With the Ford Model T, mass motorization began more than 100 years ago. The carriage-dominated street scene was to change completely from 1908 within a few years. By the end of the 1920s, Tin Lizzie was sold by the millions. Many coachbuilders and companies went bankrupt. Some, the more far-sighted, developed into wagon factories, tram companies or car dealers. Motorized private transport has left its mark on the 20th century – a model of success. Now, the automotive industry itself is facing the biggest change in its history. In 15 years, no one will enter a car dealership or buy a car. Those born today may be the first generation without driver’s license.

What will happen? A conceivable roadmap …

2018-2022: Thick Air

Since more and more German cities are failing to comply with the emission limit values applicable in the EU, many municipalities have imposed driving bans on diesel. In addition, a city toll will be introduced in most major cities to reduce the number of cars with internal combustion engines on the roads and motivate more people to switch to public transport. Through a higher clocking of buses and trains combined with significantly cheaper tariffs, additional incentives are set for the change. At the same time, a nationwide network of charging stations for electric cars is being developed in urban areas. The share of electric cars in all vehicles sold increases to twenty percent. 90 percent of them are purely electrically powered vehicles. By the end of 2022, 1.4 million electric cars will be on German roads. Sales of new cars stagnates at 3.5 million per year. The number of car dealerships has halved due to consolidation compared to 2015 to around 3,700.

2023-2025: Electric mobility takes off

Electric cars have achieved price parity with combustion engines without further government support. These are the big boom years of electromobility. New and more powerful batteries with a longer range and a longer service life convince consumers. All car manufacturers have massively expanded their product range of electric models. Most vehicles offer highly automated driving (Level 3), which is mainly used for highway driving. Urban mobility is characterized by smart and highly efficient public transport as well as numerous sharing concepts and innovative e-mobility services provided by private companies. Innovative micro mobiles compete with the car as a lifestyle object and status symbol and find wide use in short-distance mobility. The share of electric cars in all vehicles sold increases to 90 percent. By the end of 2025, 7.5 million electric cars will be on German roads. The air quality in the cities could be significantly improved. Total new vehicle sales have dropped to three million a year. In Germany there are only 3,000 dealerships left. Due to the significantly lower maintenance intensity of the electric motors, the workshops also come under massive pressure.

2026-2028: Buy or Rent?

The year 2026 marks the end of the internal combustion engine: The proportion of all new cars sold drops to less than one percent. Electromobility is becoming commonplace. Around 16 million electric cars are on German roads. Most of the energy requirement can be covered by cost-effective regenerative sources. The vast majority of new cars have fully automated driving (Level 4) technologies that are gradually being used in urban traffic situations. The individual driving experience increasingly takes a back seat in purchasing decisions. The vehicle interior is increasingly used for mobile work, shopping, relaxing, etc. Since the introduction of autonomous driving (Level 5) is foreseeable, more and more people are hesitant to buy a new car. They wait for the time when the vehicle takes over all the driving functions and a driver is no longer necessary. Leasing and sharing providers are experiencing an upturn. In the year 2028, only 2.6 million vehicles will be sold in Germany. Even the big car dealerships are under pressure. Amazon has become the most successful car salesman and leasing provider. The number of car dealerships has dropped to less than 2,000. Their function has largely been reduced to an interface between the customer and the online retailer.

2029-2031: Service providers are displacing distributors

Increasingly, autonomous electric vehicles dominate the streetscape. In online trading, they deliver themselves to the customer or are at the appointed time for a test drive at the door. Stationary trade hardly plays a role anymore. But online commerce is also under pressure. An ever more comprehensive Mobility-as-a-Service offer makes the purchase of an owned car increasingly obsolete. Especially city dwellers benefit from fast and convenient door-to-door mobility. The trips can be booked alone or – then cheaper – in conjunction with others. The operator models vary. In some cities they are purely public and have supplemented and then replaced classic public transport. In other cities private providers dominate. It is foreseeable that the market will continue to consolidate. In 2031, only one million new cars will be sold in Germany, half of them to mobility service providers.

2032-2034: Robocabs at spot price

The introduction of autonomous electric vehicle fleets has disrupted the entire mobility market. Mobility is always available and extremely cost-effective. The energy supply of the fleets entirely comes from regenerative energies. Electricity prices have fallen drastically in recent years because of numerous energy innovations. The batteries in the fleet are used to compensate for load fluctuations in the power grid. With photovoltaic paint, cars even produce some of the energy they need themselves. Mobility-as-a-Service will remain the dominant mobility concept of the 21st century. Cars are only bought by enthusiasts – but they are no longer allowed to drive on public roads.

2018-2022: Thick Air

Is such a scenario conceivable? Based on today’s knowledge of socio-political trends and technological developments, it is at least conceivable, maybe even likely.

Electromobility and autonomous driving will come. I remember many projects with leading automotive companies, in which this statement was fundamentally questioned just a few years ago. Today, leadership teams only disagree about the pace of change and the urgency of action. The big car manufacturers are no longer just preparing but driving their own innovations. How can entrepreneurs and managers in public transport, car dealerships, workshops and suppliers handle this? To bet on a slow change would be negligent. The change in the market for mobility will be so massive that a complete reorientation of the company becomes necessary in many cases. It is comparable to the transformation from horse carriage manufacturer to car dealer or tram operator mentioned above. Such a massive change in the business model needs a clear vision and strategy. And it takes time, energy and consistency in the implementation.

In the coming weeks, I will shed some light on some of the principles of how actors in the mobility market can master the disruption and even emerge stronger from it.

You can download the White Paper How to survive the mobility disruption: 6 strategy archetypes and 8 tactical moves if your business is threatened by the next era of mobility here for free.

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