CASE (as ACES and similars) is the acronym reflecting the most recent trends in the Mobility Industry: we keep hearing that “Automotive is changing towards Connectivity, Autonomy, Sharing, Electric”. Now that Covid-19
outbreak is locking down entire countries, economies, the industry is thinking about what the future will look like.
The impacts of the crisis are far beyond what we think and the first main problem will be how to keep global corporations financially stable while production is closed.. and demand will not turn on with a click after the crisis will be over. In the short term, Governments and Bank institutions will provide large cash to companies to keep employees and restart production. In the meantime, management will evaluate multiple scenarios. and new trends will need to be considered.
Electric technology transition. There is a large debate about the correlation between Covid-19 outbreak and pollution, giving evidence on how much emissions fell due to lockdown and how the virus spreads out the most in critical pollutant regions (particularly in the north of Italy). These links should
support investing in EV to reduce global emissions from transport. Transition to electric can’t be stopped easily after more than a decade of r&d and product planning but as the market is still policy-driven more than consumer-driven, the fall of general demand could significantly slow down the process. The economic crisis will stop new sales (in china dropped more than 80%) and a delay in the mass adoption of EV might become a consequence to consider. Automakers will leverage these conditions to slow down the process and push for technological neutrality approach to increase sales and fight pollution in parallel through CNG/LPG and Euro 6 available products. The entire industry has already asked to EU regulatory body to postpone penalties for not reaching EU target goals in reducing total emissions while some top management is already sharing to the market some strategic decision (like JLR owner TATA willing to find a partner for the automotive division).
Autonomy: this much-expected revolution will need to change priorities and main business models. From one side teleoperations and self-driving vehicles shall be widely adopted for specific applications like driving in restricted areas, disinfection of roads, small goods delivery. On the other hand, some of the disruptive global services like robotaxis might become less attractive to consumers
affected by social distance and share mobility restrictions. Autonomous mobility software industry should not be directly affected by the outbreak, it’s more about which segment will continue to be on top of the list.
Sharing mobility. The disruptive trend of sharing mobility faces the biggest threats. Social distance will become a very common word and even more a requirement for the next 12/18 months to avoid the outbreak’s peaks. Consequently.. how many of existing users will still be comfortable in ride sharing, car pooling or sharing a vehicle with others.. seating in less than 1-meter distance? Covid-19 is changing our culture and personal values. Health care and prevention will become THE priority and customers will behave accordingly.
Rental and car share businesses might mitigate future new concerns through special tools to give confidence about how vehicles will be cleaned and disinfected after each ride. We already see leading players like Getaround facing financial problems in US while looking for a buyer or on the contrary leading EU player in sharing mobility Wunder, investing to acquire rental business software.
Connectivity: Not real negative impacts around connectivity. The communication infrastructure needed for the car and global infotaintment system to enhance the riding experience will remain a key feature of every vehicle doesn’t matter which segment and target user will be built for.
The timeline for those changes will also vary geographically even if automotive is a global industry (especially for components and supply chain). Europe risks the most due to stagnant demand with large production to keep alive but at least will go over Covid earlier than USA (that has just begun), while China is already in the re-opening phase and everybody hopes will boost the market raising demand. The global situation is still very fluid and the coming weeks will be crucial to understand what case will be next.