STRASBOURG -- The European Commission's push for a Wi-Fi-based standard for cars backed by Volkswagen, Renault and Toyota took a big step forward on Wednesday after EU lawmakers endorsed Wi-Fi over 5G technology promoted by BMW and Qualcomm.
The EU executive wants to set benchmarks for Internet-connected cars, a market that could generate billions of euros in revenues for automakers, telecoms operators and equipment makers, according to analysts.
At issue are the rules of the road for future connected and automated cars in Europe, which will dictate how to send information between vehicles and infrastructure, such as making cars aware of other vehicles on the road as well as relaying signals from traffic lights and other facilities.
The issue has split the auto and tech industries and triggered fierce lobbying from both sides seeking a share of a potentially lucrative market for Internet-connected vehicles.
5G backers include companies such as Daimler, Ford, PSA Group, Deutsche Telekom, Ericsson, Huawei, Intel, Qualcomm and Samsung.
Fifth generation, or 5G, standard hooks up to both cars and devices in the surrounding environment, with a wider range of applications in areas such as entertainment, traffic data and general navigation.
Wi-Fi technology primarily connects cars to other cars.
The Commission has defended its stance on Wi-Fi technology, saying that it is available unlike 5G and that it would help to boost road safety.
The cheerleaders for using WiFi argue that the industry needs clarity on what systems to use as soon as possible, and that it currently is the only proven technology. The second largest truckmaker, Sweden’s Volvo Group, said the draft legislation still leaves room to embrace 5G technology in the future.
Critics have said a requirement that new technologies be modified to be compatible with older technology is unrealistic and would put a brake on innovation.
"We are convinced that mandating WiFi technology will cause significant delays to the European rollout of car-to-car and car-to-infrastructure communication," BMW CEO Harald Krueger and Deutsche Telekom CEO Timotheus Hoettges said in a joint letter to Germany’s Transport Minister Andreas Scheuer.
Lobbying group and 5G technology supporter 5GAA said the text currently proposed by the Commission fails to ensure a level playing field between existing technologies by imposing discriminatory interoperability and compatibility requirements against newer technologies.
The telecoms industry, which is putting its hopes in 5G applications to recoup its investments, was similarly critical. "Europe cannot mandate only one technology for connected driving. Member states can now correct this by bringing 4G and 5G back into the picture: global competitiveness and safety are at stake," said Lise Fuhr, director general of telecoms lobbying group ETNO.
The last hurdle for the plan is the European Council where opponents would require a blocking majority to overturn the proposal. There are no details yet on when the Council will decide.
Bloomberg contributed to this report