Denice R. Preston
The global automotive industry has recently experienced a slowdown in international sales. Despite a high level of consumer demand, however, sales fell significantly during the COVID-19 epidemic due to supply chain and other issues. However, sales started to rebound after 2021. Estimates suggest that sales numbers for 2023 will be below the totals.
The car market may be fluctuating. However, people aren’t necessarily more mobile. Incredulity for scooters and bikes (especially in urban areas with dense populations) indicates that alternative options are sought after. New trends are emerging, including micromobility first manufacturers of equipment (e.g., electric scooters, electric bikes, and e-scooters, etc.).) which are shifting to direct-to-consumer selling instead of B2B. The ubiquitous mobile sharing services (e.g., Spin and Lime) are also adjusting revenue models to meet the changing needs of consumers with monthly, daily, or even annual rental plans.
Other factors are responsible for a decline in the number of vehicle sales. For one, companies from diverse sectors and regions- typically outside the traditional auto industry- are making the ground. The automotive industry is more appealing to a broader group of investors, including venture capital firms, tech companies, funds, and private equity firms. New players dominate the amount of money invested in startups for mobility and automotive. Furthermore, new areas, including Asia, are increasingly crucial within automotive manufacturing.
A rising wave of technological-driven megatrends is changing the definition of mobility. The automobile product is evolving as electronics and software are increasingly important in their use within a car. They require skills not part of the conventional core competencies in automotive engineering. The software used by vehicles is expected to expand at a compound annually of 11 percent, which will amount to 30 to 70% of the vehicle’s value in 2030.
The Trends Transforming the Future of Mobility
The coming decade will see an array of headwinds that will alter the scope of mobility to new frontiers. Changing consumer needs are essential, with the industry progressively moving from an ownership model toward a Mobility-as-a-Service (MaaS) access model, especially for younger generations.
Social factors drive the development of MaaS – increasing cities, population expansion, and environmental challenges create favorable conditions. The need for new mobility models is to deal with these issues. It is causing the possibility that our current automobile-driven system of fossil fuel-powered mobility will eventually be replaced by a consumer-centric system powered by electricity.
Mobility is experiencing a dramatic increase in investment in the latest technologies, impacting the industry’s evolution. E-hailing (virtually the process of ordering transportation services) and semiconductors sensors and semiconductors are the primary areas of interest that all contribute to the creation of technology for driving assist systems and autonomous driving.
In general, the automotive industry has been a significant development driver because it combines different technologies, including mechanical, chemical, and digital. Cars are efficient data centers and are becoming increasingly a part of more extensive networks of mobility due to advances in processing power, the generation of data via cameras and sensors, and the availability of cheap data storage. For example, when we consider e-hailing companies and real-time data navigation systems (e.g., Waze), they provide practical and supplementary services that complement existing solutions for urban mobility.
The advancements in the field of connectivity advancements in payment technology, connectivity, and the use of gesture and voice recognition allow automakers to create new cockpits that offer new types of content and enable in-vehicle shopping, e.g., the in-vehicle electronic wallets that permit the purchase of goods directly from the vehicle. In addition, Vehicle-to-Everything (V2X) technology is gaining ground, providing a more comprehensive picture of a vehicle’s surroundings than traditional line-of-sight sensors (e.g., cameras, radar, and lidar), which makes it possible to detect connected objects in proximity.
The modular style will play a significant part in the next generation of mobility because of the shifting purpose of the automobile. Numerous automakers are offering multi-purpose concept vehicles that could transport people while also providing greater functionality for other functions, such as item delivery.
As technology for automotive advances, new use cases for electric vehicles (EVs) will emerge for the cars. Electric cars comprise just a fraction of the total worldwide automotive sales.
The proportion of EVs is predicted to grow because government regulations increase incentives to promote adoption. In addition, stricter emission and fuel efficiency goals at the national, state, and city levels are likely to persist, particularly within Europe in Europe and China. Additionally, the cost of producing lithium-ion batteries (the most widely used type is decreasing, which suggests the possibility of further advancements in the production and manufacturing of EVs. The gradual reduction in EV costs will eventually lead to widespread adoption by consumers.
Additionally, the mobility industry’s integration with electricity grids is gaining momentum. It is easier to access charging infrastructures, even if EV charging may cause local limitations and instability issues on power networks. In other instances, electricity companies are trying to utilize EV batteries to stabilize grids, which indicates that renewable energy sources are being more widely integrated into the incumbent grids.
In the near term, automakers face the challenge of selling enough EVs to meet strict fleet emission regulations and fuel efficiency targets while maintaining profit. This urgency is encouraging rapid transformation–automakers are investing in startups to expand knowledge and expertise and capitalize on change.
Startups are developing battery technology and creating charging infrastructures for residential and public use. BMW and Daimler invested in ChargePoint, a charging infrastructure startup ChargePoint, to aid in building charging networks that will support their electric vehicles. Volvo has also bet on FreeWire, which provides quiet power for mobile devices and rapid charging.
The first pioneer in the EV field was Tesla, the highest-valued automaker with an estimated valuation of $1.2 trillion. Tesla was estimated as worth 341 billion in the early 2023 timeframe, which is more than the majority of long-running OEMs in the world, such as General Motors, Ford, Toyota, and VW. This shows that investors and the market are adamant about innovation, as is the potential demand for electric vehicles and other related products.
Since its inception in 2003, Tesla has risen to the top of technology with its full line of electric vehicles at increasingly affordable prices. The company’s horizontal and vertical integrations into solar roofs and home batteries, as well as the wholesale power station that incorporates storage for energy, have increased its expertise, scale-up efforts, and social influence.
Autonomous Driving Will Reshape How We Move
The rapid advancement of automotive technology is expected to bring more security benefits with Automated driving systems (ADS), which could transform fully driverless vehicles into an actuality in the future of mobility.
Autonomous vehicles will gradually integrate six levels of technology for driver assistance in the next few years. The six levels vary from Level 0, which calls for a human driver to complete all driving tasks, to Level 5, where the ADS can perform in all situations. Intermediate levels ( NHTSA) still require human drivers to observe the surroundings and complete some tasks.
