By 2030 more than 60% of the world’s 8 billion people will live in urban areas. This will significantly affect the ground transportation industry, that is already struggling to meet the current needs of consumers in urban areas. Car OEMs, governments, ride-hailing companies and even tech companies are now working to solve the fast approaching collapse in urban transportation. Urbanization and changing mobility trends have the urban mobility industry at the verge of forced revolution.
We are now witnessing completely new trends appear and evolve very quickly. Car sharing, e-hailing, ride-pooling, autonomous cars with vehicle-to-vehicle communication technology and completely reimagined public transport are some of them. Yet, there’s one trend, that is often overlooked, it’s micro mobility.
Let’s have a closer look at what micro mobility is and what role it might play in the transportation ecosystems of the future cities.
Micro Mobility refers to a brand new category of vehicles that are thought to become an alternative to traditional modes of transportation. There are currently two main types of vehicles: personal transportation solutions, such as E-scooters, E-bikes etc. and small electric cars with one or two seats, EVs.
Key passenger car OEMs have already entered the game and are now in the process of identifying consumer preferences for this forthcoming market by launching models in different sizes, with different number and form of wheels, and in different body types. Honda has announced an electric scooter EV-neo, GM has partnered with Shanghai Automotive Industry Corp. Group to develop EN-V (pictured below), an autonomous electric vehicle, that uses vehicle-to-vehicle communications to identify the shortest route available.
Current state of the micro mobility market shows that OEMs are introducing vehicles aimed at conventional car users, bike/scooter users and users that walk the first/last mile. The latter usage model is being covered by micro mobility products integrated with conventional cars. For example, Volkswagen is going to sell its electric bike Bike.e together with its cars, thus covering the first/last mile for car users.
Micro mobility vehicles industry is developing at a fast pace — Frost & Sullivan expects over 150 micro mobility models to be launched by 2020. IDTechEx analysts forecast that micro EVs and personal transportation devices market will reach over $33 billion by 2026. In 2013 the global micro EV’s market was expected to grow at a CAGR of 14.91% in 2013–2018, but already in 2016 Wise Guy Consultants’ analysts expected 17.26% growth during the next 4 years.
Although the market share of the micro mobility devices sector is not on the same level as the private electronic cars market, we note a positive dynamic of consumption of all micro mobility models. Frost & Sullivan researchers predict potential sales of 280,000 units of micro cars by 2017 in Europe (550,000 sales under the optimistic scenario). As for personal transportation devices, in Netherlands, for example, the number of registered vehicles raised by 43% over the period 2011–2014.
How such substantial transformations in the market could have happened?
First, consumer preferences are changing and businesses are striving to analyze and meet the new needs of the modern customers. Millenials are not the biggest fans of owning cars — this generation is buying their first cars much later than previous generations. For car manufacturers this means that the generation with the soon-to-be the highest buying power will buy less cars during their lives than previous generations.
More and more people in developed countries value non-materialistic things: environment, equality, social inclusion. We live at the time when new generation’s values finally start reflecting in their consumer behaviour: “Gen M is the generation that is strongly one with technology and has recently reached a level of financial stability and freedom in their lives” — points out the Meduim publisher Ansen Iyaloo (Project Administrator at Enabling Environments). There is no doubt new values influence the automobile industry. Thus, Mackenzie experts argue that more and more consumers “seeking a replacement to the tradition of individual, private car ownership”. The number of people who hold a driver’s license decreased by 5% (2000–2013) in the USA. In contrast, it is said in the Mackenzie report that the number of car sharing members in the USA and Germany has represented the annual increase for more than 30% (2011–2016). New generation prefers the fit-for-purpose mobility solutions. It means that private car is about to lose its monopolistic position under the pressure of the new mobility patterns: e-hailing, car-sharing, public transport. Being affordable, environmentally sustainable and socially inclusive, micro mobility modes of transport are becoming more and more attractive for millions of new young customers.
Secondly, the development of the micro mobility devices and micro cars industry is supported by the local authorities, especially in urban areas. Shortening of the in-city travelling distance, using private car alone (76.4% in the US), of the services in the downtown and high energy consumption encourage city managers and urban planners to find new smart solutions to manage the traffic problem. In that sense, small sized micro eclectic cars and personal transportation devices could be an attractive alternative to fossil fuel private cars. One of the cases of the successful promoting of the EVs and personal transportation devices could be found in Japan. Japanese government set a target to increase the EV’s market share up to 30% by 2030. It should be added, that micro-EVs were chosen as a prior mean of transport for the sustainable city of the future. To achieve this goal the government uses a wide range of policy instruments from financial and taxation tools to PR and information campaigns. In result, 89% of Japanese already tested micro mobility devices and interested in purchasing it. Analysts expected the Japanese micro mobility market to grow from 4000 units in 2013 to 190,000 units in 2020.
Finally, both micro cars and personal transportation devices are more environmentally friendly. In general, electric cars are more sustainable products (powered by renewable energy, have less carbon dioxide emissions). Nevertheless, the growing demand for the energy rises the question concerning the way of power production. The potential to achieve CO2 neutral mobility is highly dependent on the national’s energy production industry. Surprisingly, coal-based energy production can lead to the higher level of emissions compared to internal combustion engine technology car.
Summing up, micro mobility appears to be much more than a short-term trend, in fact, it’s a result of the strategic consensus of a number of different actors. It seems that fast-approaching urban transportation crisis along with a shift in consumer preferences will secure a place for micro mobility products in the mobility of the not-too-distant future.
by Artem Semenov
