According to McKinsey, global revenue from car data monetization will grow to between 450 and 750 USD by 2023.
According to McKinsey, global revenue from car data monetization will grow to between 450 and 750 USD by 2023.
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Car Data Is there too much data going in and out of cars?

Author / Editor: Jamie Thomson / Erika Granath

According to McKinsey, global revenue from car data monetization will grow to between $450 - $750 billion by 2030. Needless to say, car data is big business, but is there too much of it going in and out of our cars?

You’d be forgiven for thinking that travelling in a car provides you with more privacy than public transport, but this isn’t necessarily the case. Today’s connected cars produce vast amounts of data that’s incredibly valuable to automakers and third-parties.

Data about how far we travel and how many trips we make can help manufacturers identify faults in our vehicles and plan maintenance. However, drivers are often unaware of just how much of their information is being collected.

For an overview of how connected vehicles work, take a look at our article on the current state of connected, autonomous, shared, and electric mobility.

Now, let’s dive deeper into how much data our vehicles collect about us.

What is car data used for?

Currently, the most common use of car data is to improve the driving experience. It can be used to increase your comfort as a driver to and provide you with up-to-date information on the nearest filling stations.

It can also be used to contribute to road safety and environmental goals. For example, connected cars can match your current speed with the speed limit on a particular stretch of road and alert you if you’re driving too fast. It can also be used to reduce your fuel consumption by indicating when to change gears.

It can advise you of the quickest and easiest routes using live traffic information, enable you to pay for parking and tolls automatically, and even enable insurance companies to provide you with tailored premiums using telematic technology.

How is the data collected?

Today’s connected cars have sensors and cameras that monitor and track their surroundings. Vehicle sensors are connected to various different components inside the car and can provide information on which parts require maintenance or replacement.

Cameras in cars are typically used to tell us how to park, but they can also monitor how many vehicles or pedestrians are in front of the vehicle. For example, they can be used to analyse breaking distances and provide the driver with an alert if they’re driving too close to an object.

Car data and privacy

McKinsey reports that a car can generate approximately 25 gigabytes of data every hour and as much as 4,000 gigabytes a day. But who owns all this data? Well, according to the European Union, car owners do, and that data is subject to data privacy laws under the EU’s General Data Protection Regulations (GDPR).

Data privacy is becoming a hot topic in the automotive industry as privacy-aware customers want to know how their data is being used. As a way of making sure that automakers abide by the same code of conduct, the recently merged Auto Alliance (now Alliance for Automotive Innovation) established voluntary Privacy Protection Principles to protect personal information collected through in-car technologies. Before the organisation merged with Global Automakers, twenty automakers had signed up.

As with all things data, security is always a concern and the Fédération Internationale de l'Automobile (FIA) wants automakers to make their data secure and to provide drivers with the option of blocking the processing of non-essential data.

Although monetizing car data is still in its infancy, it’s likely that automakers will want to sell drivers’ data in the future to third-party services like music streaming and traffic monitoring companies. In a previous article, we looked at how car data from in-car communication can create huge opportunity for new revenue models.

Third-party use of car data

Automakers are required to abide by GDPR and as such, they need to take reasonable security measures to safeguard data. GDPR currently distinguishes between data that provides personally identifiable information (PII) and data that’s used for customer intelligence. Inevitably, overlap exists in regards to what information automakers can collect.

Closing thoughts

GDPR doesn’t prevent automakers from collecting car data, but they do need to have a driver’s permission before doing so, which puts restrictions on what data they can collect and how they can use it. Even if a driver gives permission for their data to be collected, they can still request that the information is deleted at any point.

Closing thoughts

As more connected cars take to our roads and with the development of autonomous vehicles, car data will become ever-more valuable. The question of whether there’s too much car data being collected can only really be answered in relation to how the data is being collected and what it’s being used for.

Data privacy will always be a hot issue in the automotive industry and drivers need to be made aware of what data they’re handing over to companies. As the value of car data continues to grow, an immediate focus needs to be placed on cybersecurity to prevent hackers gaining unauthorized access to information.