Navigant Research Blog

Verizon and Hughes Shake Up the EV Telematics Market

Dave Hurst — June 29, 2012

At almost every level of the nascent electric vehicle market, companies are hoping to be able to use the data from EV consumers to build better systems for the customer experience and the smart grid connection.  There’s a large amount of work being done by telematics providers, OEMs, and suppliers to reduce range anxiety and understand the vehicle use data.  What’s surprising, as I learned at the Telematics Detroit 2012 conference on telematics for electric vehicles, is that there is little specialization occurring to enable these telematics programs to take advantage of these unique customers.  It feels like an opportunity is either not being revealed or being missed entirely.

This doesn’t come as a surprise.  When I did the research for the EV Telematics report last year, I found that there was very little specialization at that time as well.  The few key areas of specialization were (and still are) identifying EV charging equipment locations, enabling trip planning, and offering the ability to reserve charging stations.  The focus of the telematics industry when it comes to EVs is reducing range anxiety.  In my opinion, that should be the cost of entry, not the end goal.

The big news in Detroit was the announcement of Verizon’s acquisition of Hughes Telematics for $612 million.  Most of the smaller telematics companies are not happy about Verizon’s vertical extension into their market.  And who can blame them?  One conference-goer groused, “Verizon stops advertising for an afternoon and can afford to buy one the largest telematics firms with revenue that bests us on a good year.”  I pointed out last year after this same event that “there are too many in this segment to be sustainable. This industry looks ripe for consolidation as it grows.”

The smaller telematics companies may not be happy, but the arrival of big service providers should fuel growing innovation in the EV telematics space.  Verizon has been rapidly building its machine-to-machine (M2M) capabilities, with purchases of nPhase and of cloud computing providers.  With Hughes, Verizon now has a very complete package it can offer automakers, and it has created a forum to identify new telematics services and needs that capitalize on the 4G LTE platform.

Hughes has already established programs with electric vehicles with more on the way.  Verizon is also no stranger to the electric vehicle market and is now partnering with Via Motors to implement PHEV vans into their fleet.  What does all this mean for the EV market?  Well, my hope is that the combination of Verizon’s innovation and the strength of Hughes in telematics and M2M will light a fire under the slow-to-blossom EV telematics opportunity.  The combination of a small market (only about 31,800 plug-in vehicles are on the road as of June 1) with buyers who are interested in technology and have a proven willingness to be first adopters, positions these drivers as prime targets for beta testers for new telematics features.  Bring on the innovation.

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