3 Ways IoT is Revolutionizing the Automotive Industry

Ronald Monte | May 9, 2018

When one thinks of the automobile industry, the Internet of Things (IoT) may not immediately come to mind. For many, automobile manufacturers are part of a slow-moving industry that integrates technology at a deliberate pace far slower than other industries—and perhaps rightly so, with enormous liabilities to the general public and private industries. However, with the innovations of IoT in recent years, the automotive industry is certainly aligning with the technological zeitgeist, promising both safety, convenience, and customization to enhance our lives. 

Consider some of the solutions and possibilities that IoT provides for the automotive industry, including:

Understanding Market Trends 

As more automotive designers are starting to implement IoT technology into their automobile designs, the face of the entire industry is changing. According to a study by Business Insider, 82% of cars out of 94 million, are connected to an IoT type of device; these ‘smart cars’ are set to ship in the year 2021.  BI also notes that 21 million cars were connected to IoT in 2016.  

Let’s face it, IoT smart cars are in and there is no slowing down. According to an article on Mobiloitte.com, a top solution provider in the IoT sector, there is set to be 381 million smart cars that will be connected by 2020. The company is advancing constant connectivity with unique smart apps that aid everyday consumers, and rightfully so: according to their market analysis, IoT exploded to a $348 million in the year 2016, making it a profitable sector for startups and companies that understand these new trends.  

Let’s take a look at 3 ways that IoT is shaping the automotive industry in profound ways, as forward-thinking companies seek to spearhead this transition and bring in a new era of vehicular transport. 

# 1 – A Multi-Billion Dollar Company offers a Transformation in IoT 

Transportation in 2018 is driven by software.  From apps that can predict traffic patterns in real-time to guidance systems that can avoid accidents based on communication between vehicles, the IoT approach is revolutionizing just how people get from one place to another. Automakers are now working hand-in-hand with software developers to create an entire transformation in the automotive industry.  Companies that produce this software, as well as those that help implement these cutting-edge changes are in high-demand. For instance, the consulting group, Deloitte, had a $38.8B dollar revenue in 2017, due in large part to its automotive predictions and in-depth case studies.  This company has also decided to dip into IoT, for the mere fact that IoT is a smart and lucrative niche. 

#2 – A Smart Future 

IoT isn’t only tied into the direct function of the vehicle. It can also act as a way of mitigating driver behavior. Auto insurance companies, like Progressive, Allstate, and State Farm are currently using IoT to monitor drivers’ habits. When IoT is integrated into transportation, third-party insurance companies can gain more insight on the driver. This includes such metrics as the time of the day when the vehicle is driven, the distance traveled per day, speeding and braking habits, and so forth. With this type of information, insurance companies can then base their premiums off of the driver’s habits (known as UBI, or usage-based insurance); this incentivizes the driver to have good driving habits and comply with lawful behavior.  In other words, the better the driving habits, the less money paid out by the insurance companies that seek to mitigate their risk.  With analytical data, money (and lives) can be saved on both ends. 

#3 – IoT Offers a More Convenient Way to Drive

While the automotive industry is undergoing the growing pains of continuous upgrading due to IoT, business owners and consumers need to realize that IoT is just beginning. This type of technological advancement is helpful for both parties and will soon propel businesses and people into a futuristic way of living; a more convenient one, that is. 

The driving force of convenience is ultimately behind IoT’s advancement imperative.  Before GPS maps, people were limited to paper maps; now cars are finally equipped with full navigation systems, among many other tech perks.  The software app world is booming, IoT in the automotive industry creates a smarter way to get around. 

And with this massive implementation of IoT, even automobiles will soon have their own internet Wi-Fi or 4G hotspot. This ability for cars to serve as a connection to the Internet is significant. After all, advertisers can find new ways to reach customers, streaming services like Spotify can be broadcast into vehicles (like a more customized version of traditional radio broadcasting), and even the once-annoying problem of finding a wifi connection for one’s devices are solved. Car manufacturers are taking this feature into account and will soon roll out designs that offer these types of functionality. Of course, in order for this to work, people will need to adapt their own ways of interacting with these new smart vehicles, such as the need for an M2M SIM card


As you may imagine, the IoT is revolutionizing the automotive industry as the tech-savvy 21st century continues to improve nearly every aspect of our lives. Based on data and predictions, businesses and organizations that wish to be part of the next wave of developments in the automotive industry need to start thinking “outside the car” and embrace technology that is disrupting traditionally-held beliefs of a once slow-moving industry.

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