Today, thanks to the rapid evolution of connected cars and telematics, new vehicles have become a lot like giant, two-tonne smartphones rolling down the road. They’re wirelessly connected to the world around them, pulling in real-time traffic data or streaming music, monitoring driver behaviour for
As a result of all this connectivity, modern cars have about as much in common with the phone in your pocket as they do with the purely analog cars of the 20th century. So, how did we get here?
Early days of telematics
Telematics is simply a method of wirelessly transmitting real-time data over long distances. (No cables needed!) Most histories of the technology trace it back to the Cold War. In the 1960s, the U.S. Department of Defense developed the Global Positioning System (GPS) to keep track of nuclear submarines and other assets in real-time. Today, a large network of GPS satellites are constantly broadcasting signals down to GPS receivers, like the one in your car, or your phone. Using signals from multiple satellites, GPS receivers can then calculate their precise location in real-time. Pretty amazing, right?
The first production car with a built-in GPS navigation system didn’t hit the market until the 1990s. Soon after, companies that operated large fleets of vehicles — such as trucking and logistics companies — began using telematics to keep track of their fleets.
Modern telematics
As of 2024, built-in GPS systems are either standard equipment or optionally available in nearly every new car on the market. Newer systems are also much more accurate than earlier versions. However, modern vehicle telematics involves much more than just navigation and location tracking.
As cars become increasingly digital and computer controlled, their computerized “brains” rely on sensors throughout the vehicle that monitor every function. Advanced sensors can track everything from braking force to acceleration, tire pressure, g-forces, suspension movement, distance to the car in front, and even driver attentiveness behind the wheel. (The latter is used mainly in driver monitoring systems, which
Telematics and auto insurance
In the 1990s, some U.S. insurance companies began to see the benefit of telematics data. By tracking the habits and behaviours of individual drivers behind the wheel — some people accelerate gently and obey the speed limit, while others may be braking suddenly and driving erratically — insurance companies realized they could offer more personized automotive coverage. With
The rise of connected cars
Telematics technology is a subset of a broader technological revolution that’s sweeping the automotive landscape: connected cars. They’re defined by their ability to wirelessly communicate with the cloud, and potentially also the car manufacturer, third-party services, or even the surrounding infrastructure.
According to Transport Canada, most new vehicles sold today are considered “connected.” A report from consulting firm Straight’s Research projected the value of the global connected car market will hit $361 billion (USD) in 2030, up from $86 billion in 2021.
Indeed, connected cars open up a world of new possibilities. In fact, many drivers already subscribe to in-car wireless data packages that enable everything from real-time traffic updates to over-the-air (OTA) software updates. The latter is becoming increasingly common in new vehicles since regular software updates can keep in-car technology feeling fresh, secure, and add new features and functions over time.
In the future, connected cars could help make the roads much safer and even help traffic flow more efficiently. For example, cars could warn nearby vehicles of a nasty pothole on the road ahead, or a cross-walk could alert nearby drivers that school is out and children are crossing.
Cars have evolved from analog machines to digital machines to online machines, but the next evolution will see cars connected to each other and the world around them too. The possibilities seem endless, and we’re just begun to scratch the surface.