Between 80 and 85 percent of telematics solutions and devices that includes infotainment, solutions, and aftermarket solutions cater to the automotive industry.
Between 80 and 85 percent of telematics solutions and devices that includes infotainment, solutions, and aftermarket solutions cater to the automotive industry.
( Source: Public Domain / Unsplash)

Vehicle Telematics Vehicle Telematics: What is it and what are its potential applications?

Author / Editor: Seth Lambert / Florian Richert

As one of the fastest-growing components of the automotive industry, telematics is becoming an increasingly popular subject amongst mobility experts and enthusiasts.

Telematics technology is being increasingly used in the automotive segment for vehicle tracking and monitoring, infotainment, and much more. Between 80 and 85 percent of telematics solutions and devices that includes infotainment, solutions, and aftermarket solutions cater to the automotive industry.
The market is expected to gain impetus from a rise in connected mobility solutions. By 2022, the global telematics industry is forecasted to reach a staggering $233.24 billion.
Although the term telematics appears to be generally well-known, there are few comprehensive explanations of the issue.

In this article, we'll go into the details of what telematics really is and look at the industry's current state of play.

What is vehicle telematics?

The word "telematics" is a broad term, derived from the French word télématique, which itself is a portmanteau of the French words for telecommunications and informatics, or computing science. These days, when you hear the word telematics as it relates to commercial applications, it's implied that it refers to vehicles. Telematics at present includes (but is not limited to):

  • Technology to send, receive and store information
  • Technology that communicates with and controls remote objects
  • Satellite navigation systems integrated with computers and/or mobile devices
  • Telecommunications and informatics systems capable of controlling vehicles in motion

Current examples of telematics systems in cars are:

  • Diagnostic electronics
  • Intelligent electric vehicle (EV) charging controllers and power consumption monitors
  • Global Navigation Satellite Systems (GNSS) receivers
  • Vehicle/trailer/container tracking hardware and software
  • Car safety/warning systems, including eCall (short for Emergency Call) and Automatic Collision Notification (ACN) subsystems
  • Automated driving assistants
  • Onboard concierge services
  • Internet data connections
  • Integrated cellular phones
  • Satellite radio

Today, most telematics information is carried over 2G, 3G and 4G LTE cellular connections to vehicles and over WiFi (specifically, 802.11p), Bluetooth and Ultra-wideband (UWB) wireless networks supporting WAVE (Wireless Access for Vehicular Environments) within and between vehicles and roadside infrastructure. WAVE is designed to interface with and enhance civil Intelligent Transportation Systems (ITS), equipment that will manage traffic and transport networks.

Main advantages of telematics data

One of the main advantages of telematics data is that it's usually "always-on" and can be provided or accessed in near-real-time, delivering immediate and significant value to drivers, fleet owners, private third parties and regulatory authorities. Indeed, telematics is one of the fastest-growing components of the automotive industry as carmakers compete to build more and more smart functionality into their vehicles. Hong Kong-based industry research firm Counterpoint estimates that between 2018 and 2022, 175 million connected vehicles will be shipped worldwide.
Currently, at least half of all cars sold in North America, Europe and Japan integrate telematics to some degree (since April 2018, eCall rapid-response emergency calling services have been required in all new cars sold in the European Union), but premium services beyond basic emergency/roadside assistance are generally not free, and vehicle operator costs can be up to several hundred U.S. dollars or Euros per year.

"Europe's eCall mandate is expected to change the market dynamics with higher penetration across European countries. The adoption of eCall in Europe is expected to create ripples across other geographies, thereby catalyzing the overall car connectivity ecosystem," says Hanish Bhatia, the senior analyst for mobility at research company Counterpoint, Electronics companies owning a significant share of the installed base of Telematic Control Units (TCUs) include LG and Harman International (a subsidiary of Samsung) in South Korea, Bosch and Continental in Germany and Denso in Japan.

Much telematics equipment is shielded within crash-resistant/hacker-resistant TCU "black boxes," which sometimes connect to drivers' smartphones. Often, telematics-equipped vehicles feature roof-, exterior- or display-mounted cellular antennas for increased communication signal strength.

Applications of telematics

At present, the most popular uses of telematics are internet connectivity via mobile devices such as smartphones, intelligent driving navigation/concierge services and vehicular diagnostic/breakdown reporting systems. While there is a long list of other applications of telematics, major ones include:

  • Intelligent fuel location/allocation
  • Local business search/recommendation
  • En route news/weather/traffic updates
  • In-vehicle entertainment
  • Real-time data communications
  • Location reporting/sharing and theft response
  • Wireless safety and hazard alerts
  • Emergency/roadside assistance request systems
  • Vehicle performance measurement
  • Freight trailer/container tracking

More applied uses of telematics fall within the categories of:

Fleet management

Entire fleets of transport vehicles from trucks to vans to cars to ships can be tracked and diagnosed to optimize maintenance, fuel management, driver downtime, safety and financing. This can lower costs and risks inherent in fleet investment, transportation, efficiency, productivity and regulatory compliance.


Services such as Zipcar, Car2Go, Lyft, Uber, etc. presently employ telematics technology to track Pay-as-You-Drive (PAYD) vehicles, bill users and help new customers find empty cars.

Auto insurance

Car sensors and smartphone apps can provide vehicle operation and driver behavior data to insurance companies so they may more accurately judge risks and price insurance for specific vehicles and individuals. This is known as Usage-Based Insurance (UBI), sometimes also known as PAYD Insurance. Factors taken into account can include driving times, routes, distances, speeds, acceleration, braking and other variables. For some drivers willing to supply their telematics data or integrate insurance company hardware or software into their vehicle and/or mobile device, premiums have been reduced by as much as 30 percent.

Anticipated opportunities and challenges

In the future, telematics will integrate additional technologies such as camera, radar and LiDAR (Light Detection and Ranging) environmental sensors and artificial intelligence to enable assisted and autonomous driving. Advanced driverless maneuvering such as complex turning, collision avoidance and/or multiple-vehicle "platooning" (synchronized movements of grouped vehicles) will become possible and likely very common.
The rollout of dedicated 5G cellular channels for use with telematics will happen by 2026; some telematics TCU makers such as Harman are enabling over-the-air (OTA) activation for 5G-capable 4G TCUs being sold or integrated into vehicles now. 5G will bring with it higher speeds, lower network latency and richer/denser connections to telematics systems, resulting in better responsiveness, greater than 1Gb/s data throughput and more powerful applications.
One challenge for companies wanting to build, share and integrate telematics equipment is concerns about the security and privacy of data that's passed on and/or stored (often in the cloud). Encryption is standard for many telematics equipment makers sending or supplying such data to external receivers as well as for connections between internal Electronic Control Units (ECUs) within vehicles. In the European Union, General Data Protection Regulation (GDPR) laws protect individuals' data from collection and processing that's not deemed strictly necessary. To comply with GDPR laws, companies collecting or using telematics data need to develop and spell out clearly defined data protection policies.