Automotive Satellite Connectivity: Giving Drivers Truly Ubiquitous Connectivity

By Abu Miah | 3Q 2024 | IN-7478

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Non-Terrestrial Network (NTN) communications, such as satellite, have begun to emerge in the smartphone market over the last few years, with Apple announcing in November 2022 that the iPhone 14 would ship with an emergency SOS via satellite service, and Huawei launching the satellite-capable Mate P60 smartphone in 2023, detailed in ABI Insight "Non-Terrestrial Network Connectivity Promises to Expand the Market Opportunity for Satcom." Integrating this technology into vehicles requires some further innovation. Several bodies, such as the 5G Automotive Association (5GAA) and European Space Agency (ESA), have explored working groups and funding for innovation in automotive satellite technology, addressing vehicle antennas and satellite modules for example.

Original Equipment Manufacturers (OEMs) in China already have some models shipping with satellite connectivity capabilities, such as the Geely Galaxy E8, Zeekr 007, Zeekr 001, Changan NEVO E07, and the BYD Yangwang U8 Off-Road, but other regions have yet to do the same. Some are better positioned than others; for example, Tesla is vertically integrated with Starlink and Elon Musk has stated that vehicles shipping will have embedded satellite connectivity through Starlink satellites at some point, but this has not materialized in the 2 years since this comment. However, the value proposition of satellite connectivity makes integration a promising option for companies like Tesla and Geely, which have satellite operating companies vertically integrated.

Use cases for satellite connectivity will initially target narrowband applications, such as emergency text or call, stolen vehicle tracking, or remote monitoring/control. These applications are also accommodated by cellular connectivity, but the biggest differentiator for satellite is the coverage and reliability of the network. Consumers with cellular connectivity in their vehicles today still see services fail due to cellular white spots or unreliability of networks, and for what OEMs hope to convert into paid connectivity subscriptions, they must offer reliable, useful, and convenient services. Even in the European Union (EU), one of the better-connected regions in the world, drivers have no connectivity ~12.4% of the time on main roads, and some countries still have very poor coverage. The coverage of satellite networks enables OEMs to address this problem, giving the technology a significant value proposition. OEMs are focusing integration efforts in the more premium vehicle segments for the time being, with further integration to be decided.

In the future, as progress is made in parallel in the smartphone market, more broadband applications may be feasible for satellite connectivity to address. New Radio (NR) NTN satellite connectivity is proposed to enter the vehicle as soon as 2029, allowing features such as video-on-demand, video conferencing, or even cloud gaming.

However, integration of more broadband capabilities, or even of narrowband features into vehicle classes beyond Sport Utility Vehicles (SUVs) or the premium segment depends on several factors.

First, integration approaches are still being debated; for example, utilizing the existing cellular antenna in the vehicle and adapting it to accommodate NTN connections, or adding a specialized satellite antenna to the vehicle. The cost efficiencies of these approaches will determine whether or not integration into more price-sensitive vehicle segments is feasible. Second, and most importantly for OEMs, the business and revenue model for this emerging technology requires consumers to be able to readily access an emergency text service through satellite; for example, without going through a payment mechanism that slows down its use. A pay-per-use, pay-per-trip, or subscription model can all run into this issue, and if drivers are denied a feature that their vehicle is already capable of, especially during a moment of emergency, then they will be left with a poor view of the OEM brand.

Pricing of the features must also be determined carefully; the costs of network infrastructure, per unit data costs, and user equipment costs (e.g., the specialized antennas on the vehicle) can all drive up the price of an in-vehicle satellite emergency text feature. OEMs may be willing to absorb the cost to provide consumers with a lower price in order to provide proof that drivers are willing to pay something for features like this that provide real value. Furthermore, consumers who have upgraded to smartphone models that have satellite features, like the iPhone 14 and above, among other models, will be able to use their devices to achieve the same outcome as their vehicles could achieve, but without the additional paywall.

Additionally, regarding the potential future integration of broadband applications through NTN satellite connectivity, the costs of integration may be too high for the marginal benefit of the features added. Cloud gaming or video-on-demand through satellite connectivity are both features that have less of a unique value proposition than emergency text, so even if the additional costs of integrating (different satellite modules and antennas) are negligible for OEMs, it is more unlikely that consumers will be willing to pay.

For satellite connectivity to become a successful paid feature in the vehicle, OEMs should target the most applicable use cases and enable drivers to access them through a quick, straightforward, in-vehicle mechanism, such as a one-tap app store-like the Feature on Demand (FoD) page.