From telecommunications to essential technology

Telematics isn’t a new concept, but with the rise of electric and autonomous vehicles it has moved from a nice-to-have to a near necessity. JACO DE KLERK reports.

Redtail Telematics, a provider of Global Positioning System (GPS)-enabled fleet tracking products with headquarters in the US and UK, provides an informative breakdown of the history of telematics in its blog post, Redtail Telematics – A brief history of telematics, by Samantha Olsson.

“To discover the history of telematics, we need to first look at GPS and its origins. Without the creation and eventual worldwide free access of GPS, telematics as we know it probably wouldn’t exist,” writes Olsson. It all began in the 1960s, when the US Department of Defence developed GPS technology. “Also in the 1960s, Theodore Paraskevakos’ work on Caller ID led to the conception of M2M [machine-to-machine: direct communication between devices]. Another important milestone in the history of telematics as we know it today,” Olsson notes.

“Simon Nora and Alain Minc devised the term ‘telematics’ in a report to the French government in 1978. The term blends the French words télécommunications (telecommunications) and informatique (computing science),” she continues.

Olsson adds that, in 1993, the US government granted everyone free access to GPS: “Another crucial moment in the history of telematics because GPS is so key to the way telematics is used today.” From here, the development and uses of telematics really took off in the 2000s. 

Today, telematics is a multi-billion-dollar industry, as research specialist Fortune Business Insights points out in its piece, Commercial Telematics Market Size, Share and Covid-19 Impact Analysis… 2021 to 2028.*

“The market is projected to grow from US$40.18 billion in 2021 to US$158.31 billion in 2028, at a compound annual growth rate of 21.6% in the 2021 to 2028 period,” the research company states.

The Fortune Business Insights report highlights that the decreasing costs of automotive sensors and telematics devices are fuelling their adoption in the trucking and fleet management industries of emerging economies: “Hence, rising demand for commercial telematics in medium to large scale industries in these regions is expected to boost the market growth over the forecast period. Additionally, technological advancement in the manufacturing processes of these devices also enables the manufacturers to provide telematics devices at affordable pricing, which further influences the market.”

The increasing adoption of usage-based insurance (UBI) will also boost market growth. “UBI provides a policy premium directly connected to vehicle usage. Insurance companies monitor real-time vehicle usage by using telematics devices and further decide the premium as per the usage. Hence, the increasing adoption of UBI in well-established economies is expected to boost market growth in years to come,” the report continues.

“Moreover, supply chain disruption due to the Covid-19 pandemic has reduced trucking and fleet activity worldwide. Many fleet owners are shifting from conventional insurance plans to UBI plans to opt for the benefits, creating demand for telematics systems.”

Redtail Telematics predicts that nearly 90% of all vehicles globally will have integrated telematics by 2025: “Telematics is being implemented by OEMs and has paved the way for development of driverless vehicles, delivery drones and more.”

PCI, a specialist in electronics manufacturing services, agrees, as highlighted in its blog post, The Future of Telematics Systems. “Besides enabling efficient navigation from one point to the other, telematics systems are capable of resolving many key challenges that electric (EVs) and autonomous vehicles (AVs) are facing. For starters, they are capable of collecting data from OBD-II, GPS, tyre pressure and driver face images for preventive maintenance and driver monitoring,” notes the post.

“The deployment of sensors such as cameras, radars, and lidars for monitoring the surroundings also helps drivers anticipate potential traffic scenarios to make more informed decisions,” it continues. “Equipping AVs with these sensors means having a 360° view of the external environment, thereby providing a broader picture of the traffic conditions around them. With a more holistic view of nearby vehicles, pedestrians, cyclists, traffic signs and unexpected obstructions, more accurate actions can be taken to reduce the chances of road accidents and avoid congested zones for smoother travel.”

The Association of Fleet Professionals (AFP), a not-for-profit body that supports, educates, and trains the corporate fleet industry across the UK, adds that telematics is proving “almost essential” to the adoption of electric vans and job-need electric cars. According to Stewart Lightbody, vice chair at the industry body, the technology is important when it comes to resolving two major points: when, where, and for how long these cars and light commercial vehicles were charged, and calculating actual amounts reimbursed by employers to employees for charging costs incurred.

“We now have a number of major fleets with more than a thousand EVs, so there is quite a formidable bank of experience available within the AFP. A key message we are receiving from these members is that in the majority of job-need cases, telematics is proving almost essential to a smooth electrification process,” he expands.

“It’s a key element in ensuring that the best option is employed at the best time in terms of convenience and range, with the aim of minimising charging downtime. For example, many electric van operators are timing charging to coincide with driver’s breaks, using telematics to confirm that employees are rapidly charging to 80% and not lingering to trickle charge to 100%. This is seen as the most productive balance of work availability against charging time,” continues Lightbody.

“Others are trying to minimise the use of rapid charging, especially on motorways, because low operating costs are an essential part of their electrification objectives,” he says, pointing out that there is generally a wide gap between the cheapest available power – usually at home – and the most expensive, which is normally the fastest commercial charging on motorways.

“Additionally, in cases where there is limited charging provision – such as in remote areas – the technology means that work can be planned around the few facilities that are available, making EVs practicable in places where there might otherwise be difficulties,” he adds. “In all of these instances, the use of telematics makes planning and monitoring much easier, showing the location and type of chargers in relation to the vehicle route and allowing charging strategies to be implemented effectively.”

Lightbody believes that electrification is providing a whole series of new opportunities and challenges for fleets, and that this thinking around telematics is only one fragment of the overall picture: “An important advantage of being part of the AFP is the ability to network and access best practice, and this is something that is proving especially important for EV operators at the moment.”

One wonders if Nora and Minc could have ever imagined, when they coined the term ‘telematics’ in their government report, how essential it would become in the global transport industry?

* Full article title: Commercial Telematics Market Size, Share and Covid-19 Impact Analysis, by Solution Type (OEM and Aftermarket), by Application (Solutions and Services), by End-User (Transportation and Logistics, Insurers, Healthcare, Media and Entertainment, Vehicle Manufacturers/Dealers, and Government Agencies), and Regional Forecasts, 2021 to 2028.