How Electric Car Companies Drive Data to Build Revenue Part 2
The electric car industry is a dynamic market, with new technologies and innovations constantly transforming the industry. For example, the electric car industry is witnessing a rapid rise in the number of companies opening their electric cars. These companies include Tesla Motors, General Motors, Tata Motors, Mahindra and Mahindra, and Volkswagen. In addition, many other automakers are also working on developing their electric car models such as Ola Electric.
The availability of electric cars is expected to increase in the coming years. This is due to the increasing number of electric cars being sold, as well as the declining costs associated with battery technologies. 100% of cars will be connected by 2025. 75% of cars on the road will be autonomous by 2035.
Let’s continue with how these electric car companies are driving revenue.
Table of Contents
Revenue Generation from Telematics and Insurance to Finance and Advertising
Collecting data from electric vehicles can be a lucrative business for many reasons.
Telematics:
The collection of telematic data has become an important part of the automotive industry. Most automakers have developed systems that allow them to collect this type of information from their customers' vehicles or their fleet's vehicles. Telematics can also be used by third parties to collect this type of data on behalf of the automaker or fleet owner.
Telematic data is a type of data that is collected by an automatic device, such as a GPS or a smartphone. Telematics can be used to track the location of vehicles, monitor fuel consumption or mileage, and position, and help drivers find parking spaces.
For example, it could be used by a driver to set their route or provide guidance on how long they will need to charge their EV before they reach their destination.
Insurance Companies:
Telematics also provide valuable information about how customers drive their cars so that insurance companies can assess risk and provide more accurate quotes for car insurance premiums.
For example, telematics is used for insurance claims by monitoring how many miles an EV driver has driven (or how much energy they consume) and comparing that against what the driver has rented or purchased through the app. In this way, insurers can know whether a driver is driving within acceptable limits and thus avoid paying out unnecessary claims in the future.
Finance Companies and Advertisers:
Revenue can be generated by selling the information collected in a way that can be used for further analysis. This can be done by selling it directly to other companies or organizations, as well as selling it on an open market. In the case of finance and advertising, the company can charge for access to its data.
The business can sell data to banks and advertisers to help them develop better products and services around electric vehicles. This allows them to make more informed decisions, which saves money in the long run and provides customers with better products.
Finance companies are interested in collecting data from customers' EVs because it allows them to provide them with better service options and more accurate predictions of future costs than if they were using only traditional methods. They can also use it to improve lending policies or offer credit scores based on factors like mileage range and ownership history.
For example, EV companies could sell anonymized information about their customers' driving patterns, such as how often they drive their cars and how much energy they use. This could be done through a subscription service or a pay-as-you-go, model. The company could also charge for access to its database of vehicles and their owners. The business might also sell its vehicle inventory, which would include all the vehicles that it has sold over the past year or so.
EV companies sell their data to advertisers. Advertisers then use this information to target their ads toward consumers who are interested in buying electric vehicles, so they can be more effective at attracting those consumers to their products or services.
Example of Data that Tesla Collects from its Customers
In the world of mobility, no company is more progressive than Tesla. This company has broken all the rules of the game and gained a lot of popularity for itself in the process. One thing which no one seems to know is that it isn't making money off car sales, but from the data, it collects.
Here are the ways Tesla collects data from customers:
1. Data collected from the users and their devices: Name, address, phone number.
2. Data collected during vehicle services: Customer’s name, vehicle identification number, and repair history.
3. Data collected through credit applications and other forms: Driver’s license, date of birth, social security numbers, and bank routing information.
4. Data collected offline: When a customer has visited a Tesla store or repair facility, attended a Tesla event, or signed up for a test drive.
5. Data collected from browser or device: Media access control access, browser type (Windows/MAC), language.
6. Data collected from Tesla vehicles: speed information, odometer readings, and camera images.
7. Data collected from personal information in the vehicle that Tesla can access: Contacts, browsing history. Navigation history.
8. Data collected from Tesla energy products: Information about the home, dimensions of the roof, and the configuration of electrical systems.
Progressive Insurance built a pilot program with Tesla that allows customers with electric cars to rent a car when they need one without having to pay extra fees associated with purchasing a new vehicle or renting one from an outside company. The company plans to expand this program throughout its fleet after testing it out on 30 Tesla models that were rented in California and New Jersey.
Conclusion
An electric car generates a lot of data about driving characteristics, battery status, and more. Electric vehicle companies make revenue from the data they collect from their customers' cars. They sell anonymized data collected by their vehicles to third parties. Another way to make money from data is by using it for marketing purposes. Data can help car manufacturers improve their products. All automakers are watching Tesla, which has been the first to go down this path. While Tesla offers the option to turn off data collection, it may not be easy for other EV companies to make that choice.