosystem must be aligned on the business and revenue model and integrate best practices. “To achieve this, organizations such as the European Space Agency (ESA), 5G Automotive Association (5GAA), and 3G Partnership Project (3GPP) all contribute to standardize connectivity protocols, component design, and accelerate the deployment of this technology into passenger vehicles. Their fruitful collaboration will be the key to unlocking the full value proposition of satellite connectivity,” Miah concludes.
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