KPMG: Now is the time to seize the mobility revolution
How you can seize the benefits of the mobility revolution during the next decade is the focus of a comprehensive report from consultants KPMG.
According to KPMG, the mobility landscape is undergoing one of the most transformational social, technological and economic shifts of a generation, shaped by three key disruptive forces:
- Electric vehicles (EV) alternative powertrains
- Connected and autonomous vehicles (CAVs)
- On-demand mobility-as-a-service (MaaS)
“The winners are likely to be those that can understand the impact and timing of disruption and seize the right emerging opportunities. This means swiftly adapting business and operating models and securing the right partnerships and acquisition targets,” says KPMG.
According to the report, Mobility 2030: Transforming the mobility landscape, taken independently, EV, CAVs and MaaS, would disrupt the ecosystem; but in combination, they should drive unprecedented change.
“As the mobility ecosystem evolves, its global value is forecast to grow to more than US$1 trillion by 2030,” predict KPMG. The report offers an insight into each of the three technology-driven disruptive trends in terms of timing, impact and implications for market participants.
Trajectory of electric vehicles
With future bans announced for internal combustion engine (ICE) vehicles across the world, original equipment manufacturers (OEMs) have little choice but to adapt. The report highlights that Volvo has pledged to manufacture only fully electric or hybrid models by 2019.
According to scenarios for forecast for UK passenger EV growth (% sales) it is predicted to rise from 9% in 2020 to 69% by 2030 and 94% by 2040. Scenarios for forecast UK LCV EV growth (% sales) is predicted to grow to 57% by 2030 and 91% by 2040.
In its strategy paper The Road to Zero, the UK government reaffirmed its proposed 2040 ban on conventional cars, setting a clear direction and aligning itself with similar commitments in France, China, Norway and India.
“The benefits case for EV adoption is clear: cleaner air, quieter streets and a chance to meet global carbon emissions reduction targets to address climate change,” commented KPMG.
“Governments also see an opportunity to stake a leadership position for domestic industries in the emerging EV value chain. Overall, this is a promising start, but progress depends upon continued collaboration from the various ecosystem participants.”
Four methods of Mobility-as-a-service (MaaS)
MaaS is an evolving concept of how consumers and businesses move away from vehicle ownership towards service-based transport which includes multi-modal aggregation of transport modes as well as on-demand mobility.
- Multi-modal MaaS aggregation
The report highlights how customers can travel on different modes of transport (from different providers) via one payment platform.
MaaS Global operates a platform in Helsinki, Finland, and is also trialling a scheme in the UK. The company has developed a travel product called Whim with a monthly subscription. Customers can plan and pay for individual journeys via train, bus, taxi, car-rental and bike-share on a single app.
“There is also a huge opportunity for MaaS to replace company cars, although this will require significant shifts in tax policy,” commented KPMG.
- Car subscription services
Flexible monthly contracts accessed online are replacing personal contracts or long-term leases.
“With consumers increasingly tempted to forgo personal vehicle ownership for more flexible access, subscription services could be a ‘middle ground’ for those who still want full-time access to a vehicle and flexibility to change models or ‘pause’ their usage,” says KPMG.
- On-demand mobility
Demand-responsive, private hire car providers are growing in popularity. A prominent example is Uber, introduced to the UK in 2012, which recorded over 20 million journeys in its first four years.
“However, ride-hailing is not the only on-demand model. We have seen sustained interest in car-sharing schemes, such as BMW’s DriveNow. Penetration of such services is only expected to grow further with the advent of autonomous vehicles (AV), with an associated pronounced decline in vehicle ownership, particularly in urban areas.”
- Commercial vehicle innovation:
While passenger transport is the focus, commercial vehicles should not be forgotten, given the significant economic impact. There is innovation in business models – with the rise of peer-to-peer logistics platforms and consignment sharing – as well as new modes like drone delivery.
“We believe the true step-change will come as mobility services are coupled with driverless technology that enables an integrated and automated transport ecosystem,” commented KPMG.
Rise of connected and autonomous vehicles (CAVs)
The emergence of CAV, supported by new technologies and a maturing digital and physical infrastructure, will create an explosion in new value opportunities, predict KPMG.
“CAV offers an opportunity to transform the world by fundamentally altering the way people and goods are moved.”
Although the onset of CAV should decrease the overall number of vehicles, the number of journeys and total distance travelled is likely to increase. “Initial projections for the UK suggest that total passenger miles travelled could rise by as much as 10% between 2015 and 2030.”
The report reveals how connected cars evolve to become “computers on wheels”, they will generate more data than ever before, which can benefit consumers by increasing the safety, convenience and enjoyment of journeys.
“Maintenance can go from being reactive to predictive, new parts can be ordered automatically and whole fleets can be dynamically managed.
KPMG predict the new mobility ecosystem will become a complex web of interconnected value chains. As mobility players fight for a share of the business, the report highlights five strategies to overcome the challenges ahead:
- Decoding disruption (and overcoming ‘action paralysis’)
- Fighting for the consumer
- Un-stranding assets
- Fighting for the consumer
- Searching (and planning) for scale
“We would like to offer one final observation: successful examples of collaboration in disrupted industries suggest that no single company or sector can drive change. A unique combination of cross-sectoral capabilities is required to build enduring solutions to move people and goods. In short: collaboration is not an option, but a necessity,” conclude KPMG.