Well, in order to implement it the car has to have a "phone" (mobile station) and a GPS. And I think (although not proven) that in order to meet the time requirement it has to keep both of them "warm", ie registered to network with a GPS fix. Which means at the minimum the mobile operators know where the car is at all times. And the car manufacturer has built almost all the hardware for full tracking.
A potential privacy issue yes, but much less so than the data collection.