The evolution of the Internet of Vehicles can be roughly divided into three stages. It is expected that the scale will exceed 100 billion by 2021.

On December 4, 2019, Zhiyan Consulting released the report "Analysis of the Current Development Status and Future Development Trends of China's Internet of Vehicles Industry Market in 2018", the contents of which are as follows:

1. Definition and Development Path of Internet of Vehicles

According to the definition of the Strategic Alliance for Technological Innovation in the Internet of Vehicles Industry, the Internet of Vehicles is a large-scale system network that is based on the in-vehicle network, inter-vehicle network and in-vehicle mobile Internet, and conducts wireless communication and information exchange between vehicle and X (X: vehicle, road, pedestrians and the Internet, etc.) in accordance with agreed communication protocols and data interaction standards. It is an integrated network that can realize intelligent traffic management, intelligent dynamic information services and intelligent vehicle control, and is a typical application of Internet of Things technology in the field of transportation systems.

According to the definition of China Academy of Information and Communications Technology, the Internet of Vehicles uses new-generation information and communication technologies to achieve all-round network connections within the car, between cars, between cars and roads, between cars and people, and between cars and service platforms, thereby improving the intelligence level and autonomous driving capabilities of cars, and building a new model of car and transportation services, thereby improving traffic efficiency, improving the driving experience, and providing users with intelligent, comfortable, safe, energy-saving, and efficient comprehensive services.

The China Society of Automotive Engineers defines intelligent connected vehicles as vehicles that are equipped with advanced on-board sensors , controllers, actuators and other devices, and integrate modern communication and network technologies to achieve intelligent information exchange and sharing between vehicles and X (vehicles, roads, people, cloud, etc.), with functions such as complex environment perception, intelligent decision-making, and collaborative control, which can achieve "safe, efficient, comfortable, and energy-saving" driving, and ultimately replace human operation. Therefore, the Internet of Vehicles is mainly based on a new generation of information and communication technologies to achieve all-round coordination and interaction between vehicles, vehicles and people, vehicles and infrastructure, and vehicles and the Internet, further realize intelligent driving and smart transportation, improve the intelligence and networking of vehicles, reduce traffic accidents, and reconstruct the entire automotive industry chain.

The evolution of the Internet of Vehicles can be roughly divided into three stages: the first stage is the functional in-vehicle information service stage led by car companies, the second stage is the intelligent network service stage, and the third stage is the smart travel service stage. At present, we are in the intelligent network service stage. With the continuous breakthrough of LTE -V2X technology, it is expected to achieve L3/L4 level autonomous driving.

Three stages of the development of the Internet of Vehicles

2. China's Internet of Vehicles Industry Development Policy

Since July 2016, the National Development and Reform Commission and the Ministry of Transport have issued the "Implementation Plan for Promoting "Internet +" Convenient Transportation and Promoting the Development of Intelligent Transportation" to promote the deep integration of transportation and the Internet and promote the development of intelligent transportation. In 2018, the Ministry of Industry and Information Technology and the National Standards Committee issued a number of standards systems related to the Internet of Vehicles (intelligent connected vehicles) to promote the standardization of the development of the Internet of Vehicles industry. In December 2018, the Ministry of Industry and Information Technology issued the "Internet of Vehicles (Intelligent Connected Vehicles) Industry Development Action Plan", pointing out that by 2020, the cross-industry integration of the Internet of Vehicles (Intelligent Connected Vehicles) industry will achieve breakthroughs, and positive progress will be made in key technologies, standard systems, technical facilities, application services, and security assurance, which will point out the direction for the development of the Internet of Vehicles industry. In September 2019, the State Council issued the "Outline for Building a Strong Transportation Country" to strengthen the research and development of intelligent connected vehicles (intelligent vehicles, autonomous driving, and vehicle-road collaboration) to form an independent and controllable complete industrial chain. The introduction of a number of policies has laid a policy foundation for the rapid development of the Internet of Vehicles industry.

Summary of major policies on Internet of Vehicles in recent years

3. Development environment and current status of China’s Internet of Vehicles industry

(1) my country's civilian car ownership has grown steadily

As of 2018, the number of cars in my country exceeded 260 million. The huge automobile market provides a favorable foundation for the rapid growth of my country's Internet of Vehicles services. The number of civilian cars in China reached 240.28 million (including 9.06 million three-wheeled cars and low-speed trucks), an increase of 10.5% over the end of the previous year, of which private cars reached 207.30 million, an increase of 10.9%. The number of civilian cars reached 134.51 million, an increase of 10.4%, of which private cars reached 125.89 million, an increase of 10.3%.

Statistics on China's civilian car ownership from 2010 to 2018

(2) China's Internet of Vehicles penetration rate will exceed the global average in 2020

In 2015, the global Internet of Vehicles penetration rate was 10%, and the penetration rate in my country was 7%. It is expected that by 2020, the global and Chinese Internet of Vehicles penetration rates will exceed 20% and 24% respectively.

Global and Chinese Internet of Vehicles penetration rates from 2015 to 2020

In December 2018, the Ministry of Industry and Information Technology issued the "Internet of Vehicles (Intelligent Connected Vehicles) Industry Development Action Plan", which pointed out that by 2020, the Internet of Vehicles user penetration rate will reach more than 30%, the new car driving assistance system (L2) installation rate will reach more than 30%, and the new car installation rate of connected vehicle information service terminals will reach more than 60%, and a comprehensive application system covering information services, safety and energy efficiency applications will be built. On November 21, 2019, at the "11th China Car Hunting List", the "AI Driven Automotive Industry Fission - China Automotive Enterprises and New Generation Information Technology Integration Development Report (2019)" jointly released by the National Industrial Information Security Development Research Center and the National Business Daily showed that the penetration rate of new intelligent connected models reached 31.1% in 2018, nearly 5 times that of 2016; the penetration rate of new Chinese brand intelligent connected models reached 35.3% in 2018, 15 times that of 2016. Intelligent network connection functions are penetrating from high-end and luxury models to ordinary models. It is estimated that the penetration rate of potential customers' orders for intelligent network connected vehicles will reach 36.4% in 2019; it is expected that the penetration rate will reach 51.6% by 2020.

(3) It is expected that the scale of China's Internet of Vehicles will exceed 100 billion in 2021

Benefiting from macro policy drive, 5G commercialization and continuous improvement of infrastructure, the scale of the Internet of Vehicles market has maintained rapid growth. China's automobile market is huge, and the share of connected cars continues to increase. In the future, as the Internet of Vehicles industry ecosystem continues to improve, technology and services continue to mature, the industry scale will usher in great development. In 2018, the scale of China's passenger intelligent Internet was 42.1 billion yuan. It is expected that with the gradual improvement of supporting facilities, the scale of China's passenger intelligent Internet of Things will be greatly increased in the next few years, and it is expected to reach 134.7 billion yuan by 2025.

China's passenger car intelligent connected car market size from 2017 to 2025

In 2016, the national Internet of Vehicles market size was 36.64 billion yuan, which rose to 48.6 billion yuan in 2018, with a stable growth rate of about 14% in the past three years. At the same time, with the promotion and application of 5G technology in 2020 , the development of V2X technology, and the increase in user value-added payment, the Internet of Vehicles market size in 2020 increased by 69.9% year-on-year, showing a rapid growth trend.

China's Internet of Vehicles Market Size, 2016-2021

(4) Competition landscape of China’s connected vehicle market

Faced with the rapidly developing Internet of Vehicles market, Internet giants are rushing to enter the market and layout the field of intelligent driving. Internet giants, relying on their own advantages in the software industry, have cooperated with traditional car companies to enter the field of Internet of Vehicles and intelligent driving, becoming the current investment focus. As a pioneer in China's intelligent driving field, Baidu's Apollo open platform is a comprehensive intelligent driving commercial solution. It has brought together many domestic and foreign autonomous driving manufacturers and cooperated with many traditional car companies in the field of intelligent driving. Tencent Auto has reached strategic cooperation with many traditional car companies such as Changan, FAW, GAC, Dongfeng, and BMW.