Pressure on Commission ahead of decision on connected car technology

15 CEOs from car companies, tech firms and telecoms operators wrote to European Commission President Jean-Claude Juncker asking him to change a draft legislative proposal that they argue could harm Europe's ability to introduce 5G mobile networks. [Shutterstock]

This article is part of our special report What’s driving Europe’s strategy on connected cars?.

Pressure is mounting on the European Commission ahead of a decision it is expected to announce this autumn that will affect how internet-connected cars are built in Europe.

Car companies, telecoms operators, tech manufacturers and European national governments are nervous about the action and argue it could leave a lasting mark on what kind of technology is built into new cars, which will be outfitted with an increasing amount of internet-based functions in the coming years.

At the heart of the disagreement is whether a technical policy decision within the Commission could lend support to a short-range, Wifi-based system that is already available for use—or to the cellular, longer-range technology known as C-V2X, which is seen as a precursor to 5G networks.

European governments have pledged to make the fast next-generation mobile technology ready for commercial use by 2025.

What has largely remained a niche policy squabble over technical standards in recent months seems to have reached a boiling point now, just before Brussels quiets down for summer recess.

Supporters of the cellular technology argue that a Commission announcement favouring the Wifi-based vehicle-to-vehicle option could be a barrier to the EU’s goals to introduce 5G within a few years.

“We believe it will have an impact on the rollout of 5G in Europe and it will be not a positive one. It will be negative,” Uwe Puetzschler, the head of Nokia’s digital-focused programme Car2x told a Brussels gathering of industry groups and EU officials last week.

Lobbyists have lined up to warn the Commission that the decision could chill companies’ investment plans to build the expensive infrastructure needed to support 5G.

Those networks will cost around €500 billion to build, according to Commission estimates, but telecoms companies argue the figure is actually much higher. They have warned officials in Brussels that they may be less likely to open their pockets to invest in new infrastructure without strong business cases—like the possibility of having cars across Europe run on cellular technology.

So far, the Commission has insisted it will not side with either C-V2X or the Wifi-based V2V option. But early drafts of the legislative proposed expected out later this year, which EURACTIV has obtained, include details indicating how a radio spectrum band will be used by V2V—but the document contains no reference to the cellular technology.

Automakers and telecoms firms bicker over EU connected vehicle proposal

A battle between car manufacturers and telecoms operators is heating up as the European Commission prepares to announce legislation later this year that could determine whether automakers will need to rely on Wifi or wireless 5G technology to build internet-connected vehicles.

The debate has pitted some carmakers against telecoms companies. A handful of car manufacturers have announced plans to invest more money into building vehicles with the Wifi-based technology. They argue that the V2V option is an easier choice because it is already available, and because it will make safety features more precise.

But the lobby in favour of cellular technology is becoming increasingly concerned as the Commission announcement comes closer. An alliance of CEOs from 15 tech companies, telecoms operators and car manufacturers warned Commission President Jean-Claude Juncker earlier this month that the planned legislation will hamper Europe’s goals to roll out 5G networks within the next few years.

“Despite the European Commission’s stated commitment to technology neutrality, we are very concerned about the progressing Delegated Act. At the current time, it rules out the most recent technology, Cellular-V2X (C-V2X), favouring a specific and single-purpose Wifi-based technology path (known as ITS-G5), thus precluding the evolution to 5G for connected cars,” said the executives’ letter, seen by EURACTIV.

It was signed by the CEOs of BMW, Daimler, Deutsche Telekom, Ericsson, Ford, Huawei, Intel, Nokia, PSA, Telefonica, Samsung, software firm Savari, Chinese manufacturer Saic Motor, Qualcomm and Vodafone.

The executives urged Juncker to remove language from the bill that limits what technology carmakers will be able to use to build internet-connected vehicles. They also said that the current draft would make it hard for European companies to compete with US and China-based firms, where the national governments have taken actions to make way for 5G use in new internet-connected cars.

“Such a decision would stunt the overall emergence of 5G connectivity infrastructure in Europe, and run counter to the objectives of the Commission’s own 5G action plan, which aims to promote early deployment of 5G along major transport paths. A de-facto ITS-G5 mandate will mean that the transportation and telecommunication industries have much less incentive to invest in 5G for automotive and to provide 5G coverage alongside road corridors,” the letter said.

National governments also divided over the issue

A handful of countries are hitting back against the Commission’s draft proposal. EURACTIV previously reported on blistering comments that the Finnish and Spanish transport ministries sent to the EU executive criticising its plans to lock in Wifi as the only option that carmakers could use to build vehicles with high-tech features like internet-connected automatic braking or smart entertainment systems.

Another big and important country also recently weighed in on the debate.

An official in the German economy ministry sent an 11-page position paper on 4 July backing the Wifi option. A personal letter sent with the paper was addressed to the German Association of the Automotive Industry VDA, the main lobby group for the country’s powerful auto sector.

“The upcoming implementation of V2X systems must use the technology that is available now on the market. Currently, only ITS-G5 is available. As a result, the corresponding infrastructure uses this technology,” the German paper said.

The text referred to V2X, meaning vehicles that connect to everything, including other cars and road infrastructure. ITS-G5 is the short-range Wifi technology.

However, even the German industry is divided. Two of the country’s biggest car companies, BMW and Daimler, signed the critical letter to Juncker asking for the Commission to change track and move away from its plans to side with the V2V Wifi-based option.

At the Brussels gathering of industry groups pushing for the cellular CV2-X technology last week, Eddy Hartog, the high-level official in charge of smart mobility at the Commission’s technology policy directorate DG Connect, insisted that the EU executive would stick to a neutral position and refrain from backing one option over the other. But he acknowledged that the debate had heated up.

Hartog, speaking after a lineup of industry representatives in favour of the 5G option, described their presentations as “a little bit of a beauty contest”.

EU connected cars plan sparks national backlash

A niche policy fight over the technical groundwork for internet-connected cars has pitted car companies against telecoms operators and also set off alarm bells in a handful of EU capitals.

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