mobility ecosystem 2030 - drive midlands€¦ · sources: department for transport, kpmg global...

#Mobility2030[ ]Mobility 2030

Mobility Ecosystem 2030

Presentation to the Drive Midlands Conference

16 May 2017

2© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a

Swiss entity. All rights reserved.


Your presenter• John Leech, UK Automotive Sector Leader at KPMG

• 26 years automotive experience with OEMs, dealers and suppliers in UK, US and Germany on audit, M&A, strategy and turnaround

• Authored studies for SMMT:

• Supply chain inward investment

• Brexit

• Connected and autonomous cars

• Digitalisation

• Secondment to DTI to project manage the Automotive Innovation and Growth Team

• Advisory Board Member of Drive Midlands

• Presented to Number 10 Policy Unit, BEIS, DIT on government policy for the automotive sector

Tel: +44 121 232 3035

Email: [email protected]

Mobility 2030

mailto:[email protected]




KPMG convened key companies from acrossthe ecosystem to help architect UKmobility2030

3

[ ]Mobility 2030 #Mobility2030

Ford

Visteon

Inchcape

AA

Europcar

Microsoft

BP

Vodafone

Arup

Costain

WS Atkins

Ricardo

National Express

Motability

Centrica

National Grid

Tom Tom

HSBC

AXA

DfT

Addison Lee

Skanska

Arriva

OLEV

Mobility 2030




Electric Vehicles

Three main disruptive forces will fundamentally transform how people and things move

Mobility as a Service

Autonomous Vehicles

Changing consumer and

societal demands

Mobility Value Chain

Collaboration in the future Mobility

Ecosystem

Mobility 2030




A pervasive global mega-trend with many implications

Industry execs

believe that….

…of consumers will

not want to own a

car, as new mobility

services begin to

meet consumer

needs

Passenger miles

travelled will

increase….

Cost per mile could

go down…

…following the

growth of the

mega-city and their

suburbs

…due to removing the

driver cost, longer

vehicle lives, new

energy sources,

technologies and

mobility scaling

£

Miles per

vehicle could

increase….

…as fleet services

use vehicles more

efficiently

The number of

major ecosystem

players

will decline…

…as sector convergence

leads to consolidation5x

Up to

50%

Up to

40%

?

Sources: Department for Transport, KPMG Global Auto Executive Survey 2017,KPMG UK Mobility 2030 analysis

Mobility 2030

Up to

10%




Trends and Insights | Electric VehiclesElectric vehicle technology will be fully embedded, with battery Battery cost forecasts support mass market adoption in 3-4 yearsd charging infrastructure suitable for all length journeys

Sources: IEA Global EV Outlook, 2016, Motor Trader, Energy Saving Trust, National Transport Survey, GreenThenSolar.com, KPMG UK Mobility 2030 Analysis

99.3%of UK car journeys

today are within the range of existing battery technology (100 miles)

Battery density and cost efficiency is increasing rapidly

-

200

400

600

800

1,000

1,200

-

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012 2013 2014 2015 2020 2022

Battery co

st (USD

/KW

h)

Bat

tery

en

ergy

den

sity

(W

h/l

)

US DOE energy density (PHEV) Energy density target (PHEV) US DOE battery cost (PHEV)

Tesla battery cost target (BEV) GM battery cost target (BEV)

Mobility 2030




Safety

Connectivity

Autonomy

Trends and Insights | Autonomous Vehicles

Level 4 autonomy in early 2020s; Level 5 potentially in 2030sll be available and embedded within a wider supporting ecosystem

Autonomy

Level

Timeline 2010 2015 2020 2025 2030

Blind Spot

Monitoring

Geo-fenced

autonomous driving

Lane Departure Warning

Adaptive Cruise Control (ACC)

Park Assist (steering only)

Intelligent Speed Adaption

Collision Avoidance

Lane Keep Assist (LKA)

Vehicle to Vehicle Communication

Intersection Pilot

Emergency Driver Assistant

3D Cloud Based Navigation

Valet Park Assist

Highway Autopilot

Traffic Jam Assist

L0

No Autonomy

L1

Driver

Assistance

L2

Partial

Autonomy

L4

High Autonomy

Full end-

to-end

experience

L5

Full Autonomy

L3

Conditional

Autonomy

Source: KPMG UK Mobility 2030 Scenario Analysis – Stretch case

Ford, BMW, Nissan

targeting L4 AV car

for 2021

Mobility 2030




248126

835

445

602

1067

0

200

400

600

800

1000

1200

2011 2012 2013 2014 2015 2016f

£m

AV Tech Global Deals, Value and Volume, 2011-2016

Investment (£m)

248126

835

445

602

1067

1815

3734

56

68

0

10

20

30

40

50

60

70

80

0

200

400

600

800

1000

1200

2011 2012 2013 2014 2015 2016f

# D

eal

s

£m

AV Tech Global Deals, Value and Volume, 2011-2016

Investment (£m) Deals

Trends and Insights | Autonomous Vehicles

Autonomous Vehicle technology M&A is now growinghe pace of development

Source: CB Insights 2016

Mobility 2030




The UK will be an early adopter of these new mobility solutionsMobility 2030

The UK has a high

proportion of the population

in high density areas…

Personal distance travelled in

personal vehicles in the UK

is low relative to other major

economies…

Demographic, regulatory and cultural factors means the UK will lead the adoption of EV, AV and MaaS…

Congestion pricing and air

quality regulations will

subsidise early adoption…

Sources: UK Census data (2011), Experian, UK Data Service, Reuters

…whilst cost per mile

of personal vehicles is

high

The Government plans to

remove insurance barriers for

AVs and is offering significant

funding for testing… £




An autonomous, electric, mobility service will be cheaper than private ownership (on a cost per mile basis)

Sources: Department for Transport, Transport for London, KPMG UK Mobility 2030 Scenario Analysis – Stretch case

Private AV

National & Metropolitan Rail

Ride-hailing services

Electrified AV Mobility Services 2030

Taxi

c.£5.00

Cost per mile – UK modes

Size indicates relative number of miles travelled per capita per year

£0.20-£0.40

MaaS provision could be up to 40% cheaper than private ownership

Local/National bus

Mobility 2030




400

300

200

100

0

1,000

900

800

700

600

500

926

6%

17%

16%

4%7%

15%

32%

2030

8993%7%

7%

5%

8%

17%

50%

2025

3%6%

12%

14%

2035 2040

954

8%

27%

26%

875

2%

5%

8%

17%

60%

2020

850

6%

9%

17%

64%

2015

825

5%

9%

17%

64%

AV Personal

AV Mobility

Bus

Rail

Commercial PV

Personal Vehicle Dynamic Shuttle

Baseline

Passenger distance travelled by year (billion km)

We forecast autonomous, mobility services will account for over a quarter of miles travelled by 2040

Mobility 2030




UK New Car Sales

20%

By 2030, mobility services will have a significant impact on new car sales

Notes: Light vehicle sales include cars and light commercial vehicles

Source: KPMG UK Mobility 2030 Scenario Analysis – Stretch case

2020 2025 2030

UK Light Vehicles Sold

Sale

s vo

lum

e

Mass penetration of AV mobility services

Mobility 2030




£20,000

£35,000

Upstream

Downstream

Show me the money | Value chain today

The value derived from today’s personal car is driven by upstream & downstream elements with the customer self-aggregating services

Source: KPMG UK Mobility 2030 analysis

Revenues from a personally owned vehicle over a 10 year period where the consumer is the service aggregatorCurrent scenario

Customer

Downstream

Workshop

End of life

RemarketFinance

Fuel retailer

Government

Insurance

Spares

Labour

Upstream

Raw material supplier

OEM

Tier II Tier I

Dealer

£

Car




Downstream

Experience

aggregator

Data

aggregator

Mobility Services Provider

Show me the money | Value chain in 2030

The value derived in 2030 will be weighted towards the downstream with aggregators providing seamless services to customers


Revenues from a EV, AV, MaaS vehicle over a 10 year period, where mobility service providers and integrators

aggregate services for consumers

£25,000

2030 scenario

£275,000

Upstream

Downstream

Retail

Other modes

up to £475,000Integrated values, driving

the customer to the centre

Upstream

Raw material supplier

OEM

Tier II

Tier IBattery Electric

Autonomous

Vehicle

Vehicle Management

as a Service

Finance InsuranceService &

RepairEnergy Infrastructure

Other cars

Media

Other services

Customer

End of Life




Show me the money | Downstream

Downstream growth will be driven by incremental revenue streams enabled by a digital platform

2030

Vehicle Fleet Management

9%

New / Incremental

Revenues

41%

TodayGovernment

45%

Energy

12%

Insurance

14%

Finance

6%

Resale

3%Parking &

Cleaning

13%Parts

7%

Workshop

7%


Workshops

6%

Parking &

Cleaning

5%

Government

15%

Finance

<1%

Insurance

11%

Energy

8%

Parts

8%

£30,000 £225,000 to £475,000





The new ecosystem provides both potential opportunities and challenges for incumbent participants

Growth in financing of fleets, reconfigured consumer finance to support pay per mile services

New tax revenue streams to replace fuel duty – but will continue to support air quality and climate change to accelerate change in car parc

B2C insurance products will phase out but new B2B product opportunities to OEMs and fleet providers will emerge

Demand for traditional fuels will reduce and home/work charging points will grow

Electric cars have far fewer mechanical parts but additional wear and tear

Workshops will see increased throughput but less revenue from accident repair

Traditional showrooms and petrol forecourts will be repurposed

Energy

Government

Insurance

Finance

Workshops

Parts

InfrastructureSource: KPMG UK Mobility 2030 analysis





There are a number of critical success factors which need to be addressed

Customer experience and ownership

Skill at integrating/interconnecting with other ecosystem elements

Consider all three elements of the ecosystem: physical, data and finance

Advanced data analytics capabilities

Secure network and data infrastructure





Sales

▪ UK new car sales to fall upto 20% by 2030. This together with direct online sales by manufacturers

means fewer vehicle showrooms

▪ B2B or Fleet becomes a key customer for the auto industry

▪ Diesel, then petrol and in future non-AV vehicles may see residual value weakening and be subject to

scrappage schemes

Business

Model

▪ Different sales models for Personal Autonomous (B2C) and Autonomous Mobility (B2B)

▪ Rural, commuter and urban areas will become more differentiated and require different business

models

OEMs

▪ Cost structure of facilities adjusted to lower breakeven volume

▪ Connected car offers direct relationship with driver and new service-oriented business models

▪ Refocus from shifting metal to maximising the value of miles travelled

Shifting

Profit

Pools

▪ New Autonomous Mobility Services market entrants (Amazon? Uber? Google?)

▪ Decline in aftermarket collision parts and repairs business; offset by growth in refurbishment parts for

longer mileage vehicles

Mobility 2030

Disruption for auto industry Potential implications in the next 10-15 years

£

© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a



© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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mobility ecosystem 2030 - drive midlands€¦ · sources: department for transport, kpmg global...

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