How 5G will disrupt the automotive ecosystem

How 5G will disrupt the automotive ecosystem

Business news |
By Christoph Hammerschmidt

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 rate of the 5G technology will enable the transfer of high-volume 3D digital maps and sensor data. The same high bit rate will allow for more sophisticated infotainment content and increase the number of available information and entertainment offerings, the study projects. Through its very low latency compared to today’s mobile radio technologies, many V2X applications will be implemented on the basis of 5G which in turn will generate benefits such as increased highway capacity, coordinated intersections, automatic parking and less collisions.


The 5G technology will also accelerate the emergence and attractivesness of on-demand transportation services. It will, according to the study, carry a significant contribution to the emergence of “mobility-as-a-service” (Maas) – a shift away from personally owned modes of transportation towards mobility solutions that are consumed as a service. By the same token, this trend will become visible as a shift from conventional modes of ownership of passenger vehicles. S

5G also is one of the enabling technologies for the autonomous car. 5G-enables autonomous vehicles will have significant benefits in industrial and commercial applications. More efficient routing and longer hours of operation should prove beneficial to sectors such as wholesale and retail trade, transportation, logistics and warehousing. Low latency (one of the 5G features) and highly reliable communications will permit unsupervised operation of equipment for longer time and at lower cost. Industry and trade branches like agriculture, construction, mining and quarrying could benefit, the study predicts.

To disseminate and anchor the 5G technology in the mobile infrastructure and, at a higher level, in the entire economy, the study proposes a number of measures. These include speeding the co-installation of fiber and power as part of road repair works, requiring V2X equipment in cars; establishing special lanes and parking spaces for autonomous vehicles; improved location accuracy requirements for calls and data transmission from wireless devices; higher speed limits for autonomous cars, and the release of a sufficient amount of dedicated spectrum for ITS (Intelligent Transportation Services), in particular in the 5.9GHz band.

Related articles:

Autotalks switches to higher gear in V2X chip market

Turning cars into mobile devices

Multi-Gigabit WiFi tested in car racing

AI and cognitive cloud computing to drive autonomous vehicles


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