Today’s economies are dramatically changing, triggered by
development in emerging markets.
The accelerated rise of new technologies,
sustainability policies, and changing consumer preferences around ownership.
Digitization, increasing automation, and new business models have
revolutionized other industries, and automotive will be no exception. These
forces are giving rise to four disruptive technology-driven trends in the
automotive sector: diverse mobility, autonomous driving, electrification, and
connectivity. @ Read More: menfashdesign
Most industry players and experts agree that the four trends
will reinforce and accelerate one another, and the automotive industry is
ripe for disruption. Given the widespread understanding that game-changing
disruption is already on the horizon, there still needs to be an integrated perspective on
how the industry will look in 10 to 15 years due to these trends. To
that end, our eight key perspectives on the “2030 automotive revolution” aim to provide scenarios concerning changes and how
they will affect traditional vehicle manufacturers and suppliers, potential new
players, regulators, consumers, markets, and the automotive value chain.
This study aims to make the imminent changes more tangible.
Based on our current understanding, the forecasts should thus be interpreted as a projection of the most probable assumptions across all four trends. They
are certainly not deterministic but should help industry players
better prepare for the uncertainty by discussing potential future states.
1. Driven by shared mobility, connectivity services, and
feature upgrades, new business models could expand automotive revenue pools by
about 30 percent, up to $1.5 trillion. @ Read More: ethicmenvoguee
The automotive revenue pool will significantly increase and
diversify toward on-demand mobility and data-driven services. This
could create up to $1.5 trillion—or 30 percent more—in additional revenue
potential in 2030, compared with about $5.2 trillion from traditional car sales
and aftermarket products/services, up by 50 percent from about $3.5 trillion in
2015 (Exhibit 1).
Connectivity, and later autonomous technology, will
increasingly allow the car to become a platform for drivers and passengers to
use their time in transit to consume novel media and services or
dedicate the freed-up time to other personal activities. The increasing speed
of innovation, especially in software-based systems, will require upgrading cars. As shared mobility solutions with shorter life cycles become
more common, consumers will be constantly aware of technological advances, increasing demand for upgradability in privately used cars.
2. Despite a shift toward shared mobility, vehicle unit
sales will continue to grow, but likely at a lower rate of about 2 percent per
year.
Overall, global car sales will continue to grow, but the
annual growth rate is expected to drop from 3.6 percent over the last five
years to around 2 percent by 2030. This drop will be largely driven by
macroeconomic factors and the rise of new mobility services such as car sharing
and e-hailing.
A detailed analysis suggests that dense areas with a large,
established vehicle base are fertile ground for these new mobility services,
and many cities and suburbs of Europe and North America fit this profile. New
mobility services may result in a decline in private-vehicle sales. Still, this decline is likely offset by increased sales in shared vehicles that need
to be replaced more often due to higher utilization and related wear and tear.
The remaining growth driver in global car sales is the
overall positive macroeconomic development, including the rise of the global
consumer middle class. With established markets slowing in growth, however,
growth will continue to rely on emerging economies, particularly China, while
product-mix differences will explain different development of revenues. @ Read More: businessdirectorypc
3. Consumer mobility behavior is changing, leading to up to
one out of ten cars sold in 2030 potentially being a shared vehicle, and the
subsequent rise of a market for fit-for-purpose mobility solutions.
Changing consumer preferences, tightening regulation, and
technological breakthroughs add to a fundamental shift in individual
mobility behavior. Individuals increasingly use multiple modes of transportation
to complete their journey; goods and services are delivered to rather than
fetched by consumers. As a result, the traditional business model of car sales
will be complemented by diverse, on-demand mobility solutions,
especially in dense urban environments that proactively discourage private car use.
Consumers today use their cars as all-purpose vehicles,
whether commuting alone to work or taking the whole family to the
beach. In the future, they may want the flexibility to choose the best solution
for a specific purpose, on-demand and via their smartphones. We already see
early signs that the importance of private car ownership is declining: in the
United States, for example, the share of young people (16 to 24 years) who hold
a driver’s license dropped from 76 percent in 2000 to 71 percent in 2013, while
there have been over 30 percent annual growth in car-sharing members in North
America and Germany over the last five years.
Consumers’ new habit of using tailored solutions for each
purpose will lead to new segments of specialized vehicles designed for very
specific needs. For example, the market for a car specifically built for
e-hailing services—that is, a car designed for high utilization, robustness,
additional mileage, and passenger comfort—would already be millions of units
today, and this is just the beginning.
As a result of this shift to diverse mobility solutions, up
to one out of ten new cars sold in 2030 may likely be shared vehicles, which
could reduce sales of private-use vehicles. This would mean more than 30
percent of miles driven in new cars sold could be from shared mobility. On this
trajectory, one of three new cars sold could be a shared
vehicle as soon as 2050. @ Read More: allinternetbuziness
4. City type will replace country or region as the most
relevant segmentation dimension that determines mobility behavior and, thus,
the speed and scope of the automotive revolution.
Understanding where future business opportunities lie
requires a more granular view of mobility markets than ever before.
Specifically, segmenting these markets by city types is necessary based
primarily on population density, economic development, and prosperity.
Across those segments, consumer preferences, policy and regulation, and the
availability and price of new business models will strongly diverge. In
megacities such as London, for example, car ownership is already becoming a
burden for many due to congestion fees, a lack of parking, traffic jams, et
cetera. By contrast, in rural areas such as the state of Iowa in the United
States, private car usage will remain the preferred means of transport by far.
The type of city will thus become the key indicator for
mobility behavior, replacing the traditional regional perspective on the
mobility market. By 2030, the car market in New York will likely have much more
in common with the market in Shanghai than with that of Kansas.
5. Once technological and regulatory issues have been
resolved, up to 15 percent of new cars sold in 2030 could be fully autonomous.
Fully autonomous vehicles will be commercially available in 2020. Meanwhile, advanced driver-assistance systems (ADAS)
will play a crucial role in preparing regulators, consumers, and corporations
for the medium-term reality of cars taking over control from drivers.
The market introduction of ADAS has shown that the primary
challenges impeding faster market penetration are pricing, consumer
understanding, and safety/security issues. Regarding technological readiness,
tech players and start-ups will likely play an important role in developing autonomous vehicles. Regulation and consumer acceptance may
represent additional hurdles for autonomous vehicles. However, once these
challenges are addressed, autonomous vehicles will offer tremendous value for
consumers (for example, the ability to work while commuting or the convenience
of using social media or watching movies while traveling).
A progressive scenario would see fully autonomous cars
accounting for up to 15 percent of passenger vehicles sold worldwide in 2030
(Exhibit 2).
6. Electrified vehicles are becoming viable and competitive;
however, the speed of their adoption will vary strongly at the local level.
Stricter emission regulations, lower battery costs, more
widely available charging infrastructure, and increasing consumer acceptance
will create new and strong momentum for the penetration of electrified vehicles
(hybrid, plug-in, battery electric, and fuel cell) in the coming years. The
speed of adoption will be determined by the interaction of consumer pull
(partially driven by total cost of ownership) and regulatory push, which will
vary strongly at the regional and local levels.
In 2030, the share of electrified vehicles could range from
10 percent to 50 percent of new vehicle sales. Adoption rates will be highest
in developed dense cities with strict emission regulations and consumer
incentives (tax breaks, special parking and driving privileges, discounted
electricity pricing, et cetera). Sales penetration will be slower in small
towns and rural areas with lower levels of charging infrastructure and higher
dependency on driving range.
Through continuous improvements in battery technology and
cost, those local differences will become less pronounced, and electrified
vehicles are expected to gain more and more market share from conventional
vehicles. With battery costs potentially decreasing to $150 to $200 per
kilowatt-hour over the next decade, electrified vehicles will achieve cost
competitiveness with conventional vehicles, creating the most significant
catalyst for market penetration. At the same time, it is important to note that
electrified vehicles include many hybrid electrics, which means
that even beyond 2030, the internal combustion engine will remain very
relevant.
7. Within a more complex and diversified mobility-industry
landscape, incumbent players must compete simultaneously on
multiple fronts and cooperate with competitors.
While other industries, such as telecommunications or mobile
phones/handsets, have already been disrupted, the automotive industry has seen
little change and consolidation. For example, only two new players
have appeared on the list of the top 15 automotive original-equipment
manufacturers (OEMs) in the last 15 years, compared with ten new players in the
handset industry.
A paradigm shift to mobility as a service and new entrants will inevitably force traditional car manufacturers to compete on
multiple fronts. Mobility providers (Uber, for example), tech giants (such as
Apple Google), and specialty OEMs (Tesla, for instance) increase the
complexity of the competitive landscape. Traditional automotive players under continuous pressure to reduce costs, improve fuel efficiency, reduce
emissions, and become more capital-efficient will feel the squeeze, likely leading
to shifting market positions in the evolving automotive and mobility
industries, potentially leading to consolidation or new partnerships
among incumbent players.
In another game-changing development, software competence is
increasingly becoming one of the most important differentiating factors for the
industry for various domain areas, including ADAS/active safety, connectivity,
and infotainment. Further on, as cars are increasingly integrated into the
connected world, automakers will have no choice but to participate in the new
mobility ecosystems that emerge due to technological and consumer
trends.
8. New market entrants are expected to target only
specific, economically attractive segments and activities along the value chain
before potentially exploring further fields.
Diverging markets will open opportunities for new players,
initially focusing on a few selected steps along the value chain and targeting only specific, economically attractive market segments—and then expanding
from there. While Tesla, Google, and Apple generate significant interest, we believe they represent just the tip of the iceberg. Many more
new players, especially cash-rich high-tech companies and start-ups, are likely to enter the market. These new entrants from outside the industry also wield more influence with consumers and regulators (that is, generating
interest around new mobility forms and lobbying for favorable regulation of new
technologies). Similarly, with impressive sales growth recently, some Chinese car manufacturers might leverage the ongoing disruptions to play an important role
globally.
Automotive incumbents cannot predict the future of the
industry with certainty. However, they can make strategic moves to shape
the industry’s evolution. To get ahead of the inevitable disruption, incumbent
players need to implement a four-pronged strategic approach:
Prepare for uncertainty. Success in 2030 will require
automotive players to shift to a continuous process of anticipating new market
trends, exploring alternatives and complements to the traditional business
model, and exploring new mobility business models and their economic and
consumer viability. This will require sophisticated scenario
planning and agility to identify and scale new attractive business models.
Leverage partnerships. The industry is transforming from
competition among peers toward new competitive interactions, partnerships, and open, scalable ecosystems. To succeed, automotive
manufacturers, suppliers, and service providers must form alliances or
participate in ecosystems—for example, around infrastructure for autonomous and
electrified vehicles.
