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5G and its Big Bang impact on the auto industry

October 18, 2020

Of course, at first, there will be new cars, and that will probably be the most visible part of the 5G revolution. Existing but still under-represented electric vehicles (EVs) will benefit from the push given by 5G to production plants since better connectivity leads to better control, analysis, and overall performance. Given that electric vehicles have already attracted heavy investment – with major “legacy” brands having launched pure or hybrid electric vehicles – a significant push in performance could be the final piece of the puzzle for manufacturers to turn EV production into the new norm. Easier production means a better speed of launch and an ultimately higher return on investment, and both consumers and manufacturers are willing to move away from fossil fuel-powered assets. On top of that, 5G will certainly facilitate the use of infrastructure meant to support the deployment of electric vehicles, such as recharge stations. Being able to monitor battery levels better, find charging stations more easily, and identify efficient routes faster could significantly enhance the EV experience.

Beyond EVs, the next hot topic will certainly be autonomous vehicles. This is a topic that has been on the table for several years but never made it to the next level. 5G will certainly change that. Indeed, autonomous vehicles have a machine learning-based approach – the more they drive, the more they can understand patterns that will help them shape the appropriate driving responses. But all this digestion of information is only possible if you’re able to collect and store data in the first place. And for this, you need the next level of connectivity, a level that only 5G can enable. The goal here is to turn the “vehicle-to-everything” (V2X) concept into reality. What is V2X? Basically, it’s the ability for a vehicle to wirelessly connect to multiple sources of information in its surrounding environment, be it other vehicles or traffic lights. In 2016, eight corporations including car manufacturers (AUDI AG, Daimler AG, BMW), and telecoms (Ericsson, Huawei, Intel, Nokia, Qualcomm) created the 5G Automotive Association (5GAA), designed to support the development of V2X technologies. The association name makes it clear – without 5G there will be no V2X technology.  Let’s consider some figures: 5G is expected to provide wireless download speeds of above 500 Mbps in a wide area network (WAN), whereas 4G is only 100 Mbps. And let’s note that these are probably just some conservative estimates – the gain of connectivity speed is surely going to be massive.

Now, it’s not only car fleets that will transform, but it’s also services linked with the auto industry in general. With autonomous cars could come new forms of shared services, whether we’re talking about the improvement of existing chauffeur companies such as Didi, Caocao, Shouqi, or about the emergence of autonomous vehicles only transportation services. The former would obviously mean a massive disruption in the market and could drive demand for these vehicles in the not-so-long term.

The industry knows that the right connectivity power is what’s lacking if we want the next generation of vehicles to emerge and I believe 5G meets these requirements to an extent that will make its deployment much more groundbreaking than what was the 3G to 4G transition. Of course, the scenarios mentioned in this paper might come to life progressively and will need to be supported by an ambitious country or city-wide 5G deployment road maps. But everything indicates that the ambition to invest is shared in both the public and private sectors. Let’s see how this materializes in the coming years and months, but it sure sounds exciting!


Liang Li

Business Analyst – CST

Capgemini China

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