Uncertainty about how the market for electromobility will develop seems to have dwindled in 2017. Among other things, the announcements made by the UK and France to prohibit the sale of cars with internal combustion engine by 2040, has created some more clarity. In the long term, the Asian region will be more important. In India, all newly sold cars from 2030 should be equipped with an electric drive. In China, at least 40 percent of new cars in 2030 have to be e-vehicles. Both countries together make up more than a third of the world’s population.

In addition to the announcements and initiatives of many governments, it seems increasingly conceivable for more and more drivers to drive an electric car in the future. Falling prices, increasing ranges and generally lower maintenance and operating costs are the main drivers here. The cost disadvantages disappear. Already in a few years, electric cars can also be at an advantage here.

Announcements from major car manufacturers mark upheaval

The Vision Electromobility was aggressively promoted by carmakers in 2017. Some examples: With the ‘Roadmap E’, Volkswagen launched the most comprehensive electrification offensive in the automotive industry. More than 20 billion euros will be invested in the field of electromobility. By 2025, 80 new electric vehicles are expected to hit the market. Daimler plans to electrify the entire Mercedes portfolio by 2022. In every Mercedes series, at least one electrified alternative should be offered. The smart brand will be completely converted to electric drives in Europe and North America by 2020. BMW wants to bring to 25 e-models to the market by 2025. Even more radical is the announcement by Volvo Cars, to produce only cars with at least one hybrid drive from 2019.

New competitors, new markets

The electric car pioneer Tesla entered series production this year with the Model 3 and hopes to conquer the mass market. The goal is to produce half a million units in 2018 and one million cars by 2020. Despite the current delays in production ramp-up, Tesla could become the leading manufacturer in the e-segment. New competition is also emerging from established car manufacturers from China, the largest and probably the fastest growing market for electric vehicles in the future. The People’s Republic is not only the most populous country in the world, but also by far the largest emitter of the greenhouse gas CO2. Government-imposed minimum targets for the share of alternative propulsion put domestic carmakers under pressure, but they are also an important driver of innovation: the Chinese could easily leapfrog the technological lead of the large international carmakers in the combustion engine. The Chinese manufacturer BYD is already the largest EV manufacturer in the world. Geely is working on two new platforms to produce plug-in hybrids (PHEV) and all-electric cars – targeting the European and US markets as well. The competition is likely to intensify in the future. Due to the simpler technology, startups will increasingly launch vehicles on the market. An interesting example is the sion of the Munich startup Sono Motors, introduced just a few months ago. The e-car can be charged, at least in part, via solar cells integrated in the body. The vehicle thus becomes a mobile charging station. The generated electricity can even be passed on (sharing). In addition to innovative startups, non-sector players will also enter the market. Known primarily for vacuum cleaners and hairdryers, British company Dyson is working on a ‘radical’ battery-powered electric vehicle to be launched in 2020. Heidelberger Druckmaschinen AG has invested heavily in electromobility and recently presented a wallbox to further expand the charging infrastructure for electric vehicles. However, the entry of these outsiders also testifies to a gold rush mood and possible overheating of the market. Whether they will succeed will be shown. What is certain, however, is that electromobility is becoming a complex ecosystem. Different companies cooperate but are also in intense competition with each other.

New competition is also emerging from established car manufacturers from China, the largest and probably the fastest growing market for electric vehicles in the future. The People’s Republic is not only the most populous country in the world, but also by far the largest emitter of the greenhouse gas CO2. Government-imposed minimum targets for the share of alternative propulsion put domestic carmakers under pressure, but they are also an important driver of innovation: the Chinese could easily leapfrog the technological lead of the large international carmakers in the combustion engine. The Chinese manufacturer BYD is already the largest EV manufacturer in the world. Geely is working on two new platforms to produce plug-in hybrids (PHEV) and all-electric cars – targeting the European and US markets as well.

The competition is likely to intensify in the future. Due to the simpler technology, startups will increasingly launch vehicles on the market. An interesting example is the sion of the Munich startup Sono Motors, introduced just a few months ago. The e-car can be charged, at least in part, via solar cells integrated in the body. The vehicle thus becomes a mobile charging station. The generated electricity can even be passed on (sharing). In addition to innovative startups, non-sector players will also enter the market. Known primarily for vacuum cleaners and hairdryers, British company Dyson is working on a ‘radical’ battery-powered electric vehicle to be launched in 2020. Heidelberger Druckmaschinen AG has invested heavily in electromobility and recently presented a wallbox to further expand the charging infrastructure for electric vehicles. However, the entry of these outsiders also testifies to a gold rush mood and possible overheating of the market. Whether they will succeed will be shown. What is certain, however, is that electromobility is becoming a complex ecosystem. Different companies cooperate but are also in intense competition with each other.

Experts have revised their forecasts in 2017 in favor of a faster and wider introduction of electric cars

My impression in 2017: Electromobility is coming faster and more comprehensively than previously thought. For example, Bloomberg New Energy Finance recently raised its forecast for the share of e-cars on all vehicles sold in 2040 from 35 percent to 54 percent. Tesla founder Elon Musk and experts from BCG see the 50 percent market as early as 2027 and 2030 respectively (see chart).

A radical projection comes from the independent think tank RethinkX: They see practically no more cars with internal combustion engine being sold in the US market as early as 2024. Why? Because fleets of autonomous electric vehicles will dominate mobility in the future. By 2030, as many as 95 percent of the miles traveled in the US could be substituted by a corresponding Mobility-as-a-Service model. This means: combustion engines that were still in use then either rust in the front yard or end up in the junkyard for recycling. Will the way we are mobile really change so quickly and fundamentally? This is possible because coupled with autonomous driving, electric mobility is developing its truly disruptive potential.

Race of autonomous pilot projects

The first traffic signs for automated driving have been available in Germany since 2017 – on the Autobahn A9 north of Munich. The Federal Ministry of Transport and Digital Infrastructure operates the Digital Test Field Autobahn here. At the IAA Audi presented the A8, the world’s first production car for highly automated level 3 driving to international standards. In cooperation with Daimler, Bosch announced to develop a self-driving taxi that will be tested on German roads in 2018. Volvo is launching the first fully autonomous vehicles on the streets of Gothenburg in the ‘Drive Me’ pilot project in December. The company has also announced that it will assume liability if autonomously driving cars cause damage in the future. And in Singapore, Startup Nutonomy has been testing self-driving taxis for just over a year. This year Nutonomy was taken over by the automotive supplier Delphi. The plan is to develop a platform for Robotaxis. It also cooperates the alphabet company Waymo (emerged from Google’s Driverless Car Project), which filed suit this year against Uber, because Uber has supposedly stolen Google’s robotic car technology. These and many other examples show that the self-driving future is shining more in 2017 than ever before. However, the technology is still not mature and drivers are still skeptical about autonomous driving.

Mobility-as-a-Service: More mileage with fewer vehicles

Within ten years, the dominance of motorized individual traffic and the internal combustion engine could come to an end. Fleets of autonomously driving electric vehicles will then increasingly determine the street scene. In 2030, the providers of corresponding mobility services are to generate 40 percent of the total profit of the automotive industry, studies say. What does that mean? Different players in the mobility market conquer the income streams in an existence-threatening way.

  • Optimal capacity utilization means that significantly fewer vehicles are sold.
  • The maintenance and repair costs will decrease due to the lower number of vehicles, electrification and significantly reduced accident rates.
  • Since manufacturers and mobility service providers cooperate directly with each other, most dealers are threatened.
  • Gas stations are superfluous in their previous form.
  • Gas stations are superfluous in their previous form

What are you living on tomorrow? Your vision is your most profitable investment!

Much of the value added in the mobility sector will be different in the future. Many of my clients are currently discussing radical future scenarios for the automotive market. Most of the time, they realize that the business impact will be far more drastic than previously thought. A realignment of the strategy is needed.

The future strategies of all market actors – from suppliers to dealers and workshops – must address the potential of electric mobility and autonomous driving. Therefore, it is necessary to open new sources of revenue and to develop new business models. However, the high dispersion of forecasts also continues to show uncertainty in the market and thus the need to develop the assumptions behind the company’s strategy transparently, soundly and without prejudice. How is your situation? On what assumptions are your vision and strategy based? Are you really future-proof?

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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