Renault (& Co) & Google – Keys to the kingdom pt. II.

Google’s automotive ambitions take another hit.

• The Renault-Nissan-Mitsubishi Alliance’s deal with Microsoft raises the question as to whether Google will have any access at all vehicle data and in my opinion deals Google’s automotive ambitions yet another blow.
• The Alliance has signed a deal with Microsoft to use Azure as its connected car platform starting with the Nissan Leaf and the new Renault Clio that will ship in Europe and Japan.
• The deal also covers all 200 markets where the alliance sells vehicles, meaning that every connected vehicle that the alliance ships will have access to the Azure-powered platform.
• This is a major blow to Google as the alliance is Google’s landmark signing for Android Automotive and the assumption has been that it will be sharing all of its data with Google.
• Such a wide-ranging deal for Azure calls into question whether Google will be getting any data rendering it to nothing more than a software supplier.
• This is similar to Volvo’s deal with Ericsson (see here) where Volvo will use Ericsson’s vehicle offering for its connected vehicles rather than Google.
• Volvo has also signed up to use Android Automotive in its vehicles and has launched the Polestar 2 for 2020, but whether the vehicle data goes to Google is now very unclear.
• If Google is not receiving data from the vehicle, then there is very little point to its entire Android Automotive strategy.
• Google’s reason for existing is to categorize the Internet and to sell targeted advertising on the back of what it learns.
• For this, it has to gather and analyse data from its Digital Life services and the devices that run them.
• Google views the vehicle exactly as it views the handset: a device through which it can deliver its services to users.
• Consequently, if it is not gathering any data from the vehicles that are running its software and its services, then I would deem the whole strategy as a total failure.
• This is exactly what the alliance’s deal with Microsoft and Volvo’s deal with Ericsson imply.
• It will, of course, be able to gather data from its own services that are embedded in the infotainment unit but that leaves it no better off than it was with Android Auto.
• Android Auto is software that allows apps running on the phone to be projected into the infotainment unit just like CarPlay or Baidu CarLife.
• The one possibility is that Google may have embedded in the software the ability for users to consent to sending vehicle data to Google.
• Android Automotive consists of millions of lines of code and I suspect that the OEMs do not have a crystal-clear picture of exactly what is in this code and how it works.
• The net result could be is that at the factory, no data is sent to Google, but when the vehicle detects a Google account login, it asks the user if he would like to have extra free services by sharing more data with Google.
• A positive response from the user could then allow all the data to be sent to Google by the user in addition to the data going to the OEM’s designated platform.
• RFM has no data to verify this possibility but it would recommend that all OEMs that want to keep their data out of Google’s clutches, carefully sift through the code to see what it really contains and what it does in many scenarios.
• The net result is that this looks like another hit to Google’s automotive ambitions but also I am becoming increasingly concerned with regards to data fragmentation.
• If every vehicle maker keeps all of its data to itself, then the total data opportunity will be a tiny fraction of what it would be if the OEM’s club together and share their data anonymously.
• RFM’s potential $1.4tn vehicle data market in the USA by 2047 assumes that data is shared between vehicle makers and failure to move in this direction will result in a far smaller opportunity.
• OEMs need this opportunity to offset falling vehicle shipment revenues caused mostly by the move to electric vehicles meaning that their intransigence could be their very undoing.
• Google may yet have the last laugh.