Last week I participated in three urban mobility happenings: the Financial Time’s three-day ‘Future of the car Summit’; the ‘Annual Polis Conference’ (for European cities to discuss their mobility plans); and Autonomy and Siemens Advanta Consulting’s virtual workshop on how OEMS can avoid disruption. The three events left me with one burning question: what is the future of the car?
The European automotive industry is in deep trouble. Our virtual workshop was titled ‘OEMs Now or Never: How to Embrace New Mobility’ and panellist Dr Martin Koers – Head of the German Association of the Automotive Industry (VDA) – told us that car sales are down 16 million units this year. With reduced revenues, legacy auto companies have to make the most difficult transition in their history.
To survive they need to:
- Switch to EVs, which means lower margins and new competition
- Invest in expensive autonomous driving technology
- Build direct sales channels via the web
- Work out how to deal with Google and Apple now that the car is a new streaming platform for their content
But most importantly, they need to think about how their buyers will want to move 10 years from now.
Competing visions of the future of mobility
While toggling between the three events, what became very clear to me is that car makers, city authorities and commuters have very different visions on the future of mobility.
For the most part, automakers are imagining a future of connected, autonomous, electric cars floating through cities. The occupants can either drive or switch to autonomous mode, allowing them to continue their digital lives while idling in traffic. They hope that there will be enough renewable energy to power the factories, vehicles and data centres to be “carbon neutral” in the near future.
This is not the vision of European cities. They want to get people out of cars and on the streets where they walk, cycle, interact with each other and shop with local retailers who pay rates and taxes. This vision is encapsulated in the term “15 minute city”, coined by Carlos Moreno of the Sorbonne in Paris, where one’s daily necessities are within easy reach by foot or bike, making for healthy cities and citizens. Cities believe that they can achieve this vision by changing the infrastructure. Paris is spending €150 million converting roads to cycle lanes and will eliminate 70 000 car bays.
What urban consumers want is not easy to understand, as they are not homogenous. Micro-mobility is booming, thanks largely to e-bikes, and while car ownership is down, vehicle CO2 emissions are up due to the increasing popularity of SUVs – which now make up 50% of car sales in Europe. As the impacts of global warming continue to make the front page, consumers and corporations are starting to understand how to reduce their carbon footprints, pushing the demand for electric vehicles. But if EVs are individually owned, these resource intensive assets are so hopelessly underutilised that they are not much of an environmental solution, unless compared with their combustion predecessors.
Battle of the Brands: OEMs vs. Big Tech
Like most successful companies, leading OEMs were able to answer to our wants and not just our needs. The margins for the industry have always been in selling sports cars and SUVs to wealthy urbanites living in close enough proximity for their neighbours and peers to see them behind the wheel of an aspirational automobile. But when cars become yet another space to access the internet, brands will lose that relationship with the occupants to Google, Amazon, Facebook, Apple and Netflix.
How can automakers remain relevant to European urbanites in a warming world? It will not be easy, because resource-heavy vehicles will no longer confer status.
Listening to what European cities want from mobility
Elected city officials are largely motivated by what makes the lives of their voters better, in the hope that they will be reelected … and good mobility has now been identified as one of the key drivers to voter success. Paris’s anti-car mayor Anne Hidalgo won a second term because her anti-car position improved the lives of enough non-car owners. Many mayors around the world are wanting to emulate her success.
Listening to European automakers speak on the future of cars for the last few days, I got the sense that their vision was more about responding to Tesla and less about creating a compelling vision for improving mobility for billions of urbanites. While Autonomous connected cars are perfect for LA, where the one-hour commute can be converted into office or leisure time, it is not what European cities and their citizens want. For the car industry to stay relevant in Europe, it needs to figure out a way to contribute to the health and wellbeing of cities and citizens.
Key Takeaways From the Virtual Workshop “OEMS Now or Never: How to Embrace New Mobility”
4 Archetypes for Automotive OEMs to Position Themselves in the New Mobility Market
EV Enthusiasm Is Building Momentum in Europe – but Will it Last?