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1Pforzheim University of Applied Sciences

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Serdecznie Witamy

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ЛАСКАВО ПРОСИМО

Mirë se vini

Hoşgeldiniz

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V e l k o m m e n

W ë l l k o m m e n

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مرحباLaipni lūdzam

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歓迎

B i e n v e n i d o

Wezon

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Sugeng Rawuh

sাগতমSelamat Datang

Dobro DošliV i t a j t e

V í t e j t eДобре дошли

Mirëse ErdheMbemba

Mekona

Isten hozott

Ongi Etorriברוך הבא

բարի գալուստ


Guy FournierHenning Hinderer

Shapers of the future mobility value chain

Conference:Technological pathways to low carbon: Competition and collaboration between Europe and emerging Asia

Bonn, 7-8 April, 2014Deutsches Institut für Entwicklungspolitik/ German Development Institute


Introduction

Current value chain

Drivers of the new mobility paradigm

Shaking the market: Projected New value chain

Potential Shapers of the new value chain

Conclusion

Agenda: Shapers of the future mobility value chain


Introduction

Current value chain




Conclusion



Current and future value chain of mobility

Headline in the newspaperDie Welt am Sonntag, 6th April 2014Bicycles are conquering Metropolises


Raw Materials

Parts & compo-nents

Mobility services provision

Infra-structure develop-

ment

Vehicle design & sales

OEMs

Suppliers

Utilities

Third parties/new Parties

Energy Supply,Storage

Current core business Potential for expansion in the value chain

Source: modified, based on Roland Berger (2009), p. 80

Customers

Vehicle HW, SW, content

extention

Current and future value chain of mobility



Introduction

Current mobility value chain


Shaking the market: projected new mobility value chain

Potential Shapers of the new mobility value chain

Conclusion


Rising urbanization (Congestions, Parking Penury, Land use etc.)

Acci-dents

Global WarmingScarcity of resources

Dependency on EnergyExternal costs of mobility

• Growing environmental awareness of the population

• Loosing significance in image and status symbol of cars

• Legislative measures • Regulative intervention on local,

national, regional or global level

“Low carbon economy” (similar to EU or in other regions)

• Change of infrastructure(energy, IT)

• Change of standardization• New business opportunities

(e.g. integrated services)

• New customer requirements (e.g. Kuruma Banare etc.)

• New offerings (OEM, supplier, raw materials)

• New mobility business models (e.g. car sharing)

New Mobility Paradigm(low carbon oriented, energy efficient, new mobility services, intermodality)

Tech

nolo

gica

l cha

nges

(In

nova

tion

in b

atte

ry,

fuel

s, p

ower

trai

n, li

ght-w

eigh

t, pr

oduc

tion

and

dist

ribut

ion

of e

nerg

y, I

T in

fras

truc

ture

etc

.)

Current Mobility Paradigm(based on cheap fossil fuel energy, high CO2 exhausts, individual mobility)

Soci

al c

hang

es, c

hang

es in

soc

iety



Drivers of the new mobility paradigm Dependency on Energy (World Energy Outlook 2012)

source: IEA 2013


Megatrends among others: how to address these challenges?

Collaborative Consumption

Global Warming Scarcity of resources

Vélib'

Current scenario: temperature increase of between 3.6 °C and 5.3 °C (IEA 2013)

Non renewable and renewables, especially energy

New Mobility Paradigm(low carbon oriented, energy efficient, new mobility services, intermodality)


Can mobility stay affordable: on the verge of a new revolution?

Inventingsustainable mobility

- Scarcety of oil

- Dependency

- Global warming

- Congestion etc.

Otto motor

Diesel motorLohman Porsche

Electric motor

Ford T


The Globalisation Debate: what are the benefits?- Limited availability of natural resources -

the rate of petroleumproduction tends to follow a bell-shaped curve (peak oilproduction)

ASPO estimation: 2008 or 2010

USA, OPEP and Oilcompanies: 2030, Criticism: itdoes not consider

– likely resource growth,– application of new

technology,– basic commercial factors,– the impact of geopolitics

on production

But economic development in China and India could advancethe date of the peak

Hubbert peak theory (non OPEC, non FSU Oil production)


Scarcety of oil: increased risk for energy security

Geology, depletion ofresources

Lack of investment

Production policy ofthe key regions

Source: www.energywatchgroup.org

High risk of a supply crunch


World oil production

IEA: World energy Outlook 2008


Natural liquid gas

Non conventional crude oil (incl. Canadian oil sands)

Crude oil – additional EOR (Enhanced Oil Recovery)

Crude oil – fields yet to be found

Crude oil – fields yet to be developed

Crude oil – currently producing fields

Energy challenge: dependence on oil

Source: International Energy Agency 2008

Source: Energy Information Administration 2009, p. 2

• World fossil fuel production increased by 2.9% in 2008, reaching the highest level ever recorded

• Current price for crude oil: 78 $/barrel (brent, October 2009)

• Estimation of EIA: 120-180 $/barrel in 2030

• Estimation of IEA: 200 $/barrel in 2030


Current energy policies are not sustainable

Source: IEA (International Energy Agency) 2010

Non conventional crude oil (incl. oil sand)

Natural liquid gas

Crude oil – fields yet to be found

Crude oil – fields yet to be developed

Crude oil – currently producing fields

Drivers of the new mobility paradigm Scarcity of resources: Peak oil


Drivers of the new mobility paradigm Scarcity of resources: Peak oil

Current energy policies are not sustainable

18Pforzheim University of Applied SciencesInstitut für Zukunftsstudien und Technologiebewertung (IZT), adelphi, Berlin 2011

Vuln

erab

ility

Risk of shortages in supplies

Rare EarthsRare Earths

Copper: for many applications, no substitute known

Niobium: high-strength, lightweight steels

Rhenium: processing of biomass to fuel

Automotive industry: Rare Earths:

Electromobility, catalyser Lithium: Batteries

Earths and stone

Metals

Relevant for futureautomobile needs

Drivers of the new mobility paradigm Scarcity of resources: raw material criticality in Germany


Screening of raw material criticality in Germany (equal weighting, Medium / long term indicators)

Institut für Zukunftsstudien und Technologiebewertung (IZT), adelphi, Berlin 2011

Risk of shortages in supplies

Rare EarthsRare Earths

Vuln

erab

ility

Earths and stone

Metals

Relevant for futureautomobile needs


Drivers of the new mobility paradigm Limited availability of raw materials

In 2014, 95% of rare earths are comingfrom China

- USA, Europe and Japan are investingin alternatives

- New mines will open (Mount Weld en Australie) or will beopen soon

Rare Earths Production


Estimation of the quantitative contribution and the effect of latency measures to improve the supply of raw materials

Institut für Zukunftsstudien und Technologiebewertung (IZT), adelphi, Berlin 2011

Substitution

Recycling

Develop mining in home country

Develop mining in foreign countries

Trade policy


Drivers of the new mobility paradigm Limited resources

Cradle to grave: Life Cycle Assessment from resource extraction ('cradle') to use phase and disposal phase ('grave'):

– usefull materials are destroyed or wasted– downcycling


Until yet:

Incineration plant: major risk of generating and dispersing contaminants and toxic substances:

– copper, which is present in printed circuit boards and cables, acts a catalyst for dioxin formation when flame-retardants are incinerated

– hazardous waste (disposal area)– Ash (road construction)

=> loss valuable of trace elements which could have been recovered had they been sorted and processed separately

15.000 t cupper are wasted in Germany in 1 Year (about 100 Mio. € )

Production of 1 ton cupper necessitates 600t hazardous waste

=> sort and process materials separately to recover them

Circular economy: exemples


Biomimetic approach

Definition of Cradle to Cradle®

– Instead of ecological efficiency (≈ LCA), ecological effectiveness (≈ „consistency“)

– Nature as a model, example cherry tree:

• copious blossoms and fruit "inefficient and wasteful!" but „effective“

• nutrients that nourish the ecosystem, everything around it

• without depleting its environment

– Holistic approach

Cradle to Cradle®

24

Waste = Food

Michael Braungart and William McDonough


Biological nutrients

Compostable

Cradle to Cradle®: material as nutrients

circular economy


Cradle to Cradle®: material as nutrients

Eco-leasing: for example for cars, televisions, carpets, computers and refrigerators

Technical nutrientsNot compostable

Productshave to be conceived in a way that allows them to be decomposed easily after use

circular economy


Motivation - use of resources: Nissan Green Program

95% resource recovery rate for cars at the end-of-life stage in Japan.

100% resource recovery rate at domestic production plants in Japan


Au final, cette mesure de circulation alternée donne un formidable coup de projecteur aux solutions de transport alternatives telles que le covoiturage, les transports en commun (gratuits) ou encore la voiture électrique.


Drivers of the new mobility paradigm Urbanisation

More than 50% of the worldpopulation lives in urban areas

– 72% of the European population

– 81% of the US population

75% of the future journeys will be done in urban areas

Source: United Nations 2005



More single households

50% of the world population lives in urban areas

– 72% of the European population– 81% of the US population

75% of the future journeys will bedone in urban areas

– 15-20% of the cars in France never leave town, 30% of thevehicles are second cars

75% of European drivers drive theircars less than 40 km in one day

– Germany: 38,5km– France: 35,3km– UK: 29,9km

Source: Weyman 2007


World Urbanization Prospects

http://www.un.org/esa/population/publications/WUP2005/2005wup.htm



Cost estimation in Europe:– Global warming– Noise 1,1% GDP– Air pollution– Traffic Congestion 1,1% GDP

The aim of EU is to internalise the external costs of transportation

“Greening Transport Package“

Target for the EU to reduce its CO2 emissions by 20% until 2020, or 30% if a broader international agreement is reached

Drivers of the new mobility paradigm Transportation as a driver of external costs

Paris March 2014


Drivers of the new mobility paradigm Future CO2 emissions objectives in Europe

ICE powertrain optimization is unlikely to be enough to meet European CO2 emission limits of 95 g/km by 2020

Source: Roland Berger 2009, p. 28, modified

2040 (est.)

110 g/km

30 g/km

Germany 2010: 151,2 g/km

European Union 2010: 140,3 g/km

France 2010: 130,5 g/km

20212025 (est.)68-78 g/km

CO2 fleet emission2020 (est.)


Drivers of the new mobility paradigm:Kuruma Banare (車離れ)

Japan: – Between 2001 and 2005 the Japanese

without vehicles raised from 21,3 to 32,1 %

– From 20 to 50y., more important than a car:• Internet (74 %)• Mobile (56 %)

– Other reasons (Jama):• Growing urbanisation (congestion)• Local public transportation• Regulation & taxes

A similar development can be observe in Germany and France

5,4 millions in 2013


Drivers of the new mobility paradigm: Kuruma Banare (車離れ)

JAMA - Japan Automobile Manufacturers Association

Japan

Kuruma Banare means "demotorization" - a trend that has been affecting the Japanese auto market since 1990

Expeted car ownership in April 2014: 4.75 millionsOwner [Population (Total) 2012: 127.6 million inhabitants]

Reasons for decrease

The youth have fallen out of love with the automobile Smartphones and laptops getting more important than

owning a car Very high taxes (4.1 x greater than in USA in 2008) Growing urbanisation (congestion) Local public transportation

Similar development can be observe in Germany and France!

Decrease of about 1.15 millionmotorcycles sales

0.35 millions owner(sales) in 2013

Decrease of about 3 millioncar sales

5.46 millions owner(sales) in 2013


A trend toward "demotorization" is developing mainly amongthe younger generation in industrial countriesExample: Japan ‐ Ranking of interests of university students [%]

PAST STUDENTS (now in 40s, 50s) PAST STUDENTS (now in 20s, 30s) CURRENT STUDENTS

1 PC2 Fashion3 Communication devices4 Domestic travel5 Music6 Dining out7 Foreign travel8 Portable Music Player9 Reading10 Cars11 Movies12 Animation, Manga13 Video games14 Camera15 Watches16 Cosmetics17 TV18 Jewelry19 Licentiates, Learning20 Audio 14,3

1518,318,72224,32525,325,325,325,3313132,733,73737,339,747,750,7 1 PC

2 Fashion3 Portable Music Player4 Communication devices5 Domestic travel6 Music7 Reading8 Animation, Manga9 Video games10 Dining out11 Movies 12 Camera13 Foreign travel14 TV15 Licentiates, Learning16 Cosmetics17 Cars18 Watches19 Furniture, Interiors20 Jewelry 17,9

21,722,622,826,227,328,833,93535,537,638,44242,943,74449,950,653,962,11 Fashion

2 Domestic travel3 Dining out4 Reading5 Music6 Movies 7 Cars8 PC9 Foreign travel10 Audio11 Camera12 TV13 Animation, Manga14 Jewelry15 Sport goods16 Cosmetics17 Watches18 Licentiates, Learning19 Portable Music Player20 Motorcycles 9,7

10,010,311,312,314,015,015,717,019,720,323,725,727,027,731,331,732,034,035,7

Drivers of the new mobility paradigm:Kuruma Banare (Japan)

Kalmbach, Ralf u.a. (2011), p. 26.


In France, similar results: IFOP Study 2010

Teichmann 2010

Drivers of the new mobility paradigm:Kuruma Banare (Germany)


Drivers of the new mobility paradigm:Sharing Economy - car-sharing

Growing diversity of car-sharing systems

1. Two-way models (most common model)2. Peer-to-peer car-sharing (33 operators worldwide)3. One-way models (e.g. Car2Go, DriveNow)

Source: embarq

Collaborative Consumption and

Car-Sharing scales up worldwide


Drivers of the new mobility paradigm Cradle to Cradle®

„Wir müssen die Intelligenz endlich an den Anfang der Produktentwicklung stellen.“

Braungart, Der Kreisläufer (2011)


Drivers of the new mobility paradigm Circular Economy

Closed-loop life-cycle systems

http://www.ellenmacarthurfoundation.org/circular-economy/circular-economy/interactive-system-diagram


Drivers of the new mobility paradigm Circular Economy


McKinsey 2014

Since 2009, resource prices have rebounded more quickly than global economic output


Circular Economy Closed-loop life-cycle systems

McKinsey 2014



McKinsey 2014

Since 2009, resource prices have rebounded more quickly than global economic output



McKinsey 2014


Drivers of the new mobility paradigm:Digital Economy: connected cars

Source: embarq

Digital natives are expecting „smartphone on wheels“



http://images.zeit.de/auto/2013-04/neuwagenkaeufer1.jpg http://images.zeit.de/auto/2013-04/neuwagenkaeufer2.jpgZeit-Online; Junge Leute pfeifen auf Neuwagen, 18. April 2013


Future CO2 emissions objectives in Europe

Note: The size of the bubble is proportional to the number of vehicles registered in Europe.

Distance to 2012 target by individual manufacturers in 2010 (only manufacturers registering > 100 000 vehicles in Europe)

Thirty-two manufacturers, representing almost 80 % of 2010 registrations in the EU, already achieve their 2012 specific emissions targets two years in advance

www.eea.europa.eu


Shaking the marketSpeed of transformation

Speed oftransformation

Scarcityof oil and other valuable

resources

Technology(Innovation, Energy

paths)

Industry(OEM, Supplier)

Customer(needs, technologicalattractiveness, new

business and finance models, price)

Infrastructure(bio fuel, electricity

grid, Internet)

Politics(Regulation:

environmental constraints, dependency)


Shaking the marketSpeed of transformation

Depends on price of crude oil

Environmental regulation (governments, town) and incentives,

Technological evolution, availability of Li-Ion, technological attractiveness

Customer perception and acceptance:– New lifestyle– New technique (with growing range, growing potential customer)– New business and finance models (better place, leasing)– Cost savings in cost of use (maintenance, fuel)



Introduction





Conclusion


Effects on the value chain of mobility:New business models and new business opportunities

Raw Materials

Parts & compo-nents



ment



Vehicle HW & SW extension

www

Reuse/Recycling


Rajouter internet as enabler for Customer centered orientation

Satisfy the customer mobility needs


Collaborative consumption, (community consumption), mobilityservices



Introduction

Current value chain




Conclusion


Effects on the value chain of mobility:Potential shapers of the value chain

Raw Materials

Parts & compo-nents



ment




Reuse, Reduce, Recycle

ShaperControl the value chainthrough raw materials


Secure the supply of rawmaterials (e.g. rare earths, niob, cobalt, cupper) and thevalue Chain through:

– Warehouse Management

– Reduce,– Reuse,– Recycling materials

– Substitution of material

– Engagement andinvestments in mining

– Influence policy

Raw Materials

Parts & compo-nents


Reuse, Reduce, Recycle

ShaperControl the value chainthrough raw materials

Effects on the value chain of mobilityShaper through raw materials


Effects on the value chain of mobility: Flow of the reuse of rare earth metals

„Cradle to Cradle® “ instead of „cradleto grave“

Eco-leasing

http://world.honda.com/news/2012/c120417Reuse-Rare-Earth-Metals/index.html

Reuse

Reuse

Reuse


The example of Honda


Nissan Green Program

95% resource recovery rate for cars at the end-of-life stage in Japan.

100% resource recovery rate at domestic production plants in Japan


Motivation - use of resources: end-of-life vehicle recycling (Renault)

Beneficial reuse in the automotive industry :

– Lower in Price (ca. 40%)– environmental benefits

• Reduced material consumption

• Reduced CO2 emissions• Vehicle can continue to be

used due to favorable repair prices

• (not a total loss)– Preserving and creating jobs that

can be difficult to shift out of the country

Insurers are drivers

3 requirements:

– retraceability– Standard for quality– Same quality of service as

for new parts

Problems:

– Yield is lower

Market: 53 billion for spare parts, 2% of which are reused (F in 2009)

Objective: recover 95% of the mass of each vehicle by 2015


Effects on the value chain of mobility:Potential shapers of the value chain

Raw Materials

Parts & compo-nents



ment




ShaperControl the value chain

through customer relationship and lock-in strategy


Shaper-Adapter-Relationship in internet

Effects on the value chain of mobility:Shaper and Adapter in the digital economy

Shapers- coordinate,- provide information,- provide a platform, and

connect the development network with customers

- create standards and hence

- lock-in customers permanently

Adapters - focus on sub-products

for this network

Result:- co-opetition in the

business web

AdapterInternal circle

AdapterExternal circle

RegisteredAdapter

independantAdapter

Franz 2003


Innovation cycle in the automotive industry in comparaison with IT Industry

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Lebensdauer (48

‐84 Mon

ate)

Entwicklun

gsprozess (36

‐48 Mon

ate)

Entwicklun

gsprozess (6‐9 Mon

ate)

Lebensdauer (6‐24

Mon

ate)

Die Lebensdauer eines Fahrzeugs ist wesentlich länger als der Innovationszyklus in der Informations‐ und Kommunikationstechnologie

Zeitlicher Ablauf der Produktentwicklungsprozesse: Automobil‐ gegenüber IKT‐Produkt

AUTO HANDY

Markteinführung

Konzept 1

Anforderung 2

Designentscheidung/entgültige Spezifikation 3

Prototyp/Test 4

Anlauf Produktion 5

Wachstum 6

Reife 7

12345

6

7

8

KonzeptAnforderungDesignentscheidung/entgültige Spezifikation

Prototyp/TestAnlauf Produktion

Wachstum

Reife

Rückgang


Potential future mobility value chain with Shaper-Adapter-Relationship

Effects on the value chain of mobilityPotential Shaper and Adapter in the new mobility value chain

Transfer theBusiness Web Model to a possible futureMobility Value Chain

Customer orientatedbusiness modelsimilar to thedigital economy


The e-mobility ecosystem: Selling Mobility

Customer needs:

• Vehicle suited to trip purpose• price performance ratio • Support of any problem• Flexible and reliable service

Ecosystem

Benefits for the customer:

• Lowering transaction costs• The right to use the car can be combined with other

products or services• Products and services fits perfect together• Adjustment to each individual user by personal profiles

Customer contact

Locked into an ecosytem

CustomerEffects on the value chain of mobilityShaper providing a mobility ecosystem?

Customer orientatedbusiness model


Switching costs:

Cost of searching(products or alternatives)

investment costs,learning costs,synthetic costsPychological

based

Lock-in through:• Innovation• Customer contact, Vendor contract• Technology (e.g. specifications, closed platform)• Brand specific training

The e-mobility ecosystem: Lock-In-Strategy,leading to a natural monopoly

Opportunity for the shaper:• Economies of scale• Economies of scope• Enhance the loyality of customers• Control over the whole value chain in

terms of quality & costs

Ecosystem

Customer contact



Introduction





Conclusion


Conclusion:

Thank you for your attention! Prof. Dr. Guy Fournier

Prof. Dr. Henning HindererPforzheim University, [email protected]

“The best way to predict the future is to create it“Peter F. Drucker

The current mobility paradigm based on cheap fossil fuel energy, high CO2exhausts and individual mobility will move to:

– An intermodal mobility with low carbon emissions and new mobility services.

– New business models and new business opportunities will be developed and

– New players and new shapers in the value chain will arise.

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