FOREWORD
This fourth edition of the Arthur D. Little (ADL) “Future of Automotive Mobility” global end-user study builds upon previous editions to deliver insights based on extensive primary customer research. First conducted in 2015, the study identifies disruptions and trends for the future, providing the intelligence that industry actors need to meet changing customer requirements in different parts of the world. For this edition, we analyzed a sample of over 16,000 users from an unprecedented 25 countries, which collectively accounts for over 80% of global new car registrations.
Our research shows that the simple view of unidirectional progress toward a connected, autonomous, shared, and electric (CASE) world is increasingly untenable, as both producers and consumers reassess costs and benefits; it also confirms trends identified in previous editions of this study. The immediate world of automotive mobility will be connected, assisted (not autonomous), private, and in a protracted transition to electric.
Moreover, we see significant and increasing divergence between the mature markets of the US, Europe, and North Asia, which are at peak motorization, and the more dynamic, yet price-sensitive, markets of the rest of Asia and the Middle East.
Richard Parkin
Partner
Automotive and Growth Practices
During the early 2000s, many automotive industry commentators predicted that we would be well on our way by now to living and driving in a CASE world.
A tap on our smartphone screen would summon a zero-emission, driverless vehicle to our door, ready to whisk us to our destination in comfort, with connected apps keeping us in constant touch with the world around us. At the end of our journey, the vehicle would glide away to its next passenger, leaving us free from worries about ownership, maintenance, and parking.
However, previous editions of the “Future of Automotive Mobility” study, along with the actions of OEMs, confirm that expectations of a CASE future have not yet universally translated into reality. While cars are now connected and well on the way to being electric, they are assisted rather than autonomous and remain individual (or private) rather than shared. The industry increasingly recognizes this: launch dates for fully autonomous vehicles have been pushed back or canceled, and strategies are shifting from full autonomy to promoting advanced assisted driving.
This edition of the study addresses the following five topics:
Based on our analysis, the sector needs to act on four key challenges, in particular:
For the past 15 years, the automotive industry’s future has been framed around the concept of CASE:
How far down the road to CASE are we? Combining our global customer research with other sources shows a picture that is substantially different from the one we expected just a few years ago:
Uneven progress toward CASE points to the challenges the automotive industry faces now and in the future. In addition to making investments to electrify powertrains and redefine vehicle software architectures, it must cope with disruption by new entrants, heightened sustainability pressures, and changing customer needs. These considerations are set against the backdrop of tightening regulations, geopolitical turbulence, and potential national and regional tariffs on an industry that strives to operate globally.
Despite earlier predictions that the importance of car ownership car will decrease, the number of vehicles on the world’s roads is growing, not shrinking. Globally, users believe that having their own vehicle will be equally or more important in 10 years’ time (see Figure 1[2]) compared to today. This outlook is driven by three trends:
While no single variable alone can explain motorization rates (population density, public transportation availability, and income distribution, among others, play a role), real GDP growth is the number one factor by far.
Among our sample, expectation of de-motorization is not widespread; it is limited to Western Europe and densely populated areas in Asia (e.g., Singapore and Hong Kong). Expected de-motorization is essentially a wealthy, urban phenomenon, with high-quality public transportation a prerequisite. Three-quarters (76%) of those in European cities with a population of over 5 million are prepared to give up their car, compared to 62% in towns with under 250,000 people. ADL’s “Future of Mobility” city ranking[3] is led by cities such as Singapore, Stockholm, Amsterdam, and Copenhagen, which have highly mature, cost-effective public transport and strong support for alternative mobility types like cycling.
Relatedly, there is an inverse correlation between city size and car usage. In cities with over 250,000 inhabitants, around half of respondents drive under 6,000 km a year. In smaller towns and suburban environments (under 250,000), people who drive between 6,000 and 15,000 km are the majority. Two-thirds (67%) of those in towns with a population of under 10,000 drive over 6,000 km each year.
Young people expect the importance of having a car to be higher in 10 years, even in mature markets such as Europe and North America. Only the older age group (over 45) in Europe and North America expect to de-motorize as they age (refer back to Figure 3).
When deciding on their next vehicle, customers in mature markets are much more likely to choose a used car compared to those in emerging regions, such as China and India (see Figure 4). This is partly aspirational in terms of a desire to own a new vehicle but is also due to the availability of quality used vehicles. Mature markets have a plentiful supply of a broad range of used cars, often sourced from a well-developed leasing market and backed by a trusted used vehicle distribution brand. These conditions drive higher trust in the quality of used vehicles and in used car sales channels.
There is no general trend away from car ownership or toward shared transportation visible in our data. The study shows a lack of interest in giving up personal car ownership, as it is still considered essential for many, particularly in areas without good public transportation. Owning a car is also an aspiration for people under 45 as they move into middle age and for those in less-motorized parts of the world.
When asked what would persuade them to give up their personal car, respondents cited new, lower-cost mobility services (50%) and high availability of such services (38%). However, 28% would not consider giving up their car under any circumstances.
Among alternative mobility methods, traditional choices of public transport or ride hailing (which no longer only includes taxis) remain the most popular.
Car manufacturing is therefore not under threat from de-motorization in the vast majority of markets. However, tightening legislation and increasing urbanization could reduce car demand over the longer term. To increase their share of mobility and user numbers, public transport authorities and operators should focus on improving the availability and quality of the services they offer.
When it comes to experimenting with new services, China (up to 50%) and India (up to 45%) have the highest percentages of urban residents who have tried car and ride sharing. However, as shown in Figure 5, neither service is mainstream, as less than 50% of respondents have tried them. Traditional public transport remains strong, especially in Europe and China.
In fact, the most often experienced new mobility service for urban respondents is ride hailing, tried by 50%-75% of people in every region or country except Europe and Northeast Asia. Globally, those in the 30-44 age range are the heaviest experimenters, with about 45% trying ride, car, or two-wheeler sharing, compared to only about 5% of people over 60 who have tried most service types (see Figure 6).
There are significant regional differences in the use of new mobility services, influenced by car ownership rates and access to reliable, comprehensive public transport. Urban dwellers in India, Southeast Asia, and the Middle East make an average of 14 to 17 journeys each month using new mobility services, compared to residents of Europe, the US, China, and Northeast Asia, who make dramatically fewer, between 11 and 12 (see Figure 7).
Globally, ride hailing usage occurs, on average, 3.5 times per month, with usage being higher in all parts of Asia and lower in the US (2.9 journeys) and Europe (2.3 journeys). Car sharing is the most popular new mobility service in the US, with users taking an average of 3.3 monthly journeys.
When asked why they choose new mobility services, respondents listed flexibility (62%), cost (52%), and the environment (44%) as their top three reasons, as shown in Figure 8. Flexibility covers a range of areas — customers don’t need to own or maintain a vehicle, battle traffic in congested urban areas, or find parking; they can also switch easily between different transport modes. Flexibility is clearly the number one reason for using new mobility services everywhere outside Europe (where cost slightly outweighs it) and the US (where cost is almost as important as flexibility).
Income had a minor impact on the reasons for choosing new mobility services among urban respondents. However, cost unsurprisingly increased in importance for lower-income groups, while flexibility and environmental considerations decreased:
When asked what changes to new mobility services would encourage people to give up their cars, the major areas respondents highlighted globally are cost (50%) and availability (44%). Twenty-eight percent would not give up their cars under any circumstances. There are significant regional differences: 77% of Chinese respondents require greater availability to replace their cars with mobility services; 75% of Indians cite improved ease of use; and nearly half (49%) of US respondents and 37% of those in Europe would not give up their car under any circumstances. Essentially, to increase the adoption of new mobility services, people require lower costs, higher availability, greater flexibility, improved reliability, and increased quality. This combination of requirements for higher service and lower cost typically makes the “shared” element of CASE unviable economically.
Five years ago, the first L4/L5 production cars for private users were projected to be available by the second half of the decade, with rapid ramp-up thereafter. However, traditional OEMs have pushed their projects back, with new entrants such as Apple and Alphabet either downgrading or discontinuing long-term projects. OEMs and operators are now limited to piloting operations carried out under special permits and more controlled conditions.
Despite technological progress and demonstrably improved safety over human-driven cars, the level of trust in autonomous driving technology has not significantly increased over the past five years, illustrating the lack of customer acceptance. In some geographic areas, trust has actually decreased, often due to well-publicized incidents and a failure by operators to effectively communicate its benefits. High-profile incidents in San Francisco, California, involving self-driving taxis run by Cruise and Waymo, with the vehicles crashing into fire trucks, striking pedestrians, and being vandalized by mobs, attracted a disproportionate amount of attention.
We see clear differences by income/location, with urban very-high-income and high-income respondents most positive on autonomous technologies (see Figure 9).
This correlation between income and acceptance of autonomous driving holds in all regions, though the threshold for acceptance varies. In China, we see 34% net approval at average income and city size between 1 and 5 million people, while in the US we need to move to cities with 5 million inhabitants and high incomes to see similar net approval levels.
European, Northeast Asian, and US respondents are the least willing to adopt autonomous vehicles, while those in India, China, and the Middle East demonstrate a much more favorable attitude (see Figure 10).
Mirroring the examples cited above from California, the primary concern with autonomous driving across all incomes and regions is safety, encompassing both machine and human errors, as shown in Figure 11.
User concerns about safety mainly reflect the still-immature technology for L4/L5 autonomous driving and a resulting lack of positive experiences reported in the media. People are aware that current autonomous vehicles depend on backup human drivers who are ready to intervene, must go slower than a human driver, and only operate in dedicated environments with special infrastructure. The promised benefits of automation around convenience and ease of use have not materialized yet. On the contrary, recent incidents in the US, which led to pausing trials of the most advanced robo-taxis, coupled with high-profile stories on crashes of private vehicles, have not helped to increase customers’ confidence in the maturity of the technology.
However, if these safety fears could be overcome by positive user experiences, it would lead to greater usage of personal autonomous vehicles. When asked whether a fully autonomous car would increase or decrease their car usage, all respondents globally gave an average weighted score of +4, rising to +26 for those who were positive about autonomous driving. Again, this was highest in India, with a score of +32 for all respondents and +42 for those open to autonomous driving. This increased usage would replace:
Overall, since 2015, the expectation of the percentage of public transport journeys potentially replaced with autonomous cars has grown, which would represent a switch from shared to personal mobility options.
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