Autonomous mobility players all over the world experience challenging times when it comes to start tests and run pilots. And some times technical problems are not the biggest ones. They need Institutions to open experimentation, regulatory bodies to approve, connectivity and control centers, the right use case, the budget, and a series of partners to manage vehicles, services, and maintenances.
So far, few countries around the world have deeply invested to attract investments, and dialogue with industry players to work together and develop the regulatory framework and the recent KPMG Autonomous mobility index has given a broad overview of the best regions.
But something positive (and I would say unusual) is happening in Italy. The Government is focused on introducing new measures to boost the economy post-Covid and innovative technologies are a key part of the puzzle. A few days ago the “Simplification Decree” has been published to the “Official Journal” and becomes an effective law (to be further converted in the next 60 days by Parliament.. but still valid). The law contains one article giving life to the “right of innovation”. Basically, it is allowed to test new technologies even in the absence of specific regulation, through individual approval to be provided in a few weeks timeframe by the competent government Office (on purpose-focused within the innovation Ministry).
This is a huge game-changer for the country because from an environment perspective Italy already has many pre-requisite fitting autonomous mobility,(big and medium cities, close distances, different use cases, large manufacturing and small-medium enterprises, high competence in automotive and a high-quality connectivity network). the absence of any regulatory framework was actually blocking the innovation, but now the last and tollest wall fell down.
It’s time to consider the country as the right place to test and prove Autonomy can play a significant role in driving the change of the mobility industry. I look forward to hearing business friends and partners deepen new ideas.
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.
Nearly 20 years ago we were few dozens of people (entrepreneurs, managers, engineers and environmental advocates) around Europe keen to the idea of sharing cars. Early stage projects, often public funded, came live trying to demonstrate that sharing mobility was the right choice to fight congestions, pollution in the cities. Opponents (car industry-first) had an easy time to even make fun of car sharing because the car ownership culture was so strong that nobody would have bet on sharing mobility success. Furthermore, car sharing was not regulated and public authorities struggled to define a public or private service. Fortunately, not many lobbies could fight since the numbers were very low. But business rules sometimes are unexpected and when big players started heavily investing in the service since it was a captive market.. it magically became trendy and blew up with still ongoing growth. Europe drove this growth and expanded in the US and Asia (leading one now).
The ride-hailing revolution.
Ten years later we saw an opposite trend, based on ride-hailing services. Thanks to big cheques and VC willing to address the mobility market we saw the incredible growth of the on-demand ride-hailing business (from Uber on). US market was quite low regulated and after setting a general regulatory framework to recognize the TNC (Transport Network Company) the business boomed. Unfortunately, the reverse trip didn’t work in Europe. where opponents this time where much more seasoned and conservatives. taxi drivers lobby from one side and public transport operators on the other side. Both lobbies were very closed to national and local governments.. and they succeed in limiting (or banning) ride-hailing services in many cities or country.
Micromobility: the last missing point
Now the new trend is getting live.. micro-mobility, based on kick scooters or scooter sharing. Again we face similar situations to the past but regulators and operators are more ready to manage operations and services. We don’t have lobbies to fight against to.. (maybe the “pedestrians lobby could be the most interested one.. but they are not officially organized 😄) and the services boomed in the US first but nearly at the same time in Europe. However, cities opened their roads and sidewalks (and cycling lanes and pedestrian zones) to kickscooters we can say that the main factors that can destroy or heavily limit the business in Europe are safety and public order. kickscooter provides an unbeatable feeling of freedom to move everywhere (from home to metro to your car).. but freedom can get too much closer to anarchy in this case. So we see cities
shutting down services, (Paris), banning operators until the local regulatory framework is all set (Milan), while studies declare numbers supporting how kick scooters are polluting and dangerous.
We don’t have fighters this time.. kickscooters sharing don’t steel job to any existing category but Governments (especially in Europe) are very keen to control and regulate mobility in every detail, therefore, a harmonized policy framework is highly recommended to gather operators and policymakers to a common standard and business case. We can learn from the past 20 years how to introduce and steer a mobility “revolution” in the right way, this time.
Just few weeks in 2019 and news anticipates some of the most interesting trends we will likely see through the year.
1) Mergers (industrial & corporates)
Biggest German automotive brands are considering multiple areas of cooperations. After the big merger between Daimler and BMW mobility services (moovel, drivenow, parknow, car2go, mytaxi and few more brands) just approved by antitrust authorities and recently announced, VW has entered in the arena mentioning that they have in place conversation for larger cooperations agreements with the historical competitors. According to Autonews “VW is pursuing the approach of an open platform to include as many partners as possible,” VW said in an emailed statement. Strategic partners and a broad network is essential to success, it said, without giving details”. It seems that the whole German automotive industry seeks a potential industrial alliance to develop common technology to delivered autonomous driving and mobility. It’ s clear that the automakers need to join forces against a common entrant “enemy”: giants from USA and China. Not necessary automakers but tech companies. The competitive landscape is rapidly changing and traditional rules will not work anymore in the near future. Investments required for autonomous driving platforms are huge and synergies became crucial to compete in the timeline and delivering expectations. There has likely been a Government moral suasion behind these conversations since Germany can’t risk putting the automotive industry in risk.
2) Tech industry moves into manufacturing
If we go on the other side of the Ocean..we face a similar path in the other way around. Waymo, the recognized leader in software suite for selfdriving cars, just
announced to set up a factory in Michigan, investing little more than 13.6M (which is quite a small amount compared to R&D so far) creating up to 400 jobs aiming to put more 20.000 L4 vehicles by 2022. Magna group will partner with Waymo building the factory proving that even tech companies are jumping over traditional comfort zones (software focused only). While this step is an early one for USA players, they come far after Chinese industry that is already leading EV components supply chain and AV production.
After the hype in Autonomous driving showed last year we can expect more pragmatic anc concrete approach. Understanding that Level 5 is far away to come, there will be several use cases where AV (level 4) can fit well to improve mobility and safety. EUvsUSvsChina.. global competition will be around technology, use cases, vehicles and regulations. A good time to be in the industry!
New mobility and transportation are on the hype; huge media coverage, billions of investments, M&A happening on a monthly basis and a common enthusiasm among the business community from all over the world. The convergence of multiple industries (Automotive, Public transportation, Energy and electrification, Shared mobility, Autonomous driving) are shaping the market and changing the boundaries among private vs public, ownership vs utilization and much more.
Ok.. we dream that in 2030-2040 all these transformations will be normal and many of us (or our children) will go around cities with flying cars available on a bottom through our smartphone..but what should we really expect happening in few coming years?
Here what I would realistically expect;
Electric vehicle industry and market: Electrification will be one the most concrete changes. Many investments have been done in the last 5/7 years and top car makers have clear pipeline for new products starting from premium level with a top down strategy. Tesla will be challenged by German automakers but if Model3 will maintain its promises there will be a lot of competition. Regional markets will see different developments: EU will grow slowly and even if there will be some exemptions (Nordics and likely UK and Netherlands) big volumes will arrive after the next 3-5 years once the charging infrastructures will be highly deployed. US will ramp up but in jeopardize markets, according to state and local policies. That will be positive anyway considered how US economy is localized. China is the leading region, not only due to Government commitment, but also because of components technology industry leadership (battery cells). Not sure how many among recent Chinese/global EV brands will be successful (Byton, Nio, FaradayFuture, Leeco) even if all of them have global similar organization (design and Engineer in EU, manufacturing in China, Headquarter and innovation in California). India shall be a interesting new area to look at. Growing economy, highly populated with a strong political commitment to shift towards EV (30% of EV by 2030). Infrastructures is a big gap but good quality products availability is also a limit so far waiting for big car makers to deploy premium vehicles. But 2 and 3 wheelers will be the the real challenge since those are the most popular vehicle, affordable for low income population and largely available, unfortunately these vehicles are generally cheap and not much technology is needed.
Autonomous driving: this trend is polarized: people either love embracing self driving car or just will never want to see someone out of the driver seat. Culture, safety, car passion.. every position is fair but will likely see early stage applications of self driving vehicles based on region economics and regulatory framework. While in US tech
companies developed software suites and operations based on traditional cars equipped with ADAS, Europe seems to be little behind also due to more strict regulation and less
attitude in letting autonomous car driving on public roads. But this approach doesn’t mean that once legal aspects will be set European player (and its historical car maker industry) will catch up and potentially “win” the long term run. We’ll likely see multiple use cases tests with a public transport oriented approach and last mile services using small shuttles.
Sharing Mobility: This is likely my favorite topic. After several projects, services and business models tested by a number of different brands, from automakers, to rental companies and public transport operators, we’ll move into a consolidation phase, following two directions: many companies will merge to survive to competition specially because shared mobility is a low profit business and requires high economy of scale, larger companies will compete on multimodal services, integrating bikesharing, scooter sharing or moped (or light scooters.. naming is not standard yet). Again regulation will be a key topic as some of these innovation (specially free floating base) are highly discussed and public sentiment is often controversial.
For sure.. doesn’t matter which area of business you are focused on, it’s clear that there will be much to learn and new competences and skills will be required. Not referring to engineering and software sides only, but from operational perspective we’ll face new players and existing ones building knowledgable organizations leveraging a mix of digital and automotive experiences, combined with social, economics, transportation and sharing economy. While once we’ll have many operators and technologies in place..big data management and interoperability will be next business to address.. but later on.
3 days showing self-driving shuttles capabilities brought autonomous driving to next level of experience.
Some experiences are worth sharing and there is no better way to show a self-driving vehicle than riding in real everyday scenarios. Olli (#meetOlli), an autonomous shuttle performed 3 days of rides for more than 300 guests from all over the world to prove its new capabilities. Thanks to the RoboticResearch partnership with LocalMotors a new software platform and sensor sets have been designed and integrated into Olli.
The experience brought passengers on a ride smoothly, reaching up to 19 Mph, crossing pedestrians and cyclists intersections, with vehicle overtaking and signal recognition. But dynamic obstacles avoidance has been one of the most interesting tests. Every group was asked to move barriers located in the path of the vehicle and based on the software OLLI changed its trajectory each time to determine the safest possible route to drive forward as published in official Local Motors social media feed
The event gathered also a number of partners in fleet management , engineering services, insurance, HMI experience, mapping, operators and financing. It is clearly an entire ecosystem built to support self driving vehicles coming to market and providing all the necessary supporting tools to manage barriers to introduce this new technology.
Autonomous driving is the forefront of mobility and an entire industry will be shaped in the future according to new services, business models and players.
Next step is to bring confidence to the public around autonomous vehicles, deploying vehicles and proving how safe this technology can be. It’s a long way to go to reach fully autonomy but the journey will definitely be exciting. See you on the roads this summer!
Managing fleet of autonomous vehicles offers the unique opportunity to use a series of assets to increase the value of the business and develop multiple collateral business cases linked with the operations.
Each asset can be owned/acquired/leased/ to run the business case and create more revenues streams
Storage and parking. Having access to storage hubs and parking infrastructures will be a key factors when we’ll have thousands of vehicles running.
Garages for car services. Traditional car dealers and services will shift their core business from privates or direct customers to fleet and an efficient and fast organisation will optimise the operations
Charging hubs (Renewable powered, smart grid, vehicle2grid applications). Grid balance in cities will be an issue and those players with direct access to infrastructures will be facilitated. Energy will be the new “oil” and its availability can be improved thanks to renewable power.
Among world top ten brands as per capitalisation (Amazon, Apple, Google,) and in mobility also (Uber) there are companies owning huge amount of data. Big data will be a mainstream revenue stream for those able to monetise and create value from that. Transport and mobility provide a relevant amount, coming from the following areas:
Mobility patterns (Matrix o/d)
Mapping data (for autonomous driving software applications)
Driving data (travel behaviour, drivers behaviour in different environment, incentives for drivers, privacy policies)
Artificial intelligence for mobility and user experience
Cars are not only the main asset for running the operations as there are multiple options to get value from the vehicle:
Financial asset. Financing the fleet allows to have interest gain
Second life Battery pack strategies (link to storage business model). The batteries of the vehicles can shift into a second life plan to re-market them at the end of the first lifecycle for storage and other utilisations.
Marketing. On purpose vehicles are a branding tool (as Moia just proved with their launch few days ago)
Commercial (promotion and re-marketing). Vehicles can generate more revenue once we move them into the re-marketing plan and second sales.
What shall we do during our trips in autonomous cars? Many operators are raising this questions and pay per use services (entertainment/business) to be developed for self driving cars seems to be a collateral area of interest. Whether we use our subscriptions (Netflix, Spotify and similar), I bet many services will be integrated directly in the cars.
If those are some of the assets to be leveraged in future mobility business, there is an complementarystrategy to address which seems to be the big umbrella where including the whole stack of innovation: MAAS: mobility as a service. Once the volume of ridesharing trips will really shift our cities mobility patterns we have to expect that large corporations will aggregate vertical players to create the biggest
platform to really go from A to B with one touch. Many are competing already around the world and capitalisations will drive the winning ones.
East regions (China, Malaysia, India) faces deregulated market where new mobility services (ride sharing/ride hailing) have established brands like DIDI (China) Grab (Malaysia) Careem (Middle east) OLA (india). Many of them have international growth plans or even to extend operations (Didi just announced 151M$ investment to enter the car sharing market).
West regions (USA/Canada). is the cradle of new mobility and player are competing at the forefront of innovation thanks to most famous brands Uber/Lyft, Waymo/Apple.
Europe: is an highly regulated market and new mobility struggles to become real in terms of volumes. Further than direct business development a potential strategy to fast the process in the early stage is to link with public transport operators or car manufacturers that are familiar with regulations and they are entering in the mobility arena. Business development is subject to local/national Government approval even if EU policies are expected within few years time to create the legal framework.
So there’s a lot to do and we can be sure that mobility, public transport industry and automotive will converge in a whole new competitive arena that we don’t know the boundaries yet.
Strategy, pillars and operations for autonomous driving fleet management business (part 1)
We are quite aware that future business model for carmakers is mobility oriented more than car focused. All brands are moving to become miles/km providers, much bigger market than struggling selling cars to dealers and customers.
Weekly news support this future.. but the focus of this post is more about the business side. How to make money in this new shaping industry?
The convergence of electric and autonomous technologies, public regulations, tradeoff between public/private business, integration of fleet management, long-term and short-term rentals are disrupting multiple traditional businesses and shaping a completely new competitive arena where different industries want to play the game.
We see car makers directly moving to mobility (brand like Moia, Maven, IMotion, Moovel, Lynk&co just to mention few ones) or huge public transports operators (Deutsche-Bahn, Transdev, Keolis) extending their offer to ride-sharing pilots, or big rental companies embracing sharing mobility (corporate or privately based) and don’t forget new players often heavily backed (Zoox) or leading forefront giants like Uber or Waymo.
Quite a crowded arena, specially if we consider that none of those players really own the whole stack of services that future business will require. Even more if we understand that final stage of this change will be the coming popular definition “Mobility as a Service” clearly described in this picture by Sampo Hietanen, pioneer entrepreneur running his Maas Global company.
Starting from here I outline some of the most important topics to be considered addressing this market based on assumptions that only few companies will have the resources (money, team, assets) to scale globally and we’ll probably see many providers acting locally followed by an increasing number of M&A.
Full mobility service business case is based on a tailored range of vehicles according to client’s preferences. Vehicles will feature new design (cars/van/minibus/light-freight) with multiple mobility targets. Vehicles will be initially electric and autonomous in a short timeline of period (local deployment according to regulations). In some regions it’s possible to include 2 wheels in the game.
Fleet Financing (leasing/rental) will be a core business because even if we think about the future.. we’ll still need someone to own and rent cars for mobility. At least until we’ll move in 3 dimensions instead of 2 and flying car will hit the road.. (actually the sky) of our cities.
Business operations: the business case includes a broad range of operations:
This provocative statement opens Citytech, the event gathering this week in Milan more than 800 international experts, key players and top brands showcasing some of the most relevant innovations in mobility aiming to shape tomorrow’s cities. It’s time to act and take strong decisions to lead the transition towards a more sustainable mobility system and urban environment.
If Government sets regulations, industry’s role targets technologies and manufacturing accordingly. After Volvo recently announced to produce only electric or hybrid cars in 2019, JLR just followed with a target date of 2020 and media are full of releases from IAA show in Frankfurt from BMW, Daimler and VW on huge investments to electrified the whole production in the near future.
We finally know that revolution today.. needs money more than arms, so what’s the opinion from financial community about E-mobility? JpMorgan just declared that electric technology will disrupt the market with many losers, all those ones that will not drive the change. (CNBC credit video) They forecast 35% market share for EV in 2025, scaling to 48% by 2030. More conservative position from MorganStanley’s comparing multiple scenarios expects 16% penetration for EV (fully electric) in 2030 that can reach up to 60% by 2040. Meantime Dutch bank ING identifies the battery costs reduction and public incentives as the main opportunities to drive production fully electric in 2035.
Market is full of researches we don’t want to get lost in, the fundamental is that global political, economic and financial community has complete knowledge about this changing. Now it’s up to management class (from politics, to industries and consumers, nationally and locally) to decide whether they want to lead the changes or get disrupted. Italy is far behind this trend as proven by the insignificant market share of Ev (0,03%) or the absence of commitment and specific policies, any autonomous driving initiative elsewhere in the country even if there are existing competences and technologies not only linked to the “old” motor industry. We don’t need discussions but facts, projects, trials, and investments. That will bring the country industry back to a primary role in the future of automotive…(oh no sorry I’am wrong, …in the future of mobility).
Carlo Iacovini Marketing Director, Local Motors, Board Member, Clickutility on Earth
Il processo di cambiamento in atto nel settore dell’automotive è così radicale che non tutti i grandi gruppi ne hanno piena consapevolezza. Da un lato nuovi player spingono per introdurre l’innovazione, cercando di dimostrare l’economicità e la profittabilità delle tecnologie, dall’altro anche i brand più tradizionalisti hanno avviato fasi di scouting tecnologico e indagini conoscitive. Tesla è sempre in prima linea tra i nuovi brand sulla scia dei successi di vendita della Model S/X e in preparazione dell’arrivo della Model3, primo modello più economico. L’azienda è al centro anche di speculazioni considerando che ha appena raccolto 1miliardo di $ e il gigante tecnologico Tencent ha rilevato il 5% del capitale di Tesla per 2,8mld di$. Un dinamismo di mercato che alimenta congetture sul fabbisogno di cassa dell’azienda in previsione del lancio di produzione della nuova media e la capacità di soddisfare la domanda di acquisto degli oltre 400.000 clienti che l’avevano prenotata. Il rischio è infatti di trovarsi a “metà del guado” con cassa limitata.. sarebbe la posizione più rischiosa per un’acquisizione (favorevole.. od ostile). A parte Tesla l’industria dei nuovi brand della Silicon Valley interamente votati a rivoluzionare la mobilità con veicoli connessi, autonomi e condivisi, fa i conti con la dura realtà. Faraday Future la più chiacchierata azienda americana (con capitali asiatici) è in grande difficoltà e dopo un lancio del loro primo veicolo (la FF91) in grande stile a Gennaio scorso a Las Vegas ha visto una drastica riduzione degli investimenti sulla fabbrica del Nevada (avviata per una piccola porzione rispetto ai piani generali), al quartier generale in California (venduto l’intero lotto di terra dove doveva sorgere una cittadella dell’innovazione), la dipartita di diversi executive da poco assunti (e l’ingresso di altri, come il nuovo CFO) e nessuna certezza sui tempi di produzione e commercializzazione del veicolo (che per la cronaca ha un prezzo stimato in quasi 170mila $). Next EV, altra multinazionale di pochi anni, dopo aver anticipato una vettura supersportiva da corsa con record sul giro realizzato al Nürburgring ha presentato EVE, il concetto per la nuova mobilità. Un veicolo che rappresenta un’emanazione diretta del proprio spazio di vita, come fosse un salotto o un ambiente dove le 4 ruote sono una componente quasi secondaria. Suggestioni.. certo, ma nemmeno troppo lontane nel tempo visto che anche Volkswagen a Ginevra ha presentato Sedric, un veicolo multifunzionale basato sulle stesse premesse concettuali. E per capire quanto le aziende guardino lontano basti pensare ad Airbus che insieme a Italdesign ha portato un prototipo di auto volante proprio nel salone svizzero…. leggi oltre