Evolution of Automotive

Biggest disruption of Automotive

The automotive industry is known for its neccesity of combining all different capabilities like precise engineering, disciplined supply-chain management and creative brand management. Apart from this the automotive industry is now in a Van-Damme-spagat: In the one hand we speak about pioneering the e-mobilitiy and autonomous driving. And in the other hand we cant ignore cases of some automotive giants losing potential revenues due to simple reasons like missing after call follow ups of potential customers which is related to missing automated connections between the call centers and the sales teams. The automotive industry is now in its biggest disruption ever with electric, autonomous, connected and shared cars.

Evolution of e-mobility

The mobility has been through a rapid evolution within the last 100 years. The first “electrical bicycle” patent was applied by Ogden Bolton on 31st DEC 1895.The fascinating autoped of Lady Florence Norman in 1916 was the first scooter, a great invention with a hiccup of missing cultural, infrastructural readiness and low urbanization and it couldn’t survive. In 2019 if we speak about scooter we mean e-scooters of Silicon Valley unicorns which became a hype in 2018 and achieved a 17 bn USD market size according to GVR. So did also Thomas Parker invented the first electric car (EV) in 1884 and followed by the famous German “Flocken Elektrowagen” and Porsche`s P1. The story of the e-mobility is not new. The electric cars vanished also from the market until Elon Musk`s Tesla Roadster became famous in 2008. Tesla was not taken serious at that time but now the whole automotive industry is in its biggest disruption ever. What has been changed since? In the early 30s the oil industry created a good infrastructure with gasoline stations and e-cars were more expensive in comparison to fuel cars. Now as the world fights to reduce CO2 and there are more ways to produce electricity e-mobility has its chance. As there is since 2018 only 3.3 million units of EVs worldwide are in use according to statista, the industry is just in evolution.

World`s Electric Vecihle (EV) market development

2018 was the boost year of the EVs with 1.2 mln units sold which is 76% increase to PY according Jato which is nearly 2% of total sold cars. 60% of the EVs are sold in China followed by USA with 16% and Norway with 3.6%. China is anyhow leading the world car sales market with 30% market share followed by Europe with 18.3%, USA with 18%, Asia Pacific with 11% and South America with 4.5%. The EV share of the total car sales in China is 3%. The figures tell us that the car producers will have its focus with EV on big markets like China, US and EMEA. PwC Autofacts expect an ambitious e-car sales share of 55% by 2030 which would mean sales of over 40 mln EV cars. China has an important role in next gen mobility. The young and increasingly urbanized generation of China with an increase on income has a great technology affinity, very digitalized and will lead the transformation. Based on CNNIC report the fact that 788 mln people use mobile internet and over 43.2% of these people use car hailing app is again a clear sign of openness of China for new inventions.

Economic impacts of future EV market

Besides of the zero emission advantage of EVs there are also numerous critics.

Professor harald … silicium …

Tesla is the driver of the electrification with its top seller Model3.

After the diesel crisis the consumer became more aware of e-cars. The takeoff of Model 3 was a great success followed by two chines producers BAIC and BYD. The German automotive industry missed the first round to triumph the success of being pioneer. BMW for instance plans to launch 25 EV models until 2025.

The automotive giants new models?

More than 1/3 of the sold cars in 2018 was SUVs. There will be an interesting battle in the field of E-SUVs.

Autonomous driving on its birth-phase

The phenomenon of self-driving cars is with just 6.7 thousand units to be sold in 2020 at just in the beginning of its aera. We need to distinguish between the levels of autonomous driving from L0 to L5 where the functions and setup of AD significantly differ from each other.

There are not ignorable benefits of AD especially of Level5 to reduce road deaths and accessibility to a wider range of target groups (disabled persons, seniors and below 18). According to WHO 1.35 mln people die each year by road traffic crash and more than 20 mln suffer from non-fatal injuries with a disability as a result. 90% of the death accidents are caused by human failure and in low- and middle-income countries. Road traffic crashes cost most countries in average 3% of their GPD. These all could be tremendously reduced if AD eliminates human error risk and is accessible in low-income countries to a reasonable price with necessary infrastructure and regulations.

The future trend car owning or sharing?

There are nearby 1.3 bn vehicles in use around the world and each year approximately 96 mln are added. The new trend around the world within the young generation is using car sharing platforms instead of investing for an own car. The concept of car sharing is using a car on demand. There are two concepts: either you are a self-driver of a car (Zipcar) and pay as use in minutes/hours or you can be driven by a driver/owner of the car (uber). Before Uber went life, services like “Mitfahrgelegenheit” and Zipcar was used as a cheaper alternative in some markets by people who don’t own a car. Nearby 50% of carsharing programs founded between 1997-2009 went down due to low coverage and low profitability. Whilst Flexcar and equivalents weren’t profitable Uber has generated 50 bn USD in 2018 with 93 mln active users in 63 countries without own fleet and threatens somehow the classic taxi industry. Therefore, in some countries uber was even banned. Also the new gen of carsharing will grow via access to more resources as they are subsidiaries of automotive companies or car rentals. In 2019 BMWs DriveNow and Daimlers car2go are in a merger process which will create an additional advantage of a bigger international platform with 21k cars in 14 countries in 30 cities and over 2.5 mln users. According to Berkeley`s TSRC there are worldwide over 157k vehicles in 2095 cities with 15 mln users from which 58% are in China. Many forecasts predict an increase in car sharing in the next years. Didi Chuxing App (DiDi) with 550 mln users is dominating the Chinese market. Contrary to Uber DiDi integrates also other apps und is multifunctional. Recently DiDi integrated FAW Group`s and DFW`s ride-hailing service into its service portfolio. The meaning of these figures are that people will be more mobile than in the past and also the purchase appetite especially in urbans will be decreased.

Who does the future of mobility belong

While Tesla and other producers are shaking the industry as pioneers of e-mobility 52% of the autonomous driving (AD) patents belong to German companies. Bosch has 958 patents and is followed by Audi with 516 patents according to the research of Cologne Institute for Economic Research 2017. Therefore, the German automotive industry which seemed not being pioneer in the AD and e-mobility at its start, saved to being in forefront of global automotive industry for the future. None of the inventionists of silicon valley are among the key players not even alphabet could make it in the top 10. This is also an evidence of the reality that the expertise and huge industry experience is one of the core key success factors in an industrial disruption phase. The second round of the automotive disruption goes to the main automotive industry. Nevertheless, startups of today can be the global companies of the future if not an integrated part of the automotive companies. 26/07/2019