How will WFH impact VKT?
How is the non-mobile situation ‘Working From Home’ (WFH) policy impacting average ‘Vehicle Kilometres Travelled’ (VKT)?
It is clear that the WFH revolution has enabled so many people and businesses to continue their activities during the COVID-19 pandemic. If this situation becomes more sustained in the mid-to-long-term future (for some a big IF) it will surely reduce the number of average vehicle kilometres travelled (VKT).
Urban vs rural mobility
In most large/mega-cities today, the majority of commuters do not drive to their workplaces. Instead, they use public transport, as traffic congestion and scarce parking availability effectively make driving ‘not an option’ for millions of commuters.
So, will the continuation of the WFH policies reduce VKT?
There might be regional variations in areas where we will see a VKT decrease as some EU countries do not have proper public transport. In many cities, some selected demographics may decide to ‘leave the dense city’ – which they perceive as dangerous and contagious – and move to more rural areas. But if cars are not necessary for commuting, and those who move out of the city now live in more rural areas – where vehicle usage is essential for shopping/medical/entertainment purposes – the VKT could potentially increase.
From the manufacturers’ perspective
On the vehicle manufactures’/mobility providers’ side, there has been a real battle to meet the EU CO2 compliance levels. As a result, 2020 was the first year that electric vehicles (EV) have finally become mainstream. Annual registrations of BEVs rose to 725,000 units, while PHEVs – which are also a vital strategic tool in meeting the latest fleet average CO2 targets – saw volumes achieved over 600,000 units, beating China, thus becoming the largest market for rechargeable passenger cars.
- Every eight passenger cars entering the European roads in 2020 was either a PHEV or BEV.
- In 2020, the slump in new car sales due to the pandemic contributed to PSA, Renault, BMW and Daimler’s results in achieving their CO2 compliance targets. While VW bitterly losing out due to launch problems of the ID.3.
Reports show that in 2021 we will see BEV market penetration increase – over 1 million cars in a recovering 12.3 million total West European passenger car market. Combined with PHEVs, the 2021 BEV market is forecasted to account for 15.5 percent of the market or just over 1.9 million cars – finally becoming a mainstream drive train solution.
Why is this interesting?
New mobility solutions are one of the hottest topics ever. And clients are obviously interested to better understand both consumers, retailers and other traders’ approach and interest in new mobility solutions such as mobility-as-a-service, bike-sharing programmes, electric vehicles lease plans, and so on.
Who is already using them? Who considers switching? What is the user experience? How has the purchase journey of various mobility solutions changed?
At ADK Insights, we continue to monitor emerging mobility trends and translate their impact on consumer behaviours, providing insights to help businesses future-proof their innovation.
To find out more about our experience and how we can help, please contact Nimrod, Dam or Rob.