• The US overtook China in Q2 2022 to lead the global connected car market.
• The top five groups – Volkswagen, Toyota, GM, Stellantis and Hyundai – captured half of the market.
• 5G car sales surpassed half a million, though 4G accounted for 90% of connected car sales.

London, San Diego, Buenos Aires, New Delhi, Hong Kong, Beijing, Seoul – September 29, 2022

Global connected car sales* remained flat YoY in Q2 2022 despite ongoing turbulence in the automotive industry, according to the latest research from Counterpoint’s Connected Car Services. The US led followed by China and Europe. The top three regions accounted for nearly 80% of connected car sales in the quarter.

The connected car penetration surpassed that of non-connected cars for the first time ever, capturing almost 50.5% share in Q2. Non-connected cars have been steadily declining as automakers prefer to upgrade their portfolio with factory-fitted embedded connectivity even in base model variants. Luxury brands like BMW, Mercedes and Audi were the first to introduce connected cars with inbuilt Wi-Fi, even before the initial push towards connected vehicles came from government mandates like eCall.

Commenting on the regional dynamics, Senior Analyst Soumen Mandal said, “The US market trailed China in terms of connected car sales in the first quarter of this year. However, with the resurgence of COVID-19 and plant shutdowns in China from March onwards, the US overtook China. China was the first country to introduce 5G cars back in 2020 with models like the Arcfox Alpha-T, Roewe Marvel R and Great Wall Motors Haval HG. Major automakers such as Audi and BMW entered the market in 2021 and 2022 by launching models like the Audi A7L/A6L and BMW iX respectively. Government initiatives along with a push from state-owned telecom operators regarding the deployment of 5G networks have given China the first-mover advantage.”

Mandal added, “Europe, including major countries like Germany, UK and France, saw its overall sales dip in the first half of the year due to persistent problems like the Russia-Ukraine war and supply chain disruptions. However, the region managed to increase its connected car penetration to almost 60% in the second quarter owing to growing connected car technology in the portfolios of incumbent players like Stellantis, Volkswagen, BMW and Mercedes. From a global perspective, Volkswagen, Toyota and General Motors groups lead the market due to large volumes and high connectivity penetration within their portfolios.”

The automotive industry is going through multiple simultaneous transitions such as connected mobility, electrification, autonomous driving, and software-based services. And connectivity is fundamental for all. However, it is creating pressure on supply chains to support these transitions.

Connected cars surpassing non-connected cars is a significant milestone toward achieving success in the automotive industry transformation. Now the use cases of connectivity within cars are expanding from telematic services to becoming more software-centric, delivering features like digital cockpit through to autonomous driving. As a result, automakers are focusing on using powerful on-board computers for next-generation connected mobility. Currently, connected cars typically use a single NAD module to provide infotainment and predictive analytics. But some Chinese brands and luxury automakers are using two NADs in a technology called Dual SIM Dual Active (DSDA) to provide, for example, uninterrupted infotainment to passengers while simultaneously uploading critical vehicle data on to the cloud for analytics.

Keeping the technology evolution in mind, Research Vice-President Peter Richardson added, “4G cars still dominate the global connected car market, capturing 90% of shipments in Q2 2022, whereas 5G cars accounted for around 7%. Although 5G’s share will continue to increase, 4G will see increased sales on a yearly basis until 2027. There are several factors hindering the proliferation of 5G for cars, such as high prices of 5G NAD/TCU, and patchy network coverage even where 5G has been launched, which in turn means limited availability of 5G capable cars. Furthermore, there is only nascent adoption of ADAS/AD levels – currently, there are few Level 3 capable models and all use 4G. We expect that mass adoption of 5G connectivity will only occur after 2025, when most of these issues will have been resolved”.

*Sales here refer to wholesale figures, i.e. deliveries out of factories by respective brands, and consider only passenger cars with embedded connectivity.

For detailed research, refer to the following reports available for subscribing clients and individuals:

• Global Connected Car Tracker: Q1 2019-Q2 2022
• Global Connected Car Forecast: Q1 2019-2026F

Counterpoint tracks and forecasts on a quarterly basis around 50 automakers’ sales in key geographies like China, US, UK, Germany, France, Japan, South Korea, Rest of Europe and Rest of World, and by technology/connectivity - 2G, 3G, 4G and 5G.

Feel free to reach us at [email protected] for questions regarding our latest research and insights.

 Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Peter Richardson

Soumen Mandal

Fahad Siddiqui

Counterpoint Research

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