According to VentureBeat, the automotive industry is about to enter a new era: the rise of driverless cars, the proliferation of Uber effects, and the decline of cars using internal combustion engines.
For most of the 20th century, automobiles represented the cutting edge of modern technology, including speed, innovation, sexiness, personality, and escape. Many countries have established highway infrastructure and opened up more roads in rural areas in the name of connectivity. But just as Henry Ford (original car disrupter) changed the industry in the production of Model T cars in 1908, we are once again at a turning point in innovation.
The automotive industry that we are familiar with will not be able to survive in the 21st century. Some established companies will choose to follow electric cars, driverless cars, and sharing economic trends, but as today's emerging technologies lead us into new areas, many other companies will be left behind. The following three major trends will completely change the automotive industry:
- The electric vehicle ends the internal combustion engine
The new car you just bought is probably your last car with an internal combustion engine, because electric cars are rising. For many years, the general perception of electric cars was that they needed too much infrastructure support, and we were too dependent on speed and oil, which made the internal combustion engine ubiquitous.
But electric car technology has been around for many years, as detailed in the documentary "Who Killed the Electric Car (2006)". In addition to the oil lobbying issues outlined in the movie, one major obstacle to the large-scale adoption of electric vehicles is cost and efficiency issues. Until enough people buy it, the cost of electric cars will remain high. Many Americans still choose hybrid cars because gas stations in the United States are more common than charging stations.
However, the rest of the world has seen a shift towards electric vehicles. A study conducted by Nissan in 2017 found that in the past 40 years, the number of gas stations in the UK has dropped by 75%. The study estimates that by the summer of 2020, the number of gas stations will drop to 7,870, while the number of electric vehicle charging stations will increase to 7,900, an increase of more than 90%.
Countries like the United Kingdom and France have promised that by 2040, fuel vehicles will be banned from the road. In the United States, there are currently 23 plug-in electric vehicles and 36 hybrid cars on the market. Almost every major car manufacturer has publicly announced a major investment in electric vehicles in the next 10 years.
With the expansion of electric vehicle charging facilities, we will certainly see a change in car consumption habits.
For some people, the car is not just a means of transportation from point A to point B. It is also a symbol of status.
The car is fun and fast. This is the key reason why companies such as Tesla and BMW value the electric vehicle business so much. With the current development of electric engine technology, we believe that hybrid or electric vehicles should be as good as luxury cars and be equally comfortable to drive. As the sales of these luxury goods in places such as New York and California rise, more economical electric car options will also appear on the market.
For rational buyers who are not affected by the emotional appeal of Tesla or BMW, there is another perfectly reasonable reason for them to turn to electric cars. In the automotive life cycle, the total cost of ownership of electric vehicles is becoming the same as or lower than that of internal combustion engine cars because they have fewer moving parts and lower maintenance costs. The most important thing is that as demand decreases, the value of the resale value of the internal combustion engine car will begin to drop, and may even reach the point where consumers have to spend money to deal with it.
As an additional benefit, the growth of the electric vehicle market may have a significant impact on our reduction of the global carbon footprint.
- "Uber effect" of car ownership
Call services and car rental services have also changed our relationship with cars. Call service giant Uber was established in 2010. Its current business has expanded to more than 600 cities in 77 countries and regions. It is estimated that 10 million trips will be provided each day. If an app like Lyft, Zipcar, or Car-to-Go becomes easier, cheaper, and safer, does the individual still need to own a car? A 2017 study showed that car ownership rates are declining in areas where car service is available. In contrast, in Austin, the ban on Uber and Lyft meant that 41% of participants used personal vehicles to fill in the gaps, and 9% purchased extra cars.
The auto industry was one of the industries hit hardest after the collapse of the property market in 2008. The sales of the entire industry plummeted, and it took several years for major US automakers to recover. Although we have seen healthy growth trends in blind sales, the demographics of people buying cars have not changed since the collapse of the property market.
Since 2009 to 2010, the number of car-free homes has increased by 9%, and the average age of car buyers has increased by 5 years. If this trend continues, the baby boomer generation may become the last generation of people who embrace the car with all their heart. This will have a huge impact on the automotive industry in the next 10 to 20 years. The company will have to find new opportunities to attract the next generation of drivers and owners.
In order to adapt to this change, the automotive industry needs to find new business models, and existing companies have begun to seek some of them. Volvo recently launched its Care by Volvo subscription model for its XC40 model. Ford expanded its definition of mobility for Ford GoBike and increased investment in chariot service company Chariot, while other car manufacturers were Commit to cooperating with companies that threaten their survival.
Almost every major car manufacturer has a "mobile-as-a-service" program that typically wins customer loyalty by bringing all aspects of our digital life to the mobile experience. The idea is to strengthen our relationship with the car brand and at the same time surpass our habit of riding a particular car. As these initiatives are launched in the market, it is expected that there will be a large number of innovative experiments and unlikely partnerships.
- Employment and infrastructure changes
In February of this year, California became the first state to allow unmanned vehicles that are not supervised by human safety drivers to perform highway tests. This means that companies like Uber and Waymo are accelerating the introduction of driverless cars to the market. How these vehicles will affect our lives remains an open question. Researchers have explored the potential impact of these cars on cities, infrastructure, business models and employment, but we are more interested in how they will change our daily lives.
Although delivery and taxi services appear to be the most obvious applications for driverless car fleets, car ownership offers another opportunity. Perhaps people will still buy driverless cars to maximize their working hours during commuting. Or, parents will buy a driverless car to help you run errands and pick up children, or spend more time on the road with your children.
In addition to these advantages, driverless cars may become independent living sectors, especially for the elderly and the disabled, it may be a true gospel. Internet services from food delivery to e-commerce have had a profound effect on those who cannot drive or who are difficult to move without help. Imagine if your local supermarket, shopping mall, health clinic, restaurant or church can send you a driverless vehicle to pick you up and then send you home without assistance or assistance from the service person. What will happen?
There are many opportunities for those who are willing to follow the fast-paced technological advancements in the industry. Some changes will bring benefits, such as increasing accessibility, reducing congestion commuting, and mitigating certain environmental challenges. By adopting a people-centered design, we can even push the automotive industry to a new level of dream, a dream that is environmentally friendly for all people. The transition period allowed new companies to enter the market and reshuffle the value chain. This is a time of radical redesign, not just for cars, but for the entire industry.