In retrospect, the early 2020s will mark the beginning of the end of motorized private transport and the internal combustion engine. The automotive industry is facing massive changes, as the mobility world of the 2030s will be a different, radically data-based and service-oriented one. In the worst scenario, German automakers are suppliers to the big US IT giants.
Let’s start with good news
The automakers have recorded a sales record after another in recent years. Between 2016 and 2024, the number of vehicles sold per year is expected to increase by a further quarter from 92 million to 114 million. So where exactly is the problem?
Fear of disruption is driving exponential progress
The acceleration of technical progress puts companies, which want to shape the mobility of the future , under ever increasing pressure for innovation. It becomes increasingly critical to success to find answers to questions such as:
- Which technology will achieve the ‘performance’, the ‘distribution’ or the ‘price’ at what point in time, so that it is suitable for the mass market? And how soon will it be outdated or obsolete?
- Where are disruptive threats coming from?
- Which new players are entering the market?
- How will digitalisation affect the business model?
As the car manufacturers want to secure as much of the future market as possible, they are eager to move on. Thus, the fear of disruption from outside becomes the engine of an exponential progress that everyone, even the established companies, is pushing ahead. The consequence is that
- change come faster and more intensely than expected
- companies cannibalize their traditional core business.
Mobility itself will not be disrupted
What exactly does disruption mean? The electric motor does not disrupt mobility. In the same way the CD did not break the music industry. Only the advent of MP3 and the digital distribution of music through platforms and today’s streaming services such as Spotify have completely restructured the music business. Is this also conceivable in the mobility sector? Although the effect of ‘mobility’ can be achieved with various means, it is always ‘hardware-based’, meaning that it can not be digitized but only digitally optimized (efficiency) and digitally expanded (services).
An exception to this are communication technologies, which make the need to physically cover a distance in order to exchange information superfluous. From the letter to the telephone call to the videoconference this is nothing new. We want to neglect it here, even though AR and VR applications could substitute a certain amount of mobility.
The good news is that more and more people will travel longer and longer distances. The world population will continue to grow, as will the middle classes in developing and emerging countries. Mobility is increasing. Another good news is that the car will dominate the mobility of the future far more than in the past. So where exactly is the problem? In the future, less is more! Fewer cars, more mobility …
Maximum efficiancy through AI
“More with less” means higher efficiency. A more efficient mobility system than fleets of autonomous electric vehicles, whose utilization and routes are optimized with the help of artificial intelligence and which offer each passenger a highly flexible door-to-door mobility, is actually inconceivable. An exception is the subway as a means of mass transport in very large cities, which can carry a large number of people to their workplace at home or back home. Today, it is not possible to make an accurate prediction of the share of autonomous electric vehicles in individual mobility and public / shared mobility. That depends mainly on legal regulations and our attitude to the car and to driving a car. However, it is very likely that ‘Mobility-as-a-Service’ will prevail because, at some point, owning a car will no longer be a significant benefit to the individual. And ‘Mobility-as-a-Service’ will be of great benefit the general public:
- Lower resource consumption
- Lower CO2 emissions
- Less noise
- No traffic jams
- Higher traffic safety
- Lower mobility costs
- Time savings while driving
- Possibility of conversion of parking areas
For example, diesel driving bans are being discussed in many German city centers due to the high particulate matter and nitrogen oxide pollution. The conversion of the vehicles would devour billions. But the pressure is high: in the EU 400,000 people die each year due to high air pollution.
80 % less cars
Efficient and ecologically sustainable: According to a recent study, autonomous, electrically powered and shared vehicles could reduce the number of vehicles in the US from 247 million today to 44 million by 2030. But that would also mean that money is no longer earned with the hardware, but in the new multi-trillion-dollar market: ‘Mobility-as-a-Service’. Existing business models will be replaced by new ones – with far-reaching consequences for manufacturers, suppliers, dealers and workshops. Successful will be those companies that have the digital expertise to build and run the necessary infrastructure, have the sovereignty over the data, and run the platforms that offer value-added services based on these data.
The bad news
At the moment, these competencies are not with the established car manufacturers, but with newcomers like Tesla and with IT companies like Google, Apple & Co.
The race is open.