The electric vehicle (EV) market in Asia Pacific (APAC) leads the world today but is up against challenges. With production and shipment numbers slowing down throughout the region in 2024, personalized services can be the engine that sustains APAC’s EV economy and powers it forward.
APAC continues to be the world’s leader in EV uptake, with record EV sales levels recorded in 2023 and comprising over 50% of the overall global market size. But sales and shipments did slow down somewhat in 2024.
The slowdown has been due to a range of factors throughout the region. While China’s EV sales remain robust, Japan saw sales drop 8% due to production disruptions from certification issues. Korea’s sales fell 7%, impacted by the termination of an EV-specific tax incentive plus high domestic interest rates. EV sales in ASEAN were affected by higher financing costs, increasing household debt, and tightening credit availability. What is the EV industry to do? Personalized services can offer a road ahead.
The changing nature of the connected vehicle consumer
Improved connectivity will play a crucial role in powering EV sales. Innovations in EVs are changing consumer sentiment: compared to traditional internal combustion engine (ICE) vehicles, EVs have redesigned the modern vehicle and the driving experience. Traditional instrument clusters and gear shifters are replaced with large tablets that control every aspect of the vehicle. Want to switch on your air conditioning on a hot day to cool your vehicle before you get to it in the car park? Your personalized mobile app can do that for you. Now, consumers see the connected car as a lifestyle accessory – effectively a smartphone on wheels. You might have heard of the car referred to as the third living space, where people spend time between the office and home. It’s something that’s becoming an accepted norm.
Consumers want this shift. They want more than just a car that is environmentally friendly; they want a vehicle that gives them a truly connected experience with the same kinds of personalized services and features they get everywhere else in daily life. According to McKinsey, 55% of consumers in China say they are willing to change automotive brands if it means they get better services. Similarly, Deloitte found that consumers in India, China, and Southeast Asia are also more willing to pay for connected services compared to consumers surveyed in the United States, Japan, and Germany.
Improved connected services
Connected services continue to grow in scope and variety. Services that positively impact the driving experience itself are essential, such as real-time navigation that offers real-time traffic updates, rerouting options, and points of interest along the routes. Advanced driver assistance systems (ADAS) is another, offering adaptive cruise control, lane-keeping assist, and automatic emergency braking to enhance safety and driving comfort on car journeys.
Safety and security are imperatives, where remote vehicle management allow drivers to control and monitor vehicles remotely through smartphone apps, with options like locking/unlocking, checking fuel levels, and starting the engine from outside the vehicle. Connected vehicles should also offer instant access to emergency services, stolen vehicle tracking, and real-time vehicle diagnostics to help keep the vehicle, driver, and passengers safe. Vehicle-to-everything (V2X) communication, which connects cars to other vehicles and infrastructure, can improve traffic flow, reduce accidents, and even identify potholes.
Then there is the smartphone and personalization angle. In-vehicle infotainment must allow passengers to seamlessly stream music, podcasts, and videos from all their favorite apps like YouTube, Spotify, and others. The vehicle also needs to provide customized user profiles that remember seat positions, climate settings, and infotainment preferences for each user. All those apps and services need to be constantly apprised using over-the-air (OTA) updates to keep up with the latest software upgrades and new features without the need to visit service centers.
Moving forward, we will see a shift towards the software-defined vehicle, where the car will evolve from a static, hardware-defined product to an upgradeable, platform-based mobility solution that’s defined by its software. That will mean vehicles are able to offer higher automated driving functionality, more advanced human-machine interfaces (HMIs) like AI-powered virtual assistants, and potentially enhanced driver services like smart access and virtual reality heads-up displays. Infotainment will be increasingly personalized and can move anywhere with you. The flexible, scalable nature of the software-defined vehicle will enable faster development and integration of new services and features along the vehicle’s lifecycle, via the cloud.
It all needs connectivity
None of these next-generation services can function without fast, reliable connectivity. Connectivity is the bridge that enables in-vehicle services that mirror the consumer’s digital lifestyle and is crucial to enabling the seamless transition from “at-home” to “in-vehicle.” It is the common thread that runs -through the web of complex challenges that can be tackled head-on through the value-add we can bring to the local providers in their home markets.
By having the right partner in the right places to work with, auto manufacturers will be empowered with the connectivity they need to power ahead and enable sales in both local and wider, global markets. Offering precisely that enablement, Orange Business cooperates with the world’s leading auto manufacturers to unlock the potential of connected cars with the global connectivity they need to connect and sell cars not just in APAC, but everywhere in the world. We are distinct in that we’re able to be the essential link between the smartphone, auto manufacturer, and infrastructure – our global network coverage is underpinned by the local-level teams of experts present in local countries to support manufacturers’ activities and expansion plans.
So, while there might have been a slowdown in overall EV sales, make no mistake - connectivity will drive the industry forward. According to GlobalData, the APAC connected vehicle technologies market will grow at a CAGR of more than 4% from now to 2028, while McKinsey projects that by 2030, 95% of newly sold vehicles worldwide will be connected, up from around 50% today. Along with the need for personalized customer relationships and elevated experiential services, connectivity is clearly the third driving force that will power the future of connected cars and EV growth and sales in coming years throughout APAC and the wider global landscape.
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