Mobility in Times to Come
The world’s immediate response to coronavirus has been to focus on the public health impact of the disease, followed by the realization that the economic damage may be long-lasting and decimating for many. Assessing the situation today however, return-to-normal still seems very far away. Among the first observations that became apparent during the initial stages of the global pandemic were the contradictions that the automotive world at large was faced with. Numerous governments around the world imposed very restrictive lockdowns, which led to heavily reduced car traffic levels. This encouraged large parts of the global population to embrace active mobility options such as walking or cycling. So while the ‘personally owned car’ was perceived as a safe place during the pandemic, its use also effectively reduced. With a noticeable reduction in road traffic accidents as a consequence.
This highlights a further paradox for the automotive sector: lower car usage implies that cars could potentially last longer and eventually require more maintenance and spare parts. It was also recorded that the lower traffic levels led to higher car speeds causing more wear and tear.
In many European cities, many may decide to ‘leave the dense city’, which is perceived as dangerous and/or contagious, and move to rural areas. But if the commute previously did not involve car usage and now they live in rural areas where vehicle usage is essential for shopping/medical/entertainment purposes, car ownership will increase.
End of car sharing?
The once-booming ride-hailing or car-sharing industry is currently facing its first global crisis. Recent Lyft and Uber financial releases suggest trip requests were down by between 75% to 80% respectively, with the ‘fear factor’ as a major factor in potentially derailing these success stories.
It is unavoidable that the growing reliance on personally owned cars will continue for the short- to mid-term, especially as vehicle manufacturers will be keen to exploit this opportunity for perceived safety and cleanliness.
Even though during the initial impact of the pandemic the oil price was historically low, future mobility solutions remain perfectly suited for electrification despite the COVID-19 outbreak.
EVs on the fall or on the rise, or both?
In the short term, some initial setback to EV penetration is expected (depending on geographic region and fuel-efficiency regulation) as the pandemic has increased indebted consumer levels, which challenge EV affordability. The further policy supports such as ‘green’ scrappage schemes could be necessary to further address this. But overall, the COVID-19 pandemic has led to improved air quality, less traffic, and more active mobility!
So gradually we should expect more consumers to put EVs on their shopping list in the mid-term.
One of the beneficiaries of this trend could also include the automotive sector, as the COVID-19 pandemic also exposed the vulnerability of the world’s manufacturing supply chain, and as the EV typically comprises significantly fewer components compared with more complex ICE vehicles, it could help to simplify the supply chain.
In all, it becomes clear that it is harder than expected to determine any lasting impacts on future mobility from the double-edged sword that is COVID-19.
Nothing is as it seems! The COVID-19 fear of contagion, followed by waves of infections and finally even with a return to some form of normality, the automotive sector remains vulnerable.
To know more about our experience in mobility, please contact Dam.