How 5G will disrupt the automotive industry

May 11, 2017 // By Christoph Hammerschmidt
If a study from the University of Berkeley is right, the introduction of 5G mobile radio technology will fundamentally change the automotive value chain. The study, based on economic projections from IHS Markit and funded by chipmaker Qualcomm, shows which segments are particularly affected and identifies measures to speed the acceptance of the 5G technology.

The impact of the 5G technology to the automotive ecosystem will be fundamental; its shock waves will not only cause massive changes to the products of the automotive industry – the cars – but also to the ecosystem around the cars from suppliers (including the semiconductor industry) to usage models. Between 2020 and 2035, the 5G technology will have an impact to the global economy that will be roughly equivalent to adding an economy the size of India to the present global economy, writes study author David Teece. Numerical, 5G will enable more than $2.4 trillion in total economic output across the automotive sector and the related ecosystem (see Fig. 1). Of this sum, about $470 billion will be attributable to the automotive vertical itself; another $506 billion to the tier one suppliers and the extended automotive supply chain. The remainder – a handsome amount of $1.44 trillion – will be associated to the customers, the car users and the new business models they will establish.


The automotive ecosystem will experience a massive impact
through the introcuction of the 5G wireless technology

In turn, the economic impact of 5G to the automotive sector represents about 20% of the total global economic impact, projected by HIS to be $12.3 trillion in 2035.

With respect to the automotive value ecosystem, 5G will help increase productivity and sales value, improve user experience and environmental quality, the study says. In addition, it will help reducing accidents and fatality rates – for instance through applications like V2X that can alert drivers of traffic-related hazards before he actually can see them himself. In addition, 5G will likely transform conventional modes of car usage and transportation itself. The 5G-enabled evolution of the Connected Car will provide opportunities and challenges for the traditional automotive sector as well as for software and technology vendors and content developers.

 

Examples for new or enhanced applications are numerous. The high bit