Four Key Takeaways about the Future of Europe’s Mobility Sector
Few other areas are experiencing as massive a transformation as the mobility industry. What does the future hold in store for car companies and other players?
By Mathias Entenmann, Managing Director and Partner, BCG Digital Ventures
If you told me as a kid that one day I would be able to open a random parked car with a device that could fit in my pocket, I would have been excited. If you also told me that the car wouldn’t belong to me nor would it run on gasoline — but I could drive it anyway — I would have told you to stop messing with me. This exact scenario is a reality now — and the future 25 years from now might seem just as unbelievable if someone were to tell us about it today.
But, that doesn’t mean we shouldn’t try to imagine the future of mobility or talk about our visions for the mobility space. I had a chance to do just that in a recent panel series held as part of the IAA Mobility Visionary Club, Pioneers of Mobility. Together with Nina Geiss of ViveLaCar (car subscriptions), Caterina Kiehntopf of Dance (e‑bike subscription service), and Julian Blessin from Speedinvest (venture capital investors), I had the pleasure of pondering the question, “What’s hot in the urban mobility and startup scene?”
Here are four key takeaways from our riveting discussion about what we can expect for the future of mobility:
1. We are just getting started.
The automobile industry, and the mobility sector as a whole, are in the middle of a total transformation. Think of the music industry 20 years ago, when Napster, the iPod, and MP3s turned everything upside down. The mobility sector will see similar turmoil — but that also means considerable opportunities for major players like car companies, tier-one suppliers, or public transportation providers and rail operators.
We’ve only seen the very beginning of electrification, and have just caught a glimpse of autonomous driving. There will be a big push toward sustainability and green forms of transportation as well as whole new classes of ownership models and shared mobility or micromobilty concepts. Some of those innovations are already being tested or even rolled out, but the best is yet to come.
2. Smart partnerships are key.
Established big players can’t weather this momentous change all by themselves and they’ve started to recognize the need to evolve in order to prepare for the future. At the same time, their established and very lucrative day-to-day businesses can’t be neglected. Thus, they have to find ways to innovate, which includes building and investing in more agile elements on the side. And that’s where startups come in and where we at BCGDV are bringing these two worlds together by fostering smart partnerships. There are many paths to choose from: Corporations can assist startups and accelerate them, they can approach M&A, or they can build their own spin-offs and allow them to work just like start-ups.
One more big wave of innovation, especially for car companies, will come with the metaverse. Moving to the next level of digital properties and digital existence within the world of Web3 is a step that might scare some traditional automotive executives. They’re used to physical objects made of steel, rubber, and aluminum, while in the metaverse everything will be virtual. But the opportunities are really big, and there are many great partnerships just waiting to be forged.
3. Cities and local governments also have to change — and they are.
Municipalities often have a bad reputation for being slow with innovation. But we should give them more credit. In recent years, we’ve seen various cities and metropolitan areas react very cleverly and quickly to changing demands on mobility. New bike lanes were opened, new traffic flows were established, new micromobility concepts are being allowed and tested.
Paris is a great example of a huge city that’s relatively quick on its feet, adapting to the rapidly changing mobility wants and needs of its citizens. London is another example. Some larger cities struggle with many different companies distributing free-floating e‑scooters and bikes that crowd sidewalks, often annoying pedestrians and leading to a resistance (and a bad reputation) of new mobility concepts in the long term. London has solved this by providing designated parking spaces for micromobility services and their scooters and bikes. When partnering with mobility startups, municipalities can also gain important insights from mobility data and thus better understand how their inhabitants move around. Amsterdam is a great example of success in this area.
4. Europe needs to catch up (and becoming bolder is the solution).
The mobility sector as a whole needs to reinvent itself, especially established car companies. And while some of them have already begun this journey, they need to do more, and quickly. European carmakers need to coinvest and start their own ventures. We would love to see the traditional car industry become more involved in this crucial space and form better and stronger connections to the European startup ecosystem — which seems to have understood the importance of multimodal mobility and changing ownership patterns.
Europe and Germany have achievements they can be proud of. There are more than 30 European unicorns in the mobility space, and Greyhound, a traditional US company , was recently acquired by Flixbus, a startup from Munich. But there is still more work to do. Compared to the US and China, Europe is behind and has structural disadvantages. Different languages, different jurisdictions and regulatory environments, and sometimes even different currencies, make scaling much harder.
These handicaps shouldn’t stop us, however — they just mean Europe needs to be bolder and more confident. It also means our regulators need to be braver. Europe needs more startup-friendly regulation. Whether it’s a question of taxation, employment compensation, or incentives for investors, there are many areas in which other jurisdictions offer an environment that’s much more inviting for startups — and the mobility sector couldn’t be a better place to start.
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