Connected cars are cars that send their data to the carmaker's cloud through a built-in SIM card, and receive software updates back over the mobile network. Many new cars in India come with an app that shows this. From your phone, you can lock the car, check the fuel or charge, switch on the air conditioning before you get in, or find where you parked.
Inside the car is a small computer with its own SIM card, called a telematics device. It sends the car's data over the mobile network. The data includes where the car is, the health of the battery or engine, the fault codes that the car's systems record when something goes wrong, and how the car is driven. The wider subject is called telematics. In India, public transport vehicles such as buses and taxis must carry a tracking device of this kind, which is one reason the technology is already common on commercial vehicles.
The cloud that receives the data is the connected car platform. The carmaker uses it for the app's remote services, for tracking a stolen car and for spotting a fault before the owner notices it. Some insurers also price cover by how the car is actually driven, as described under usage-based insurance.
The updates travel the other way. A modern car has dozens of small computers, each an electronic control unit (ECU). The over-the-air update platform collects data from all of them and updates their software over the mobile network, as a phone is updated. This fixes faults and adds features without a visit to the workshop.
This is what makes a software-defined vehicle possible: a car that is updated for years after it leaves the factory. Carmakers often charge a subscription for connected services after the first few years. Who owns the data that comes back, the owner, the carmaker or the platform, is becoming a legal question. In India, personal data is covered by the data protection law.