Connectivity’s expansion yields security concerns
Connectivity brings several benefits to consumers while bringing solid revenues to OEMs. Both sides of that equation require a strong focus on cybersecurity, which is becoming one of the industry’s major design concerns.
Telematics is rapidly moving into the mainstream, bringing the promise of significant new revenue streams. Gartner Inc. predicted that connected vehicle sales will spiral upward from 12.4 million units in 2016 to 61 million vehicles in 2020. MarketsandMarkets predicted connected car revenues will triple by 2025, hitting $219 billion versus $73 billion in 2017.
Both automotive OEMs and service providers are ramping up efforts to pick up their portion of that new revenue. Anecdotal evidence mentioned during the SAE’s recent WCX 18 conference in Detroit supported the huge potential growth opportunities with services that will help companies build their brand perception.
“We’ve talked with some companies that plan to earn billions of dollars over the next few years,” said Andrew Till, Vice President of Technology at Harman Connected Services. “Data will not only drive revenue, it will also drive engagements with customers in ways that OEMs never imagined.”
Connectivity will help a broad range of companies create new revenue streams. Factory-installed telematics will be a major boon for insurance companies, who have struggled to get customers signed up for programs that use actual driving data to establish pricing models.
“Insurance companies want connectivity to provide deeper insight into how they can set rates, but that has been held back largely because today they use dongles,” said Andreas Hecht, General Manager of CCC Information’s OEM business unit. “A lot of people don’t know how to plug dongles in; they’re very cumbersome. With telematics, that can be more transparent and easier to implement.”
For all these technologies to gain customer acceptance, they must be trusted by consumers. Security looms as a central factor that will be needed for market growth. The many hacks of major corporations and government agencies demonstrate the difficulty of protecting connected systems from attackers.
Security is a difficult matter for automakers since high reliability is expected. A fatal accident tied to a security breach will have a major impact on consumer sentiments.
Some automotive systems have been protected because they are proprietary, making it difficult for hackers to focus on them. Connectivity requires an adherence to standards, which will make it simpler for criminals to search for vulnerabilities.
Many speakers at a number of WCX presentations suggested that the auto industry will achieve the best security if they use industry-standard tools and techniques. These technologies have been thoroughly tested to resolve any security questions. Some industry watchers have suggested that government regulators need to step in and set rules for the automotive industry. The National Highway Traffic Safety Administration has no plans to become a rule maker for cybersecurity.
“Regulations are too slow of a tool, and they can create a false sense of security,” said Cem Hatipoglu, Director of Electronic Controls Research at NHTSA. “Our goal is to set minimum standards. Do you really want to go with minimum standards for cybersecurity?”
Most security programs are focused on preventing attacks or mitigating the impact that intrusions can have. Maintaining the integrity of vehicular data is also a major issue. A wealth of data will be stored, providing many types of information. Data can tell what happened before accidents and what maintenance was performed, for example. If these files can be altered, their usefulness will vaporize.
“There may be some block chain type of solution that protects the data,” said Peter Brown, Chief Automotive Architect at Wind River Systems Inc. “When you’re talking the life cycle of the vehicle, people need to know that data has not been tampered with. Someone buying a used vehicle would love to have data for everything like oil changes. That could be maintained using block chain technology.”