Mobility megatrends

Automatic, electric, digitally networked

Today Detroit, tomorrow Beijing and soon it will be Paris again. The trade fair carousel spins fast in the automotive industry. The flood of new models is being driven by a few trends that all car manufacturers have to respond to: automation, electrification and digitalization. But the routes to the destination differ considerably.

Futuristic city cars with powerful electric motors and self-driving luxury sedans whose interiors resemble a living room. Take a look at the studies at the major auto shows and it’s hard to escape the impression that the industry is in broad agreement as to what the future of the automobile will look like. But guesses as to which technologies will prevail and how quickly are radically different – as, consequently, are the new cars that will be on our streets beyond 2020. Add to this the fact that legal requirements and customer desires in the major automotive markets of China, Europe and the USA continue to differ so widely that no manufacturer can develop a standard car.

In 2025, around every fourth new vehicle could be a pure electric vehicle

Manufacturer-specific strategies are most conspicuous when it comes to the electrification of the powertrain. These strategies are not driven by the market but by the legislature, which sets fleet limits for carbon dioxide emissions. In Europe, the limit will be 95 grams from 2021, which will be significantly tightened again by 2030. However, these limits only include emissions from the vehicle and exclude CO2 generated from fossil fuels used in power generation. Plug-in hybrid vehicles that can be charged from a socket but which have an internal combustion engine on board for longer distances, receive a bonus depending on their electrical range. Because electric driving is always calculated with zero grams of CO2, each electric vehicle sold makes it easier for manufacturers to meet their fleet limits.

So far, however, electric vehicles have led a niche existence, and not just in Germany. In China, often described as a pioneer in terms of electromobility, 507,000 customers opted for a “New Energy Vehicle” in 2016. This governmental designation embraces cars with both electric and plug-in hybrid drives. However, with almost 24 million newly registered vehicles, these sales represent a mere 2.1 percent market share. In Germany, alternative drive systems, including gas vehicles, had a market share of 2.0 percent according to the Federal Motor Transport Authority.

This should all change soon enough. New, cheaper rechargeable batteries, which can also be charged very quickly, should make the electric car attractive to a wide range of buyers. The industry is investing billions. In autumn 2016, for example, Volkswagen CEO Matthias Müller announced a battery-purchasing program worth 50 billion Euros. Ola Källenius, Chief Development Officer at Daimler, points to more than ten billion Euros of planned investment in the development of the electric sub-brand “EQ”. Both expect that in 2025 around every fourth new vehicle could be a pure electric vehicle. Even a good portion of the remaining 75 percent could have a smaller electric auxiliary drive on board. 

From 2019, Volvo aims to be the first manufacturer to electrify the entire fleet – a proclamation that has been widely misunderstood. The Swedish pronouncement also includes mild hybrids on a 48-volt basis, which sporadically assist the engine. However, due to inadequate power and battery capacity, these units are incapable of purely electric driving except during parking maneuvers. Like many smaller manufacturers, the Swedes are developing new vehicles from the outset in such a way that they can be equipped with either electric or combustion engines, or a combination of both. A model strategy of this nature allows a flexible response to changing markets but surrenders the benefits, especially in terms of interior design when a car is purposed from the outset solely for electric drives. But it is not just drives that will change in the future.

The “reinvention of the automobile” includes highly automated driving, perhaps even completely driverless.

Digital networking

The “reinvention of the automobile” (Daimler CEO Dieter Zetsche) includes highly automated driving, perhaps even completely driverless. Again, the strategies of the manufacturers differ less in their vision than in terms of the actual path they propose to take. For example, BMW is relying like no other manufacturer on long-term cooperation with its suppliers, right from the start. Launched with the goal of reaching automation Level 4 by 2021, more and more technology companies are joining the founding partners IBM and Mobileye. The alliance can thus now count Continental, Delphi and Magna as well as Fiat-Chrysler as members. 

In Level 4 vehicles, the driver can permanently relinquish control to the central on-board computer and deal with other issues, such as incoming emails. According to the experts, however, this will be possible on highways alone at the beginning of the next decade. At the same time, some companies, such as Volkswagen, are also working on platforms for Level 5 vehicles, which are completely driverless from the outset. Such cars are less interesting for private ownership than for robotic taxis and autonomous minibuses for urban transport applications. Vehicles of this kind would be used by mobility service providers, public transport operators and service companies such as “Moia”, which was founded by Volkswagen at the end of 2016.

In terms of the third megatrend, digital networking, the automakers are not even setting the tone. Whether operating concepts such as voice and gesture control or the use of new internet services while driving – most of the ideas that will be entering the car come from the major internet companies and have already been established in the living room or office. This does not mean that automakers cannot score points in this area if they quickly integrate something new into their own vehicles. This is because the car is not an easy environment for products and services in the field of consumer electronics. The necessary adaptation can sometimes be extremely difficult.

Just one example: Technically, it has long been possible to replace the car key with the smartphone, and it would not necessarily be any less secure either. But you can hand your car key to a neighbor to pick up the kids from swimming if he has nothing larger than a sports coupé of his own. Although passing on a digital key is not a fundamental problem for IT experts, it requires sophisticated and secure rights management. The fact that ten years after the launch of the iPhone new cars are still delivered with a key, shows how complicated the path is from idea to automotive reality.

Automated, electrified and digitally networked: the big trends for the mobility of the future are in place. But getting from the catchphrases to specific, noticeable improvements for the customer needs ideas. Ideas born in the minds of people passionately working on the mobility of the future.