Developing the EFAS Smart Services Initiative to introduce a game -changer in the digital tachograph market

Project Information

ESSI

Grant agreement ID: 745263

DOI

10.3030/745263

Project closed

EC signature date 3 December 2016

Start date 1 November 2016

End date 28 February 2017

Funded under

• SOCIETAL CHALLENGES - Smart, Green And Integrated Transport

Total cost

€ 71 429,00

EU contribution

€ 50 000,00

Coordinated by

INTELLIC GMBH
Austria

Periodic Reporting for period 1 - ESSI (Developing the EFAS Smart Services Initiative to introduce a game -changer in the digital tachograph market)

Reporting period: 2016-11-01 to 2017-02-28

Summary of the context and overall objectives of the project

BUSINESS OPPORTUNITY: The possibilities that telematics services introduction in the heavy and medium commercial vehicles (HMCV) market brings are increasingly engaging the interest of users. The shift from providing product centric value to service centric value through telematics solutions, would radically change the trucking industry (from “truck-as-a-product” to “truck-as-a-service”). The use of Intelligent Transport Systems (ITS) solutions is stipulated in several existing or planned legal acts and voluntary agreements. However, there are several barriers for implementing and enforcing them, such as security, data protection, harmonization, interoperability, protection against fraud/abuse etc.
THE IDEA: Intellic’s new product EFAS Smart turns a mandatory device for the HMCV -the digital tachograph (DT)- into the core telematics element in the ITS station of the commercial vehicle. EFAS Smart provides an Open-in-vehicle platform architecture (EFAS Service Platform) that will integrate both mandatory (enforced by legislation) and commercial cloud applications (even from 3rd party providers), with a high security environment to support trusted operations and subjected to international technical standards.
THE MARKET: We are living a turning point in which the current business models will be redefined. Telematics systems in trucks will be standard and IT and software solutions will link trucks to the "Industry 4.0". In the next decade the global connected trucks market will boost. The global installed telematics devices reach 19.5 Million units in 2016 (22.3 Million by the end of 2017) and total connected truck market will grow on a CAGR of 14% from 2016 to 2025 to reach 63.5 million vehicles. The global market volume for telematics solutions in commercial vehicles will reach € 10 billion in 2026.
THE STRATEGY: With EFAS Smart, Intellic will continue expanding its core business of DTs, but it will be upgraded through a whole disruptive business model, that enhances the service opportunities around its main product and, therefore, diversifies the end applications and possible partners. The regulatory applications can be an enabler in opening the markets, as being mandatory their impact will be higher. In the future, any third party app developer can partner to develop apps that can work on the telematics platform.
This Feasibility Study (FS) has a main objective: to analyse the commercial, technical and financial viability to get the product into market.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The work performed has been:
-Market analysis: We analysed existing DT and HMCV markets, as well as the promising emergent Connected Truck Telematics market. For all of them, we defined market value, market trends, market barriers and segments. End users, their needs and benefits were defined. Competitors and competing solutions were deeply studied and ESSI’s superior offer contrasted.
Technical Work Plan (WP): A thorough patents search was performed to guarantee "Freedom to operate". Then the detailed plan of the activities on the hardware (integration of commercial components and adaption of main- and crypto-controller) and software side (Telematics Services implementation) was deployed, in order to prepare next steps in EFAS Smart development. Partners and subcontracting requirements in all the project phases were identified.
Business Plan: Based on the previous market prospects, we defined EFAS Smart marketing strategy, analysis of resources (equipment, human resources and funding needs), business alliances and distribution channels, key risks analysis with mitigation actions, and update of our financial prospects to determine EFAS Smart and ESP associated services impact on Intellic’s business.
Conclusions: All information derived from the FS supports to pursue ESSI’s idea. The open platform telematics is one of the top trending issues in the industry. Many actors are trying to fill this market niche but Intellic has key competitive advantages that outstands current competing solutions. The novelty of EFAS Smart’s and ESP’s features is not protected by any published patent and Technical WP design is appropriate to achieve the ESSI’s goals. Commercial and financial prospects are sound and optimistic.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

PROGRESS BEYOND THE STATE OF THE ART: there is an outstanding current trend to advance in the upgrading of DT, as the patents search has shown. These devices are meant to become crucial tools in the development of open in-vehicle platforms for telematics services. ESSI addresses an important European level challenge: to find solutions in order to deploy ITS services through in-vehicle equipment, especially pan-European applications, before truck manufacturing companies control the market. EFAS Smart and ESP exceed all the current competitors’ products and other existing competing solutions (open in-vehicle platforms not linked to digital tachographs).
IMPACT AND USE
COMPANY: The Business Plan shows a disruptive Business Model, in which Intellic must change its profile from Hardware provider to Telematics Trucking Services provider. This fact will open emerging markets and positively impact Intellic’s sales and financial results.
USERS: Assures compliance with legal requirements. Investment protection: Saves time by easy operation and handling, high performance & additional automated functionality, efficient service (reducing costs) and maintenance support at installation. Added values: driver support to comply with social regulation and new cloud applications.
CLIENTS: Original Equipment Manufacturers (OEMs): First, there is revenue potential from the higher vehicle sales price. Second, this is an opportunity for truck manufacturers to strengthen their brands. Third, manufacturers can leverage data to sell additional, highly-tailored offerings and retain satisfied customers. After Market Organizations (AMOs): Telematics solutions in the ESP will enhance direct communication with drivers through their vehicle, this technology shift fundamentally changes aftermarket relationships with consumers. Third Parties Telematics Service Providers: A third party vendor is able to integrate smaller, specific services at little hardware cost.
SOCIO-ECONOMIC AND IMPACT AND WIDER SOCIETAL IMPLICATIONS: ESSI will impact on EU business development. The ESP will provide a business ecosystem that will enhance SMEs, start-ups and entrepreneurs participation as developers of new telematics services. The proposed business model will strengthen strategic partnerships among value chain actors looking for a better integration of minor sized players. The use of ITS will lead to use transport and infrastructure more efficiently, saving costs, fuel consumption and reducing emissions.

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