The next big act for telematics in automotive

By Dean Pratt

Telematics is paving the way for major advancements in the automotive industry, ranging from vehicle design and supply chain efficiency to driver safety.

The market size is already valued at US$79 billion and is projected to reach US$170 billion by 2032.¹ As the technology evolves, it holds the promise of making driving experiences safer, more dependable and deeply integrated with the digital world.

Let’s explore some of the most promising applications of telematics in the automotive industry and four steps companies can take to prepare for telematics at scale.

Telematics for vehicle design and production lines

Edge data gathered from IoT sensors and telematics is reshaping how manufacturers design and build vehicles. Engineers can already use data insights into how a supplier’s steel maintains integrity under real-world conditions and incidents in different cars or trucks to determine if steel sourced from a particular vendor will perform as expected.

What’s ahead
We can expect more production lines to be completely virtualized as richer telematics data is delivered from enabled devices, enhancing the accuracy of digital twins for manufacturing systems.² Predictive AI models will eventually be used for automated machine maintenance, cost assessments and order planning, as well as production facility redesigns. This application model has been used in mechanical designs for vehicles, robotics and other architectural use cases.³

Telematics for supply chain and fleet management

Telematics data provides real-time visibility into supply chains, allowing automotive manufacturers to address bottlenecks and other issues before they disrupt deliveries and jeopardize production timelines.⁴

For instance, manufacturers can use real-time telematics and edge device data with fleet management or asset tracking software to help monitor the location of pallets and receivables that often get misplaced. Automotive companies can also digitally track vehicles as they’re transported from the production line to staging areas, improving efficiency and reducing errors in the shipping process.

What’s ahead
Fleet management solutions will broadly incorporate AI with telematics to route and reroute delivery vehicles autonomously, which may lead to substantial annual savings.⁵ These applications will often involve a broader integration of cameras, IoT sensors, fleet management and supply chain databases, which is a current focus across many industries.

Telematics for driver testing and training

Driving schools and training programs can incorporate telematics into their curricula to provide scenario-based simulation lessons. This practice allows a class of students from different locations to observe safe driving practices using telematics data. Students can also use interactive dashboards, augmented reality (AR) and virtual reality (VR) to diagnose vehicle issues and receive real-time guidance from instructors.

What’s ahead
Automotive manufacturers will continue to use telematics data for a variety of testing and training purposes, including:

• Gaining deeper insights into onsite or remote testing
• Creating predictive models for vehicle integrity
• Training employees virtually
• Running simulations to improve crash-test safety

These applications will open more business opportunities and process refinements that were previously unattainable.

Telematics for improved driver safety

Proactive telematics solutions embedded in vehicles can alert drivers if they swerve, detect drowsiness using vision AI models, and even provide a route to the nearest hospital, police station or service center in case of an emergency. These advancements have been and will continue to be paramount for reducing risks on the road.

What’s ahead
As telematics matures, smart cars will continue tapping into IoT sensors and devices that connect vehicles to cities and smart traffic technologies. Long-term goals like public traffic routing to reduce accidents and instant options for notifying medical help in the event of an incident are additional ways telematics can deliver better experiences for customers.

Meanwhile, insurance companies are increasingly using telematics data to offer more precise rates based on individual driving behaviors.⁶ This approach aims to encourage safer driving practices and can lead to lower rates for safe drivers.

4 steps to prepare your company for telematics at scale

To unlock the full potential of telematics in the automotive industry, scaling is crucial. Here are four things manufacturers should do to prepare:

1. Outline your company’s goals for the next five years, focusing on the future IT landscape, lifestyle changes, projected return on investment and total cost of ownership, and AI advancements. Assess the data you currently have and project what you’ll need in the future. Based on your findings, estimate the effort and deadlines needed to meet your 10-year milestones, considering cloud strategies and strategic partnerships for each goal.
2. Build an adaptable data foundation that can accommodate both new and existing data sources like telematics. Use a standard template that simplifies the process of integrating applications across your business. This setup should manage new information efficiently, with role-based access and proper versioning. Remember to include various data types like images, videos and text to meet different needs.
3. Create a data warehouse for each department and fill it with data that’s been processed, versioned and redacted appropriately. Establish a refined approval process for adding new data sources based on each application’s requirements. Having a repository of clean data is crucial to avoiding delays when bringing new innovations to market.
4. Stay abreast of advances in technology, including analog, quantum and neuromorphic computing. These technologies, coupled with AI, will revolutionize how companies do business, so you’ll need to adjust your telematics strategy accordingly.

The future outlook for telematics in automotive

The future is filled with technological advances that will revolutionize how we travel, communicate and interact with the world around us. Telematics will remain at the forefront of these advances throughout the automotive industry, reshaping how organizations design, build and deliver vehicles all while redefining the customer experience.

Dean Pratt is Associate Director and Customer Technology Advisor for Kyndryl.

¹ Vehicle telematics market size, share and industry analysis, Fortune Business Insights, June 2024
² The digital twin advantage in automotive manufacturing systems, ISACA, July 2023
³ Toyota Research Institute unveils new generative AI technique for vehicle design, Toyota, June 2023
⁴ Ford is increasing telematic data sharing in vehicle logistics, Automotive Logistics, June 2024
⁵ Walmart letting businesses tap into its route optimization tech, Supply Chain Dive, April 2024
⁶ Telematics updates are transforming auto, Insurance Thought Leadership, February 2023