MOBILITY: CHANGING PRIORITIES
The history of mobility is also a history of grand visions. Many of them never became a reality, while others have revolutionized the way we travel. But where are we headed now?
More and more cities in Europe are going car-free—at least downtown. Moreover, car-free days are being tested in many places. More than 30 cities around the world have signed the Fossil Fuel Free Streets Declaration and plan to ban diesel and gasoline-powered vehicles. This raises the question: Does the automobile have a future?
The short answer is: Yes. That’s because rural areas, for example, don’t seem to suffer from the urban “auto fatigue.” Moreover, the automobile market is growing along with the rise in prosperity in many regions of the world. As a result, annual car sales are now around 20 million higher than they were on average between 2000 and 2015.
The somewhat longer answer to the question is: Yes, but… That’s because the future of the automobile will look different. And the car of the future will look different too. New technologies and business models are gaining ground. Four trends are beginning to take shape.
Long-time Daimler CEO Dieter Zetsche once said that electric mobility is like when a ketchup bottle is turned on its head: “You don’t know when it’ll come, but when it does, it will be overwhelming.” He might be right. The global fleet of electric vehicles more than doubled in size between 2016 and 2018. If the International Energy Agency is right, it will grow more than tenfold between now and 2030. The automotive industry has to drastically reduce the emissions of its fleets in order to prevent billions in fines and driving bans. Electric mobility seems to be the solution of choice that’s ready for series production. Beginning in 2025, the world’s biggest automaker, VW, plans to produce one million electric cars per year. Other companies have already gone further—according to the latest figures, one out of every two electric automobiles in the world is on the road in China.
How is this technological transformation underneath the hood affecting suppliers? Most importantly, they need to supply batteries that are safe, powerful, and inexpensive. Evonik offers additives for just this purpose. In addition, Evonik’s lightweight products and composite materials enable automakers to extend the range of the batteries. “However, the end of the combustion engine also means that there will be less demand for our high performance polymers in engine compartments,” says Axel Zajonz, who coordinates the Evonik for Automotive industrial team. Instead, electric vehicles need considerably larger amounts of these polymers for the cooling lines and hoses of the batteries. “During the transitional phase, we will do the most business with hybrids that combine electric motors with combustion engines,” he says.
ON THE DATA HIGHWAY
There are almost no aspects of life that haven’t long been affected by digitalization. Cars are no exception. People sometimes refer to cars as “data centers on wheels” when they talk about the growing data flows in today’s vehicles. According to Siemens, the next generation
of semi-autonomous vehicles will generate up to 19 terabytes of data per hour. Every additional sensor and every camera produces another data stream. The higher the resolution, the bigger the flow of data. In order to cope with this flood of data, manufacturers and suppliers are currently developing new transfer and server concepts for automobiles.
New services will become possible once vehicles have been digitalized and wirelessly interconnected. This will open up new possibilities for the manufacturers themselves, who can remotely control data-based services such as predictive maintenance, updates, and upgrades. However, it will also do so for third-party suppliers, who develop their own apps and services. These developments range from individual turn signal light rhythms and smart parking space searches to pay-as-you-drive insurance and much more besides.
What does all of this mean for Evonik? “Digitalization hasn’t yet changed the materials themselves very much,” says Axel Zajonz. “But we are of course a supplier for the electronics and semiconductor industries. That’s why we benefit if many more of these materials are built into vehicles in the future.”
BUSINESS IS ON THE MOVE
Why should you own something when you can share it? Digitalization has made the “sharing economy” a mainstream phenomenon and greatly transformed many sectors in the process. Rental services are especially appealing when it comes to mobility, where the purchase and operation of a vehicle pose considerable financial hurdles. Moreover, vehicles can be rented more easily and flexibly than ever before, thanks to GPS, smartphones, and e-commerce. In 2019 Germany alone had almost 2.5 million registered
carsharing users. These users share a fleet of 20,200vehicles that is also growing. That translates into about 124 drivers per car.
Automakers have also responded to these developments.BMW and Daimler jointly operate ShareNow, which is Germany’s largest provider of carsharing services.
And what does this mean for Evonik? “The new business models and changed use habits could affect the design of automobiles in the long run,” says Zajonz. Vehicles that are used more might need to contain other materials, especially in their interiors. “It is certainly conceivable that manufacturers who produce or operate fleets of vehicles specifically for carsharing purposes will switch to using surfaces that are easier to clean and disinfect.”
If you want to see robots drive, the best place to go is California, where 64 companies were recently testing autonomous vehicle fleets on public roads. These vehicles clocked up a total of 4.6 million kilometers in 2019 alone. Waymo, the automotive subsidiary of Alphabet Inc, has driven more than 32 million kilometers with autonomous vehicles since 2009. Drivers only had to intervene once every 21,000 kilometers. So will everyone soon be able to buy a self-driving car? No, not exactly.
While driver assistance systems are taking over more and more tasks, there are still many technological and regulatory hurdles that need to be taken before fully autonomous vehicles can be offered. Traditional automakers also suffer from the problem that they have been marketing “driving pleasure” for a century, and are now finding it hard to justify charging extra for not driving. Wealthy people who don't like to drive can use taxis or private chauffeur services.
As a result, self-driving automobiles will initially be especially interesting in areas where personnel are a cost factor—bus and taxi fleets and logistics. In view of rising cargo volumes and the increasing difficulty of getting young personnel, an investment in self-driving trucks will pay off.
For suppliers, autonomous driving could generate two completely contrasting trends. Driverless commercial vehicles require almost no interior space; Volvo's concept for an electric, fully autonomous truck called Vera lacks a cab. The tractor itself is as low- slung as a sports car and is already being test-driven in the port of Gothenburg. By contrast, self-driving systems could make car interiors more luxurious than ever before, turning them into mobile living rooms with digital entertainment features for a comfortable ride from point A to point B.
But what does this mean for the future of the market? Many questions still remain unresolved: Will autonomous driving make carsharing more profitable, because the vehicles will drive themselves to the customers and to the charging stations? Will interconnected automobiles and new data- based business models provide automakers with a market position similar to that of Google, Apple, and other companies of this kind? Will carsharing and networked mobility on all channels eventually make car ownership superfluous in rural areas as well? Will cities become car-free zones, or will driverless electric taxis actually lead to an increase in traffic density?
Only one thing appears certain: Automobiles will change more fundamentally over the next decade than they have in the past half-century.