Connected Vehicle Data Monetization: Opportunities and Challenges for OEMs and Partners
The automotive industry is in the midst of a profound transformation. As vehicles become increasingly connected, they generate vast streams of data—unlocking new opportunities for original equipment manufacturers (OEMs) and their partners to create value far beyond the traditional sale. The ability to harness, analyze, and monetize this data is rapidly becoming a key differentiator in a competitive market, enabling new business models, revenue streams, and cross-industry collaborations.
The Expanding Value of Connected Vehicle Data
Modern vehicles are sophisticated digital platforms, equipped with sensors, telematics, and software that continuously collect data on driving behavior, vehicle health, location, and usage patterns. While early monetization efforts focused on subscription-based services—such as remote start, navigation, and entertainment—the true potential lies in leveraging connected vehicle data to create scalable, ecosystem-driven revenue streams.
Key Monetization Use Cases
- 1. Usage-Based Insurance (UBI)
Usage-based insurance is one of the most promising avenues for data monetization. By analyzing telematics data, insurers can offer personalized premiums based on actual driving behavior—rewarding safe drivers and providing flexible, on-demand coverage. OEMs are increasingly partnering with insurance providers to offer these products directly through the vehicle or mobile app, and some are even developing their own insurance offerings. For example, several leading automakers have launched UBI programs, while others bundle insurance with vehicle subscriptions or EV services. As mobility patterns shift toward shared and flexible usage, short-term and on-demand insurance options are also emerging, further expanding the value proposition.
- 2. Predictive Maintenance
Predictive maintenance leverages real-time sensor data to anticipate service needs before breakdowns occur. This proactive approach enhances safety, reduces downtime, and strengthens the relationship between OEMs, dealers, and customers. For fleet operators, predictive maintenance minimizes costly breakdowns and optimizes vehicle utilization. In passenger vehicles, features like tire monitors and smart oil sensors are becoming commonplace, while advanced systems can automatically order parts and schedule service appointments. This not only drives aftersales revenue but also fosters customer loyalty and helps preserve the residual value of leased vehicles.
- 3. Aftersales Service Marketplaces
The connected car is becoming a hub for commerce and services. In-car marketplaces allow drivers and passengers to purchase everything from fuel and parking to entertainment and food, all from the vehicle’s interface. These platforms can deliver personalized offers based on location, preferences, and journey context, creating new monetization opportunities for OEMs and partners. Tailored service recommendations, upgrades, and promotions can be delivered in real time, enhancing the customer experience and driving recurring revenue.
- 4. Partnerships with Finance, Insurance, and Utility Companies
OEMs are increasingly recognizing that the value of connected vehicle data extends well beyond the driver. By building partnerships with finance, insurance, utilities, and aftersales providers, OEMs can create a connected ecosystem that benefits all stakeholders. Finance companies can leverage vehicle location data for asset recovery, and predictive maintenance data to inform warranty and service contract offerings. Utilities and charging networks can use EV data to optimize charging schedules, enable dynamic pricing, and facilitate peer-to-peer charging solutions. These collaborations enable bundled offerings and seamless experiences for customers.
- 5. Data Marketplaces and Cross-Industry Collaboration
Some OEMs are exploring the creation of data marketplaces, licensing anonymized, aggregated vehicle data to third parties such as city planners, fleet operators, or research institutions. While this model presents challenges around data standardization and privacy, it offers a pathway to monetize data at scale and support broader societal goals, such as traffic optimization and urban planning. Ecosystem collaboration is also enabling bundled offerings, such as integrated charging and mobility services for electric fleets.
Overcoming Challenges: Privacy, Standardization, and Trust
While the opportunities are vast, OEMs face several challenges in monetizing connected vehicle data:
- Consumer Privacy and Trust: Customers are increasingly aware of how their data is used. OEMs must be transparent, offer opt-in mechanisms, and ensure robust data protection to build and maintain trust. Providing customers with control over their data and demonstrating clear value in exchange for data sharing are essential.
- Data Standardization and Interoperability: The lack of standardized data formats and interfaces can hinder ecosystem development. Industry-wide collaboration on standards is essential to unlock the full value of data sharing and marketplace models. Establishing common data formats and APIs, and working with industry consortia, will be critical.
- Organizational Transformation: Moving from a product-centric to a service-centric, data-driven model demands new skills, agile processes, and a culture of continuous innovation. OEMs must invest in digital capabilities, data infrastructure, and cross-functional teams to realize the full potential of connected services.
Building the Connected Ecosystem: Practical Steps for OEMs
To realize the full potential of connected vehicle data, OEMs must move from isolated technology initiatives to building integrated, cross-industry ecosystems. Key steps include:
- Invest in Telematics and Data Infrastructure: Robust telematics platforms are the foundation for collecting, processing, and securing vehicle data. Over-the-air (OTA) updates, advanced analytics, and machine learning capabilities enable OEMs to deliver new features, predictive maintenance, and personalized experiences at scale.
- Develop Contextual and Predictive Services: By analyzing real-time and historical data, OEMs can offer contextual services—such as location-based offers, dynamic insurance, or tailored content—that enhance the driver experience and open new revenue streams.
- Forge Strategic Partnerships: Collaboration is essential. OEMs should seek partnerships with insurers, finance companies, utilities, and aftersales providers to co-create value-added services. These partnerships can be structured around data sharing, joint product development, or integrated customer journeys.
- Create Data Marketplaces with Standardization: For data marketplaces to succeed, OEMs must address challenges around data quality, standardization, and interoperability. Establishing common data formats and APIs, and working with industry consortia, will be critical to enabling external parties to derive value from connected vehicle data.
- Prioritize Consumer Privacy and Trust: As vehicles become data-rich platforms, consumer trust is paramount. OEMs must implement transparent data governance, obtain clear consent, and provide customers with control over their data. Privacy-by-design principles and compliance with evolving regulations are non-negotiable.
The Road Ahead: From Technology to Tangible Business Outcomes
The next decade will be pivotal for OEMs seeking to transition from product-centric to data-driven, service-oriented businesses. Those who act now—by investing in telematics, forging ecosystem partnerships, and prioritizing data governance—will be best positioned to unlock new revenue streams, enhance customer loyalty, and shape the future of mobility.
Connected vehicle data is not just a technological asset; it is the foundation for a new era of automotive value creation. By moving beyond subscriptions and embracing ecosystem thinking, OEMs can realize the full potential of connected services—for themselves, their partners, and their customers.