Among the first observations that became apparent during the initial stages of today’s global pandemic were the contradictions that the automotive world at large was faced with.
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The popularity of electric vehicles is not limited to four wheels, but has also embraced two. E-bike sales have been growing rapidly in recent years. But what will be the future?
It’s never good news when sales results do not follow launch success. Finding what cause this gap could make a difference in manufacturers’ future development efforts.
As EV sales continue to increase, car manufacturers are planning to launch hundreds of new models in the next 5 years. Here the big question arises: How to successfully launch your EV in an immature market?
Electrical vehicle (EV) sales worldwide grew by about 61% CAGR from 118,000 in 2012 to over 2 million in 2018. However, even though the global automotive landscape is gradually shifting towards electrification, there are still some countries with slow EV market growth.
Over the years, governments have taken various steps to support the shift towards electrification. Here are some policies which are currently being enforced to encourage adoption of electric vehicles:
Limitation on the availability of ICE vehicles license plates
Some regions enforced total or partial exemption for low-emission vehicles (incl. EV) from increment control measures restricting the availability of license plates in urban areas.
Interestingly in China, a license plate for ICE vehicles could cost more than the vehicle itself because of the lottery system the government implemented. In contrast, EV licenses are given through a queuing system, which makes it easier for people to get a license. No wonder they are the largest growth contributor to global EV sales.
Exempt from access restrictions to urban areas
These measures take the form of access allowances, which are granted only to vehicles that meet strict exhaust emission standards. Such measures have already been widely applied in European cities, along with exemptions from other road space rationing measures, such as alternate-day travel based on license plate numbers.
Exempt from usage fees for specific portions of the road
One of the most iconic measures of this nature has been announced by London. It consists of the Ultra-Low Emission Zone (ULEZ), set to come into force in 2019 or 2020 at the latest. The ULEZ is an area in central London within which all cars will need to meet exhaust emission standards (ULEZ standards) or pay a daily charge to travel.
Dedicated parking and access to charging infrastructure
Electric car support measures relative to dedicated parking and public access to charging infrastructure are generally best implemented either at the local or municipal level or via private actions.
Allowing access to bus or high-occupancy vehicle (HOV) lanes.
Measures favouring EV access to the road network over ICEs can have a sizeable impact not only on the increased short-term value of electric cars (imputable to greater usage opportunities) but also on the economics of electric cars over time.
The automotive industry is currently undergoing an exciting transformation which could bring a significant impact to the tyre industry.
It’s an exciting time in the world of car manufacturing and mobility. Car makers worldwide have been gradually shifting direction to keep up with technological development and emerging consumer sentiment. Many in the automotive supply chain have been racing to develop autonomous driving features to make the drive-less car a future reality. The market size for autonomous driving features is predicted to grow up to 26 billion USD in 2025. It may be that the realization of fully drive-less car is not too far ahead.
We believe that the future of mobility is not to own an autonomous vehicle, but rather we see a movement towards autonomous ride-sharing communities with greater flexibility.
Worldwide car sales continue to slow down (declining by 7.2% from 2017 to 2018), whilst ride-sharing services are gaining in popularity each year with companies such as Uber and Lyft as market leaders. From Uber alone, global gross booking for ride-sharing services reached 14.17 billion USD in 2018. Furthermore, the ride-sharing industry is expected to grow from 15 billion USD in 2014 up to 335 billion USD in 2025. In the not so distant future, fewer people will choose to own a car and more will opt-in for ride-sharing services.
Why is this interesting?
This trend will not only impact auto-makers, but will also force ride-sharing providers such as Uber and Lyft to compete. Competition and profitability will be a tension within the ride-sharing service providers, but predictions are that after the initial development costs, the commercial viability for the ride-sharing service providers is positive.
To find out more about our experience in the mobility industry, please contact Dam.
Connected technology is getting into more and more aspects of today’s living. After home automation, vehicle-to-everything is the next emerging trend to watch.
Vehicle-to-everything (V2X) is paving the way for connected cars and future fully automated driving. It is the future of the transportation communication system in which all vehicles and infrastructure interconnect with each other – traffic flow, motor vehicles, and other road users. V2X enables better automated piloting and intelligent traffic control by providing real-time information on speed, route, acceleration, and other driving factors.
There are two main benefits to expect:
- Accident-free driving
V2X technologies enable vehicles to automatically pass along messages regarding road conditions, traffic flow and obstacles, before they appear in the driver’s visual range.
- More efficient transportation
V2X technologies help drivers or automated vehicles to optimise speed and reduce fuel wastage. As vehicles are connected to the transportation infrastructure, they can give suggestions to drivers to re-route in case of traffic, reducing congestion and enhancing the travel experience.
Why is this interesting?
To make V2X a reality, large numbers of connected devices and good content caching technologies are needed. But huge technology-driven innovations are still necessary to create fully V2X capable vehicles.
The transition period for V2X vehicles could be a challenge, as V2X vehicles will need to co-exist with non-V2X vehicles until consumers are fully confident and comfortable with the technology.
Auto-makers need to keep operations running smoothly while driving innovations in ways that still engage and excite their consumers.
If you’d like to know more about future mobility trends, please contact Dam.
With a population of almost 1.4 billion people, China is one of the largest markets for car makers. However, despite being the world’s leading car producing country in 2015, car sales in China have been experiencing a market slow-down.
After 10 years of rapid growth, Chinese car sales took a turn and declined in 2018. Approximately 23 million new passenger cars were sold during the year. This number is even lower than 2016 sales which amounted to 24 million units sold.
One of the reasons for this decline in car sales might be the China’s cooling housing market. It seems that there is a strong correlation between buying a new house and buying a new car for Chinese consumers. Since fewer people bought a new house, there was also less demand for new cars.
Another reason for this decline could be the change in Chinese consumer behaviour. The second-hand car market is now an attractive option for Chinese car buyers. Despite still being image-conscious, Chinese car buyers are starting to realise that few people on the streets can really tell the difference between new or second-hand cars. More people are seeing cars as no longer a luxury or status symbol, but only as means of transport. It is predicted that by 2020, second-hand car sales will surpass new car sales.
There are many other factors that could affect the Chinese automotive industry. Let’s not forget about developing trends such as ride-hailing and car-pooling, which could also bring opportunities and threats to the market.
If you’d like to find out more about our knowledge in the automotive industry and Chinese consumers, please contact Nimrod.
Car manufacturers are facing a big shift in the way that people view car ownership and in the basic interest people have in owning a car. The trend is most pronounced and growing fastest amongst the millennial generation – the group that car manufacturers might have looked to traditionally as their future market.
In 2017, a KPMG study for Business Insider Intelligence has even predicted that by 2025 over 50% of people believe that half of today’s car owners will no longer want to own a car. It’s a massive shift and in an industry that plans years ahead a stark warning for fast changing consumer sentiments and behaviours.
Millennials are identified as leading this new trend. As this groups comes to maturity and moves to the city in search of work, they are adopting lower cost, resource-sharing, and more convenient on-demand services. Two key factors are also seen to influence their choices:
- Public transportation is getting better
More and more people are using public transport. In the Asia-Pacific region, 2.29 billion more passengers used public transport from 2016 to 2017 alone. As smart and connected cities evolve, we are anticipating further transformation of the transportation system, improving connections and convincing more people to abandon the personal car as a preferred option.
Ride-sharing has been growing rapidly over recent years. While driving and owning a car is still enjoyable, it also means paying for fuel, insurance, maintenance, and repairs – all of which require a large chuck on the household budget. We believe that millennial consumers will opt for ride-sharing services more and more for the on-demand convenience and low-cost.
Contact Dam to find out more about our automotive experience.
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