The KPMG view of future mobility
As automotive manufacturers, suppliers, and service providers are immersing themselves into the world of future mobility, the wider environment is looking on with interest. One company that is investing a great degree of time, money, and resources into analyzing the future is KPMG.
For the future of the automotive sector, KMPG says that one way to imagine the year 2030 would be complete bans on gasoline and diesel passenger vehicles in certain areas, more ULEVs, a hydrogen and electric bus network, and the elimination of car accidents and deaths on the road, thanks to the advent of autonomous vehicles (AVs).
“This is a utopian vision, but describes the potential outcomes of the disruptions that KPMG and others have been tracking for over five years,” explained Charlie Simpson, Partner and Head of Mobility 2030, Global Strategy Group at KPMG. “What we can say now is the scale of disruption across automotive, energy, and logistics throws up high opportunities as well as challenges and demands changes in behavior from all of us.”
KPMG has worked with OEMs to help reimagine their EV and AV strategies and also with oil companies as they look to move into the charging world. With the ever-changing and growing theme of MaaS (mobility as a service), it has also reached out to financial institutions to help them understand where investable propositions are. “Our clients are coming to us asking important questions about how quickly the changes will take place and how quickly consumers will have to change their behavior and adopt new AV/EV solutions,” said Simpson.
“We are going through the biggest transformation in the market for a generation, driven by connectivity, autonomy, MaaS, and electrification. It also encompasses the introduction of hydrogen and natural gas, which have had benefits in Asian markets such as Japan and South Korea,” explained Christophe Domke, Director of Mobility 2030, Global Strategy Group, KPMG.
KPMG’s research indicates that, in the case of an electric, connected, autonomous, and shared vehicle, cost per mile will decline by 40%, thus completely transforming business models. “What has also changed is the needs and attitudes of customers as well as regulations,” said Domke. “In our KPMG automotive executive survey, we interview 2000 people around the world on how they see the areas of future mobility, transportation and the automotive industry progressing. In this year’s survey, we found that up to 50% of consumers do not want to own a vehicle by 2025. The survey also said that 73% of public transport will be replaced by on-demand AV pods in 10 years’ time.”
Simpson says that, despite their challenges, the major car companies will remain at the heart of the industry for the foreseeable future. “There is a huge amount of anxiety in the auto industry, which isn’t surprising because future mobility throws 100-year-old traditions based on engineering excellence into considerable uncertainty. The value is now in the service, not the metal,” he said.
There are five calls to action for those who want to compete and survive in the future mobility world, said Simpson:
Firstly, they need to decode the nature of disruption. We believe that, for all companies involved, this it is a leadership role and about leaders deciding where they position themselves in the ecosystem.
Secondly, it’s about customer experiences. We, as customers, will transit if it is cheaper, cleaner, easier, and more fun. The winners will be the ones who focus on that customer experience.
Thirdly, it’s about understanding assets. In the energy and automotive sectors especially, there is a lot of capital invested in assets that will no longer be relevant in a mobility world. The ability to pivot these business models is going to be critical.
Fourthly, the analogy is that we see data as the new oil in the mobility system,” said Simpson. “Huge potential volumes and the major ingredients of success will be those who capture, structure and monetize the valuable data.”
Finally, Simpson said the key is to understand scale. The past four or five years have been pilot level, experimentation of technology and concepts. We are now at the point where the winners are scaling up the size of their bets and we would encourage businesses to lead on this. It requires bold decisions and investing on a scale outside of their core business—and that requires real leadership.