The government announced this week their plan to ban all petrol and diesel cars by 2035. Motoring organisations have pushed back calling the move ‘a date without a plan’ as the consensus is the UK is largely unprepared to go all electric by this date.
It’s estimated by 2030, 55% of all vehicles will be electric, and 1 in 10 cars will be shared, which means current OEMs of petrol and diesel engine vehicles need to rethink their future strategies to ward off a steep decline in their core business.
What’s driving these changes?
Put simply, the next generation of drivers.
By 2030, we’ll be living in the EASCY world, but what does that mean?
EASCY stands for:
Electrified – Electricity used to charge vehicles will come from renewable sources to ensure carbon dioxide-neutral mobility.
Autonomous – Vehicle development will need no human intervention, reduce the use of public mobility platforms and offer individual mobility to new users.
Shared – Professionally managed fleets of shared vehicles will reduce the cost of mobility significantly.
Connected – Vehicles will communicate with other cars and traffic management infrastructures – and allow occupants to talk or surf the internet during their journey.
‘Yearly’ updated – Models will be updated annually to integrate the latest developments to meet the demands of shared fleet buyers.
With the heightened awareness emissions are having on our environment and advances in tech, younger drivers are demanding green, eco-friendly and cheaper options – with the current generation of car owners expected to be the last to consider vehicle ownership an essential.
And although the traditional combustion engine vehicle isn’t disappearing any time soon, the rise in electric and autonomous vehicles is going to cut deep into the core business of many leading manufacturers.
What will change?
Car-sharing is expected to increase substantially in the future, which means fewer people will consider a vehicle as a long-term investment. Instead, the costs may be shared across multiple users or paid in instalments as part of a per-use, on-demand service.
And with driverless automatic cars, consumers will be able to order or hail a vehicle and be whisked off to their destination as they work, browse the internet or keep in contact with friends and family without the distraction of a driver, or having to watch the road.
Current OEMs are not resting on their laurels particularly as upcoming businesses whose sole purpose will be providing electric and autonomous mobility options have exploded onto the marketplace.
Car-sharing agencies will also crop up, including:
- Online brokers offering consumers journeys in semi-autonomous and autonomous private cars
- Taxi services offering driverless services via an app
Agencies will also create and promote large car-sharing communities to veer consumers away from single-car ownership – and be the market leaders in the repurposing of lamp posts and bollards (termed ‘street furniture’) into on-street charging stations.
How the automotive industry is responding.
Although a decade or so away, alternative business models and collaborations between the biggest names in the industry are already in motion.
Joint ventures are already underway between BMW, Daimler, Ford, Volkswagen, Audi and Porsche to build high-power charging networks across Europe – with an estimated target of 5,000 charging stations offering home chargers, batteries and the sale of green power.
Plan now for a successful future.
Car manufacturers will have to decide in the next few years whether they wish to continue as a fleet or service provider and look to invest in the research and development of:
- Electric, semi-autonomous and autonomous vehicles
- Electronic vehicle software
- Autonomous car-share schemes
- Electronic charging stations, accessories and green power
The future will no longer be product focused, but rely more on offering mobility services, such as providing solutions for linking vehicle hardware and software. This could potentially open up new sources of income to compensate for the losses in a manufacturers core business – creating and selling cars.
By putting a plan of action in place now, there’s no reason the leading OEMs in the industry shouldn’t be ready when EASCY era arrives.