7 Mobility-Trends for 2019
Electric mobility will continue to be a hot topic in 2019, but in its wake some other innovations with disruptive potential will influence the market.
Change in mobility has always been present. But today, environmental pollution, the diesel crisis, urbanization and digitization are accelerating developments in the automotive and mobility industries. The change is visible in the Trends for 2019, which will have a strong impact.
In 2014, Toyota launched the first hydrogen-powered production vehicle on the market. Emission-free output like an ordinary electric motor, range like a fuel engine and a refueling time of only 3–5 minutes. This is what distinguishes hydrogen vehicles. So far, the high costs are a problem, but they are currently falling and will continue to do so with the start of mass production. Andreas Friedrich, head of the department for electrochemical energy technology at the German Aerospace Center in Stuttgart, where hydrogen has been used for decades, stated: “As soon as mass production begins […] significant savings can be expected”.
The selection of vehicles is still very limited, but new models are entering the market, such as the new Hyundai Nexo, which exceeds the range of its competitors, with almost 600 km. To drive the technology forward, Hyundai Motors Group has partnered with Audi for cross-licensing, including other companies of the groups. Toyota would also like to go into mass production and launch more models in order to benefit from the resulting lower costs.
Fuel technology is considered the №1 trend in the automotive industry and 78% of experts believe that fuel cells are the real breakthrough in electric mobility. Already in use in trains and trucks, it is estimated that by 2030 hydrogen will be used in all modes of transport except cargo ships and aircraft.
Connected cars, which link up with the smartphone or one’ s own home, have already been available for several years. But the connectivity with regard to the surrounding area and other road users (Car2X) for the realization of autonomous driving functions will be further expanded and spread in the future. The market potential of autonomous driving functions will rise to almost €36 billion in the next two years, the strongest increase among connected car services.
This results in new data driven business models, that offer enormous potential for new revenue streams. By 2025, 75% of cars in China, the USA and Europe will be connected. As manufactures become more and more similar in terms of quality of engine performance and equipment etc., connectivity services will be the true differentiator. The services are in high demand: 80% of German customers would pay for digital services and moreover vehicles without connectivity will be perceived as increasingly unattractive for customers. The data collected in the services relating to safety, navigation and infotainment will offer great added value through data sales and customer personalization and will push automobile and technology companies.
Intelligent driver assistance systems and connectivity are essential for the rising technology of autonomous driving, which will take over more than 40% of the driven kilometers in the EU in 2030. Connectivity is thus the new baseline in the automotive industry without new innovation concepts could not be implemented.
Autonomous vehicles have a significant impact on the mobility market. Almost all car manufacturers have already published plans for self-driving vehicles. Some autonomous cars are already being tested, such as by Waymo. By 2030, 25% of all new vehicles will be at automation level 4 or 5 — meaning a significant increase in market share. Autonomy takes shared mobility to a new level, as vehicles can pick people up on their own, extending their reach and target group.
At present, the industry is forming unexpected alliances: Manager Magazin reported that car manufacturers and suppliers (to date VW, BMW, Daimler, Bosch and Continental) are collaborating to develop a joint system for autonomous vehicles and are currently discussing how they can effectively pool their resources. At the same time, the joint venture of ZF and e.Go Mobile wants to start mass production of their electric e.GO Mover this year. These electric, autonomous minibuses would be ideal for emission-free mobility as a service. According to forecasts, the use of shared mobility with Robo-Taxis will increase sharply and almost half of Europeans would abandon their own cars, if attractive offers emerged. Shared mobility with autonomous cars could substitute many cars and thus relieve the burden on the environment. The impact on mobility on a macro level is large and should not be underestimated.
The automotive world has turned towards convenient individualization, starting with the well-known online configurator. But the desire for personalization has not been satisfied yet. With 3D printing, early prototyping can be realized, and moreover the car can also be individualized to personal preferences at an entirely new level. Using apps, customers can create their own personalized car, simply by using their smartphone.
In addition, Cloud Computing, Big Data and AI enables personalization across vehicles by analyzing the driver and learning from his preferences and behaviors, so that depending on the situation, mood, etc. an automatic adjustment to personal needs can take place.
Not only in terms of production and use the importance of personalization increased. Also in terms of business models, the focus is shifting away from the traditional vehicle sales approach towards new personalized offerings. Flexible leasing or car subscriptions, where the ownership periods depend on the preferences of the customers, are examples for such models.
Thus personalization is one of the key factors for customer satisfaction and should therefore be considered as a core element of any product development strategy.
The influence of car sharing and other sharing services is already noticeable. Younger generations are finding the pay-per-use offers appealing. Expensive acquisition, maintenance costs and the associated long-term commitment reduce the attractiveness of buying a car. One price for all costs including insurance, maintenance and taxes in one flexible contract is marketed as the unique selling point of car subscription models. Via an online platform or app, a car can be rented for a certain period of time (usually monthly) at a fixed rate, the vehicle model can be changed, and the contract can be canceled or extended.
There are already some vendors who are adopting this business model. FlexDrive and Fair, for example, are represented in the USA. In Germany, E-Flat has positioned itself, offering exclusively electric vehicles. The online platform Cluno, on the other hand, offers a wide range of different vehicle models. To expand its offering, Cluno has already received a $28 million investment this year. OEMs are also experimenting with car subscriptions. Premium manufacturer Porsche offers some of its vehicles in a subscription model in Atlanta. Care by Volvo got introduced, but with a minimum term of 24 months. Almost half of those under the age of 30 would consider such a subscription. Car manufacturers should therefore concentrate their approach especially on flexible business models that are affordable for younger generations.
The number of kilometers travelled per person is rising steadily and 57% of the traffic volume in Germany is caused by cars. The resulting traffic jams, noise and air pollution are highly problematic and trigger a paradigm shift in favor of car-less mobility solutions. Especially for the First and Last Mile Micro Mobility solutions such as e-scooters, e-skateboards, hoverboards etc. are well-suited. Investors, including Uber and Google’s Alphabet Inc., are confident about these new modes of transportation and have already invested more than $900 million in scooter companies in 2018. Big players in this field are the companies Bird and Lime, which are represented internationally. Founded in 2017, Lime itself is available in 18 countries with e-bikes or e-scooters and is valued at $1.1 billion. Also the e-scooter sharing startups Wind Mobility and Tier Mobility from Berlin recently collected €20 million each from investors. Even the OEMs would like to enter the market. BMW, for example, is planning to distribute its X2City pedal scooter from February on.
In many countries e-scooters are already in use, but in Germany they are still not allowed in traffic. However, things are about to change: from the beginning of this year, approval will no longer be a problem, as a new regulation will allow the use of this new category of vehicles. The scooters are allowed to have a maximum speed of 20 km/h and can only be used publicly with insurance, a driving license and a minimum age of 15 years. Also electric skateboards and similar driving devices without handlebars should be allowed to be used with an exemption regulation. A major step towards a car-free city.
Usage of sharing models is already spreading, especially among the younger generations. In recent years, a constant increase in revenue has been observed and the number of ride sharing users in Germany is expected to rise to 5.6 million in 2019, compared to 4.9 million last year.
In addition to the car sharing and ride hailing offers of Car2Go, Uber and Lyft, on-demand ride pooling services are becoming more and more present on the market. This concept, where several people with similar routes are picked up from a single vehicle and an algorithm calculates the most efficient route, is already being tested and implemented by several providers. Ioki of the Deutsche Bahn, allygator shuttle or Berlkönig are services that can be used in Hamburg or Berlin. Volkswagen is also involved — their MOIA service is already in operation in Hannover and should also be available in Hamburg in April of this year.
Predicting demand through technologies such as the quantum algorithm newly developed by Volkswagen and the computer company D-Wave to efficiently control vehicle use, creates additional potential for on-demand solutions. The ultimate goal of on-demand services is to eliminate the need to own a car and to free cities from congestion.
Sources: KPMG, McKinsey & Company, Universität Stuttgart Institut für Automatisierungstechnik und Softwaresysteme, strategy&, PwC, mm customer strategy, Berylls Strategy Advisors, Kienbaum, International Transport Forum, BMVI, Statista, Puls Marktforschung