Mobility presentation Light_2016-12
Thoughts on the Future of Mobility
Thoughts on the Future of Mobility Cornel Chiriac December 2016
Opening note The presentation includes thoughts on how the world is changing, what does the future hold for how people will move around and fulfil their needs for transportation and mobility. The presentation is built upon research by leading consultancies, aggregated and augmented with my thoughts on the topic. It is high-level and is meant to be presented in- person rather than read as a stand-alone, exhaustive paper. It is meant as a starting point - see the list of sources for in-depth reading. Cornel Chiriac Twitter @cornelchiriac Linked http://uk.linkedin.com/in/cornelchiriac
Mobility is changing Cornel Chiriac & Company 3
Trends Trends impacting local mobility Digital technology Macro Consumer behaviour Product innovation Cornel Chiriac & Company 4
Macro trends By 2030, 60% of the world population will live in urban areas The world’s megacities are set for major growth … and urban traffic is likely to deteriorate Population growth of the world’s top 15 megacities (millions, 2011 – 2025) Sources: Shannon Bouton et al., How to make a city great, McKinsey & Company, September 2013, mckinsey.com UN population division, World Economic Forum, Statista Cornel Chiriac & Company 5
Macro trends By 2030, more than 2bn people are likely to enter the middle class Global middle class is forecast to surge … … and with it the global car park is forecast to double Population, billions Global car park, billions 9 3 8 2.5 7 6 2 5 Poor 4 Middle class 1.5 3 Rich 1 2 0.5 1 0 2015 2030 0 2015 2030 Sources: EY; McKinsey “Urban Mobility at a Tipping Point, 2015”; The World Bank Joyce Dargay, Dermot Gately, and Martin Sommer, “Vehicle ownership and income growth, worldwide: 1960–2030,” Energy Journal, Volume 28, Number 4, 2007, pp. 143–70. Cornel Chiriac & Company 6
Digital technology trends Technology is eating the world 37% of global 30bn devices Virtual reality population will be and video will use connected by comms smartphones 2020 trends are up by 2020 Sources: Statista; Forbes; Ultra VR Cornel Chiriac & Company 7
Product innovation trends Car manufacturers and tech giants are rethinking the vehicle Powertrain Stronger and V2I and V2V Autonomous technologies lighter technologies vehicles have are maturing materials are part of arrived in response reduce new vehicles to the green vehicle movement weight Sources: Deloitte University Press “Future of Mobility 2016” Cornel Chiriac & Company 8
Consumer behaviour trends Consumers think, and behave, differently Generation Y Consumers “Work from Consumers is less wish to home” is on use delivery inclined to repurpose the rise more often own cars driving time to other activities Sources: Sivak, M., ‘Has motorization in the US peaked?’, University of Michigan Transportation Research Institute, June 2013; Global Workplace Analytics; McKinsey Global Institute Cornel Chiriac & Company 9
Trends summary The future of mobility is ‘green’ and ‘shared’ Digital technology __ Penetration of mobile technology and IoT Macro enable new mobility Consumer behaviour __ business models __ Congestion and greenhouse Consumer preferences shift gas emissions are on to pay-per-use mobility the rise causing and multitasking regulators to respond Product innovation while mobile __ EVs, lighter materials, connected vehicles, and AVs are here Cornel Chiriac & Company 10
Implications for OEMs Cars are the main mode of personal mobility in the UK 78% Source: Department of Transport, Transport Statistics UK 2014 Cornel Chiriac & Company 11
Implications for OEMs New tech enabled mobility models are emerging A multimodal mobility scenario could save consumers 30 - 60% per annum Source: McKinsey Global Institute Cornel Chiriac & Company 12
Implications for OEMs New business models could expand revenues by 30% Global vehicle sales will continue to grow The automotive revenue pool will grow by c.$1.5 trillion by 2030 Vehicle sales, millions Revenues, USD billions 140 8000 Recurring revenues - Shared mobility penetrates dense and suburban 6700 cities with new car sharing and e-hailing business 120 115 7000 models 10 New shared vehicles - >USD 100 billion from data connectivity services, 6000 1500 incl. apps, navigation, entertainment, remote 100 23 105 services, and software upgrades 87 5000 80 41 1200 Aftermarket 4000 3500 - Growth with increased vehicle sales 60 30 - Higher annual maintenance spend for shared Private vehicles 3000 720 vehicles - 20-30% lower maintenance spend on electric 40 2000 4000 powertrains 2750 - Up to 90% lower average crash repair per 1000 autonomous vehicle 20 0 One-time vehicle sales 0 2015 2030 - ~2% annual global increase in vehicle unit sales 2015 Urbanisation Fewer 2030 driven by macroeconomic growth in emerging and macro- private economies economic vehicles - Price premiums paid for electric powertrains and growth autonomous driving technology features Source: McKinsey Global Institute, “Automotive revolution - perspective towards 2030”, Jan 2016 Cornel Chiriac & Company 13
Implications for OEMs Four future states of mobility will coexist Autonomous Personal Autonomous car vehicles autonomy sharing _ _ 53% cost reduction 68% cost reduction 3 4 Assist Incremental A world of car change sharing _ _ Driver controlled $0.97 cost per mile 35% cost reduction vehicles 1 2 Personally owned Shared vehicles Sources: Deloitte University Press “Future of Mobility 2016” vehicles Cornel Chiriac & Company 14
Implications for OEMs The new mobility competitive environment is complex Traditional vehicle Mobility E-hailing and Car sharing manufactures providers mobility providers (e.g. Uber, Zipcar) Established Specialty OEMs (e.g. Tesla) OEMs and new entrants from the Technology Providers of mobility East (e.g. BYD) giants services, advanced safety, Emerging location-based services, in- OEMs vehicle content, and remote analytics Extended services to infrastructure (Smart roads Source: McKinsey Global Institute, “Automotive revolution - perspective towards 2030”, Jan 2016 and cities) Cornel Chiriac & Company 15
Implications for OEMs OEMs should partner with tech giants and expand into shared mobility END-TO-END SEAMLESS Expansion MOBILITY Satisfy customer’s emerging mobility needs better than 2 Uber and alike IN-VEHICLE EXPERIENCE Home turf Be better than other OEMs MOBILITY NETWORK & 1 DIGITAL Partnership INFRASTRUCTURE Integrate in the connected 3 world and participate in the new mobility ecosystem to facilitate better consumer experience Sources: Deloitte University Press “Future of Mobility 2016”; IBM Mobility Survey 2015 Cornel Chiriac & Company 16
Implications for OEMs In vehicle experience: Personal vehicles KEY FEATURES - Connectivity - Electrification - Autonomous driving - Other ‘Smart car’ features Sources: IDEO Cornel Chiriac & Company 17
Implications for premium OEMs ‘Social status’ could drive OEM-led premium end-to-end experience Social Quality of Quality of Cost status digital vehicle experience Sources: Board of Governors of the Federal Reserve System, 2015 Cornel Chiriac & Company 18
Summary Mobility is changing and opportunities for all are big - Mobility is changing as a result of urbanisation, green movement, digitalisation, product innovation, and consumer behaviour - Future consumer is likely to employ multiple modes of transport based on their needs and cost - The automotive revenue pool will add $1.5 trillion (30%) in revenues due to the growth in the shared services - There is a strong movement towards autonomous vehicles and shared economy but they require advancements in public and private sectors to be adopted en masse (e.g. regulations, smart city technology) - The competitive environment in the mobility space is becoming increasingly more complex and includes mobility providers and technology giants in addition to traditional and emerging vehicle manufacturers - The mobility leaders of tomorrow will innovate within their core competency, collaborate with technology giants, and embrace new business models Cornel Chiriac & Company 19
Appendix
Sources Mobility - McKinsey ‘Future of Auto Industry’ 2014 http://www.mckinsey.com/industries/automotive-and- assembly/our-insights/a-road-map-to-the-future-for-the-auto-industry - Deloitte ‘Future of Mobility’ https://dupress.deloitte.com/dup-us-en/focus/future-of- - Fortune on JLR http://fortune.com/2016/09/21/jaguar-land-rover-inmotion/ mobility/transportation-technology.html?id=gx:2el:3dc:dup1374:eng:cons:fom:dcpromo - Deloitte future of mobility: https://www2.deloitte.com/us/en/pages/about-deloitte/topics/future-of- - Transport stats in the UK mobility.html https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/489894/tsgb- - Forbes http://www.forbes.com/sites/danielnewman/2016/09/27/autonomous-cars-the-future-of- 2015.pdf mobility/#178610f6514a - Statista, growth of megacities https://www.statista.com/chart/1826/population-growth-in-the-worlds- - Atlantic accident reduction http://www.theatlantic.com/technology/archive/2015/09/self-driving-cars- megacities/ could-save-300000-lives-per-decade-in-america/407956/ - China middle class, McKinsey http://www.mckinsey.com/industries/retail/our-insights/mapping- - Wired https://www.wired.com/brandlab/2015/12/the-future-of-mobility/ chinas-middle-class - Ideo http://automobility.ideo.com - Global middle class growth, EY http://www.ey.com/gl/en/issues/driving-growth/middle-class-growth- - TechCrunch https://techcrunch.com/2015/08/08/understanding-the-future-of-mobility/ in-emerging-markets---entering-the-global-middle-class - Yahoo / Wolf predictions fro 2016 http://uk.businessinsider.com/michael-wolf-predicts-what-will- - IoT estimates http://www.forbes.com/sites/louiscolumbus/2015/12/27/roundup-of-internet-of-things- happen-in-the-tech-industry-in-2016-2015-10/#-1 forecasts-and-market-estimates-2015/#4224f05448a0 - Average driving time in USA - Statista, Smartphone penetration https://www.statista.com/statistics/203734/global-smartphone- - 2015 https://www.aaafoundation.org/sites/default/files/2015AmericanDrivingSurveyFS.pdf penetration-per-capita-since-2005/ - 2005 ABC poll https://www.reference.com/world-view/much-time-people-spend-driving- - Cheapest generation http://www.theatlantic.com/magazine/archive/2012/09/the-cheapest- f93af41f3f2605ea generation/309060/ - Average American time spent http://distractify.com/old-school/2015/01/07/astounding- - Work from home http://globalworkplaceanalytics.com/telecommuting-statistics facts-about-how-we-actually-spend-our-time-1197818577 - IBM Mobility survey http://www-935.ibm.com/services/multimedia/GBE03640USEN.pdf - Average American time spent http://blog.tempo.io/2013/7-time-consuming-things-an- - CB Insights https://www.cbinsights.com/blog/game-changers-mobility-and-transportation/ average-joe-spends-in-a-lifetime/ - CVC on mobility http://www.cvent.com/events/gcv-automotive-2016/event-summary- 1e70ceac75564e95b06bc6f9bb36f365.aspx?ReflD=ove - Tesla AR2016 http://ir.tesla.com/secfiling.cfm?filingID=1564590-16-13195&CIK=1318605 - Ford AR2015 http://corporate.ford.com/annual-reports/2015/index.html - McKinsey ‘Urban Mobility at a Tipping Point 2015’ http://www.mckinsey.com/business- functions/sustainability-and-resource-productivity/our-insights/urban-mobility-at-a-tipping-point Cornel Chiriac & Company 21
Implications for OEMs In vehicle experience: Autonomous delivery KEY FEATURES - Connectivity - Electrification - Autonomous driving - Delivery robotisation Sources: IDEO Cornel Chiriac & Company 22
Implications for OEMs In vehicle experience: Work-on-Wheels vehicles KEY FEATURES - Connectivity - Electrification - Autonomous driving - Office technology capability Sources: IDEO Cornel Chiriac & Company 23
EV tech annual global financing history Cornel Chiriac & Company 24
Mobility game-changers Sources: CB Insights Cornel Chiriac & Company 25
Mobility game-changers Sources: CB Insights Cornel Chiriac & Company 26
Mobility game-changers Sources: CB Insights Cornel Chiriac & Company 27
Mobility game-changers Sources: CB Insights Cornel Chiriac & Company 28
Rise of shared economy in business travel Uber accounts for 43% of business ground transportation Cornel Chiriac & Company 29
Cornel Chiriac Tech Investor @LondonVentureFactory and @Chicago_Angels LinkedIn http://uk.linkedin.com/in/cornelchiriac Independent consultant to startups and corporates Twitter @cornelchiriac