Wednesday 8 January 2020 - Although everyone seems to be looking for a sustainable solution to the current mobility problem, it seems that the peak in the number of cars is still to come. Between 2020 and 2025, the number of cars in the EU will increase from 269 million to 273 million. Only by 2030 will there be ‘only’ 258 million more cars in use. With the launch of the 2020 Autosalon, PwC's strategic consulting division, Strategy&, is looking ahead to the future of the automotive industry in its Digital Auto Report.
Peak expected in 2025
The number of cars in use will not peak in the EU until 2025. The absolute number of vehicles on the road is then expected to decrease significantly in Europe due to the shift from private cars to shared mobility solutions. While there were still 263 million vehicles on the road in Europe in 2018, this number will fall to ‘only’ 258 million (-2%) by 2030.
Smartphone on wheels
The shift in the automotive industry will mainly evolve towards a larger share of connected, autonomous and electric vehicles, especially in Europe and China. This is not only due to changing consumer behaviour or technological evolutions, but also as the legal framework around mobility and the emergence of electric or shared vehicles that is being shaped now by politicians and legislators.
The market potential for connected vehicles in Europe by 2030 will be €14.3 billion. In particular, 5G standards will stimulate the further development of vehicles towards a 'smartphone on wheels'. By 2025, about 30% of all connected vehicles in Europe will be 5G compliant; by 2030, they will account for 70% of the total network. By 2030, electric vehicles will account for about 40% of all new car registrations. Fully autonomous minibuses, robotic taxis and private cars will not be available on the road without further restrictions until 2029 at the earliest.
“In terms of autonomous cars, Europe is visibly lagging behind Asia. This is mainly due to the strict testing requirements that hinder further development. On the other hand, European companies do have the opportunity to specialise in the area of safety features in order. In addition, changing regulations are driving the introduction of autonomous and electric vehicles, such as tax incentives for the purchase of electric cars and the introduction of stricter CO2 standards,” says Fernand Dimidschstein, Strategy& Leader in Belgium.
New sources of revenue for car manufacturers
The study points to new sources of revenue for car manufacturers from alternative mobility solutions, for which the market volume in Europe will grow to €352 billion. This is particularly a reflection of changes in consumer behaviour. In Europe, on average by 2030, people will make 17% of their journeys with a shared car, slightly more than in the US (14%), but not yet at the level of China (24%).
“Few manufacturers currently provide mobility as a service (MaaS), are able to compete with private cars and at the same time are profitable for the manufacturers,” Fernand Dimidschstein, Strategy& Leader in Belgium admits. “We expect the market to be divided among a few global players, while many local players will emerge who will offer a specialised range of alternative mobility services,” concludes Fernand Dimidschstein.
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