Half of new vehicles sold this year will feature connectivity, with the figure jumping to nearly three quarters (70%) of all vehicles sold in 2028, according to a new connected cars report from ABI Research.

The research firm added that automakers are embracing connectivity due to a wide variety of benefits such as fleet management, warranty cost reductions, convenient electric vehicle ownership, and over the air (OTA) updates, just to name a few.

Connected Cars Report

Connected services subscriptions are being extended to drive higher customer engagement, with the average free trial period ranging from three to six months. But convincing auto owners to pay for these services after the free period has been a challenge. ABI Research expects more than seven-in-10 of active infotainment subscriptions to be on a free trial or free-for-life arrangement this year.

Despite these benefits for new car buyers, though, automakers have found it challenging to recoup their costs for these connectivity services. As a result, vehicle connectivity is still not a significant revenue source.

“Due to the prevalence of high traffic phone data plans, end consumers have little motivation to pay for connectivity and rarely renew subscriptions after the free trial period, which carmakers are constantly extending,” said Maite Bezerra, ABI Research smart mobility and automotive research analyst, in a prepared statement. “This is especially true for infotainment services that compete with free phone mirroring. This reality signals that it will be challenging for carmakers such as Stellantis, Ford, and GM to achieve their recently announced goals to generate $20 billion in software and services revenues annually by 2030, at least 13 times what they generate today.”