Self-driving cars generate a lot of headlines. But there’s already a new kind of car on the road that’s completely changing the vehicle market.
The connected car is equipped with internet connections and software that allow people to stream music, look up movie times, be alerted of traffic and weather conditions, and even power driving-assistance services such as self-parking.
By 2020, BI Intelligence estimates that 75% of cars shipped globally will be built with the necessary hardware to connect to the internet.
In a new report from BI Intelligence, we take a deep dive into the connected-car market. We size the market for connected cars, determine the average selling price and how it will decline over time, and assess different manufacturers’ approaches.
Here are some of the key takeaways from the report:
The connected-car market is growing at a five-year compound annual growth rate of 45% — 10 times as fast as the overall car market. We expect that 75% of the estimated 92 million cars shipped globally in 2020 will be built with internet-connection hardware.
But of the 220 million total connected cars on the road globally in 2020, we estimate consumers will activate connected services in only 88 million of these vehicles.
Connected-car vehicle prices are out of reach for most car buyers, but they will drop significantly in the next few years. The high average selling price of $55,000 is driven by the fact that connected-car shipments tilt toward the luxury category.