July 15, 2024

Why interoperability matters in the automotive industry

Winona Rajamohan

Content Marketing Manager

Online applications are becoming more ingrained into consumers' everyday travel experiences. Today, we use apps like Uber or Lyft to hail rides or Google Maps to plan our travel routes with different modes of transportation. We can get pre-approved for car loans through mobile banking solutions or buy and sell cars with our dealership’s website. Utilities can even pay EV drivers to participate in demand response or virtual power plants through an app experience. 

The ability to control our automotive experience through our phones and computers is the mobility ecosystem at work. 

Similar to the mechanics of the Open Banking ecosystem, API integrations are integral to the reliability, efficiency, and security of data connectivity. The automotive industry is seeing the same tidal wave of innovation that the finance sector maneuvered during the emergence of FinTech. Like the financial institutions that have expanded market share by tapping into open banking, the automotive industry is also well positioned to better serve drivers through a wider ecosystem of connected car applications.

Interoperability in the automotive industry

To put it simply, interoperability is the seamless exchange of data between different systems or platforms. It’s an environment in which access to data is open to participants and managed through standardization, allowing consumers to use a mix of services and applications that match their preferences instead of a limited single-brand ecosystem. 

If we compare this to our previous example of the finance sector, this would be like giving consumers in the US the freedom to link their bank account to external services like Betterment or Venmo that add to the financial management experience. 

Without interoperability, it would be extremely difficult for banks to build those connections without putting sensitive financial information at risk. They would have to take on the burden of building these solutions and limit the reach of services to a partner ecosystem that consumers have less access to. 

In the automotive industry, interoperability means enabling seamless connectivity between automakers and the service providers that consumers use regularly to travel and manage their vehicles. 

The demand for interoperability is already here

In our 2023 State of Connected Car Apps report, 58% of respondents said that they use connected car apps and services daily or weekly. Respondents between the ages of 25 and 34 were more likely to use connected car applications daily, signifying a growing comfort and reliance on mobility applications in a younger generation of drivers. 


Close to 30% of respondents have used more than five connected car applications outside of their official automaker application.

(Source: 2023 State of Connected Car Apps Report)


This is why Smartcar has established a standardized API for mobility businesses to build this growing ecosystem of mobility applications. 

With a single standardized integration, applications like Uber, Turo, and Recurrent can provide value to more consumers using a brand-agnostic API, robust consent management protocols, detailed API documentation, reliable reporting, and more. This saves businesses time and cost when developing valuable solutions that drivers across brands can use. 

How does interoperability benefit consumers?

Consumers are at the center of the mobility ecosystem, influencing the innovation in automotive services. An interoperable data standard helps consumers unlock immense value from a range of solutions to elevate their travel and vehicle ownership experience. 

For example, a driver can connect their EV to an application like Buzze to list or rent EV chargers that aren’t in use. That same EV can be connected to a solution like Treads for predictive maintenance, and to a program like Uplight’s AutoGrid Flex™ for demand response incentives. The combination of these solutions allows drivers to maximize their cost savings and convenience, contributing to overall satisfaction with their vehicle and vehicle manufacturer. 

Other key benefits include...

How do automakers benefit from interoperability? 

As we’ve seen, the value of vehicle connectivity is not limited to in-vehicle services like entertainment, voice-assisted capabilities, and remote or on-demand functions. There are powerful experiences that exist beyond the vehicle itself — and automakers need interoperability to tap into this additional value. 

The market opportunity for connected services is vast. However, the fragmentation between the in-car and out-of-car experience makes it challenging for automakers to innovate while maintaining resource efficiency. An interoperable data standard helps automakers bridge drivers to a range of preferred external solutions using standardized API endpoints and consent management mechanisms. This unlocks benefits such as...

How does Smartcar bring the mobility ecosystem together? 

Imagine the value of an automotive ecosystem that empowers vehicle owners to choose solutions that enhance their safety, save them money, or shrink their carbon footprint — all with the same ease and security as linking your bank account to your digital wallets. 

We believe that open data in automobility is critical to protect consumer privacy, accelerate infrastructure development, meet decarbonization goals, and encourage continued innovation.

That’s the future we’re building at Smartcar with our interoperable data standard for connected cars. Our API-based data sharing and consent management platform, Smartcar Connect, bridges the gap between automakers and the mobility solutions that drivers love using.

With a partnership rooted in open and standardized vehicle data, we’re excited to help automakers drive more innovation and growth with the support of a network of companies building consumer apps and services on Smartcar. Contact us to learn how we can partner to unlock the freedom of movement for everyone. 

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