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Global trends in the connected vehicle spacePrepared for the October 3rd, 2016 McCarthy Tetrault lunch and learn
Our Expertise
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Connected Autonomous Secure
infotainment apps | remote servicescar IoT | contextualization | telematics
sensors | advanced driver assistancedriver monitoring | V2X
cyber security | anti-theft | risk assessments | countermeasures
Our services
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trackers | forecast | guidesnews | insights | surveys
performance | usability | engagementfunctionality | security | safety |
tech selection | business modelsdue diligence | market positioning
Intelligence Evaluation Strategy
Why connect the car?The reasons have changed over time
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UBI Services
LBS Advertising
In-vehicle Apps
3rd party data sale
In-vehicle IHU features
Telematics subscriptions
Early OEM objectives for connectivity
New OEM objectives for connectivity
Dealership referrals
Recall management
Usage-based CRM
Design optimization
Warranty analysis
Redundancy optimization
Remote SW updates
$50Cost-saving per
SW update
5.7%Additional customer loyalty
derived from satisfaction with infotainment
Consumer attitude to the connected carSBD survey of 1,000 customers (mix of 50% premium and 50% volume brands)
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Connected car ecosystem
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Cloud Services & Partners (V2C)
V2X
InfotainmentService Scheduling
Parking InfoTraffic Info UBI
Core Telematics Partners
Tier 1
Data Storage
TSPWeb and App
Dev
Embedded Modem
Antenna
HMI
V2XDSRC
Distributor
Factory
Dealer
OEM Operations
V2V
V2I
V2G
V2B/P
Android Auto CarPlay
Analytics
MNO
IOT
Smartwatch Smart house Smart health
Connected car ecosystem – Personal data
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Cloud Services & Partners (V2C)
V2X
InfotainmentService Scheduling
Parking InfoTraffic Info UBI
Core Telematics Partners
Tier 1
Data Storage
TSPWeb and App
Dev
Embedded Modem
Antenna
HMI
V2XDSRC
Distributor
Factory
Dealer
OEM Operations
V2V
V2I
V2G
V2B/P
Android Auto CarPlay
Analytics
MNO
IOT
Smartwatch Smart house Smart health
User ID IP Address
Name VIN
Establishing customer confidenceHow transparent are OEMs with their programmes?
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After reviewing regulations in the largest automotive markets by volume, SBD listed the requirements required to launch a truly global strategy.
The T&Cs of six connected car services were then reviewed to see if sufficient transparency was provided to explicitly comply with these requirements. Android 6.0’s T&Cs were also reviewed to compare the connected car to the smartphone. Though these organizations might have the capability to comply, no reassurance is given to the customer (or data subject) at the point of initial consent.
The transparency of data use matters (e.g. Germany blocking Facebook to use What’s App data).
Source: SBD report: “Big Data 2015 – Preparing for Third Party Use Cases (613)”
OEM 1UK
OEM 1USA
OEM 2US
OEM 2UK
OEM 3 US
OEM 3 EU
Growing challenges of connecting the carThe EU shaping global connected car development?
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EU General Data Protection Regulation (GDPR)The EU’s GDPR is set to come into effect in March 2018 with a strong focus on the protection of personal data. When this occurs it will redefine “personal data” in much broader terms and will require changes to connected vehicle terms and conditions, providing greater transparency and clarity for customers as to what data the vehicle shares with the cloud, as well as which specific business cases they drive.
EU eCall MandateEvery new type-approved vehicle sold in Europe will require an embedded eCall system starting in March 2018. This means that every new model sold in Europe that is type approved after this date will become a connected car. It is highly anticipated that OEMs will leverage the eCall module to supply additional services to the vehicle in an effort to receive a return on their investment in the hardware.
Data PortabilityTrade organizations such as the FIA have been pushing for greater transparency in connected car data and to let the customer decide who handles their connected car data. Their “My Car My Data” campaign has led to an industry group, the ACEA, publishing a manifesto in response, outlining the conditions for OEMs passing connected car data to third parties who want to replace them as the core service provider.
Apple and GoogleDisruption, contribution or noise?
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• Though popular with many customers, most OEMs are reluctant to offer Google and Apple a greater presence within the car for fear of lack of control in the data flow and the HMI customer experience being too different from the OEM’s brand experience.
• As consumer awareness of screen duplication services grows, and ‘Digital Natives’ reach car buying age, penetration of these services is set to reach much higher levels.
• Apple will improve their contextual services to compete with Google’s dominance in this area.
• Only the largest car makers are likely to have the resources to truly compete with the growing level of sophistication that the CE giants are applying to AI use cases.
• Google have made clear their intent to embed the Android OS in the car, starting with Android N. Google is likely offer of an ‘autonomous platform’ to car makers, possibly on a licensing model
• Apple’s Project Titan has been thought to have incurred notable lay-offs, but the recent rumours (denied by both parties) of their discussions to acquire McLaren Technologies has created additional speculation
TeslaRisk takers
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• Autopilot is a beta-level software; the disclaimer and consent point appears only once meaning that subsequent drivers may be unaware of the maturity level of the solution
• Their customers are more comfortable sharing their data than other brands• Tesla has been open and even aggressive in using car data to counter claims by the media• Their up-sell model (autonomous, extended range, ludicrous mode), allows functional improvements to an existing car,
something others could follow• Much will depend on their ability to produce the volume of cars pledged by 2018
Source: Tesla blog
Mobility servicesGenerally false starts and limited successes
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Mobility services have seen mixed success. In some cases, such as Car2Go, there is success in Toronto and Vancouver, but it struggles in other areas (e.g. ceased operations in the UK, Copenhagen, Miami) making it challenging to deploy a regional, let alone global, service. Even Uber recently pulled out of China, showing that even giants are susceptible to regional demands.
Source: SBD report: “Automotive Mobility - Preparing the Connected Car for Mobility Solutions (615)”
Personal data and shared vehicles• For personal cars, OEMs have no guaranteed way to
know when a vehicle changes hands, keeping services active without the new data subject’s consent
• This is an even more prevalent concern with shared vehicles
• How big of a concern is it that shared vehicles display previous users’ navigation destinations and other synced data?
• The challenge of providing a personalized and contextualized in-vehicle experience without jeopardizing personal data
• Screen duplication solutions is one possible answer
Autonomous carsNo OEM has launched an SAE level 3 solution to date, connectivity is critical
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2017: SAE Level 3 - Supervised Autonomous Driving
• Low speed Traffic Jam Assist• Autonomous Parking
2020: SAE Level 3 - Supervised Autonomous Driving
• Motorway Assist• Remote Parking
Mid 2020: SAE Level 4 - Unsupervised Autonomous Driving
• Motorway Cruising
2030-40: SAE Level 4 - Unsupervised Autonomous Driving
• Urban Cruising
When can we expect higher level automation in the market?To realise such vehicles, the industry is being driven to intensify collaborations and
acquisitions. Since early 2015 this development has been driving many cross-industry partnerships between automakers, suppliers, software giants, technology start-ups, ride-sharing companies and many others. Some of these partnerships are looking to develop new solutions, to support delivering autonomous vehicles. The main developments are mentioned below:
• Tri-vision solution• Multi-megapixel cameras• New long-range laser - expected to be launched in the near future (e.g. 2017 Audi A8);
many companies are currently working towards an automotive-grade long range laser• Centralised ADAS ECU and sensor fusion scheme• Real-time high definition maps• Potential introduction of 79GHz radar• Developments in image processing techniques (Artificial Intelligence including Deep
Learning) • Long term plan to potentially introduce DSRC-based V2X • More advanced driver monitoring solutions (direct measurement of driver’s status)
Connected car forecastMore connected cars mean more data, more relationships and more scrutiny
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2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Embedded 20% 23% 26% 30% 34% 38% 43% 47% 51% 55% 59%Tethered 12% 15% 15% 14% 12% 12% 10% 8% 7% 5% 0%Smartphone 18% 20% 25% 30% 34% 43% 48% 53% 59% 64% 69%
0%20%40%60%80%
100%
Pene
tratio
n Penetration
There are strong indications that OEMs will continue to embed connectivity in vehicles, though when considering evolving business models, data concerns and consumer confidence in the technology it will continue to be an uphill battle.
Key areas that have not been central to vehicle development, such as data privacy laws, will play a major role in how services are developed, deployed and maintained.
Source: SBD 2016 Connected Car Forecast10 years eCall & diagnostics as standard
3 to 4 years
3 years
Nothing (EU)
eCall & diagnostics as standard
2010
2016
5 years Remote & diagnostics as standard
6 months20102016
20102016
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The largest team of in-car technology specialists recruited from over 10 OEMs & suppliers
To be the world-leading knowledge partner for the automotive industry
Model-level databases
Technology forecasts
Supplier intelligence
Market regulations
News analysis
Expert UX testing
Consumer UX testing
Iterative prototype evaluation
KPI setting
Cyber security testing
New market entry support
RFP/RFQ management
M&A due diligence
Strategic workshops
Supplier positioning support
90% of OEMs
65% of Tier-1s
60% of Service Providers
SBD NA(Michigan, USA)
SBD EU(Milton Keynes, UK)
SBD Japan(Nagoya, Japan)
SBD India(Bangalore, India)
Jeffrey Hannah
Director, North [email protected]
734-883-3417
We are committed to adapting to our client’s needs and always strive for the highest quality of service
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About SBD
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McCarthy Tétrault LLP / mccarthy.ca
The Connected Car:Managing Legal Liability
George S. TakachMcCarthy TétraultOct. 3, 2016
DOCS #15963400
McCarthy Tétrault LLP / mccarthy.ca
A Complex Connected VehicleEco-System− OEMS− Safety Regulators− Dealers− Owners− E-System Suppliers− E-Service Suppliers− Law Enforcement− Privacy Regulators− Insurers
DOCS #15963400
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McCarthy Tétrault LLP / mccarthy.ca
The OEM’s Connected Car Legal Agenda1. Collaboration Agreements
− IP ownership/licensing− data ownership/licensing
2. Tax planning− e-commerce tax vis-à-vis the owner− cross border
3. Privacy policy updates− including, internal data breach policy (need to make S-4 compliant)− consent at point of sale of the vehicle− consent at point of subscription to the new service
4. Cybersecurity compliance5. Contract formation with the Owner
− privacy consent− liability communication
6. Consumer Protection Regulation compliance7. Insurance
DOCS #15963400
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McCarthy Tétrault LLP / mccarthy.ca
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DOCS #15963400