The Future of Mobility Intelligent Mobility Conference 2017 November 2 nd 2017, Derby, UK Christoph Domke Director, KPMG Mobility 2030
The Future of Mobility Three main disruptive forces will fundamentally transform how people and things move in the future Alternative Powertrains Mobility Value Chain Changing consumer and societal demands Moving people Moving goods Connected & Autonomous Vehicles Mobility as a Service Collaboration in the future Mobility Ecosystem
A day in the life of video
The Future of Mobility A key driver is consumers changing their view of mobility The one user one car model is inefficient for mobility 75% UK households that own a car 95% Time that most cars sit idle each day 101hrs Time spent by Londoners in traffic, per year 31bn Cost of traffic delays to UK motorists in 2016... and ownership costs impact daily lives 10%-20% c.60% Car ownership cost as % household costs Nearly 60% of 18-24 consumers in the UK believe that car owners today will not want to own a car in 2025 Success of new mobility services are demonstrating consumers willingness to adopt Driving Licence 33% The likelihood that a 17-20 year old will have a drivers licence in 2015 Moving me Moving my stuff Sources: Department for Transport, ONS, Forbes, Fleet News, Fortune, KPMG UK Mobility 2030 Analysis, Sky News, KPMG Global Automotive Executive Survey 2017
Alternative Powertrains 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.
The Future of Mobility: Alternative powertrains Electric adoption in passenger cars will grow quickly through from the 2020s, impacting charging infrastructure needs Forecast UK EV growth and expected charging infrastructure 1.7m Anticipated charging infrastructure requirements (2,3) (1 chargepoint required for every 10-15 EVs) 0.5m 16m, 43% Potential disruptive impact of new charging tech (e.g inductive) UK Passenger EV forecast (# cars, % of parc) 13k 0.1m, 0.2% 80k 1m, 2% 5m, 14% 2017 2020 2030 2040 Note: (a) Diagrams not drawn to scale. (b) Assumes a mix of public slow and rapid charging points for every EV; excludes home chargers Source(s): (1) KPMG Mobility 2030 analysis (2) IEA Global EV Outlook 2017, (3) EU Alternative Fuels Infrastructure Directive 2014 (4) ZapMap September 2017
The Future of Mobility: Alternative powertrains This journey will be complex and participants will need to converge at multiple points Govt campaigning, specification & incentivisation Government legislation Govt relaxation of regulatory constraints and free market solution Key 2040 outcomes Energy infrastructure Retailers OEMs Customer Smart grids & DSO transition Smart metering Cost parity Range anxiety overcome Technical standards defined Societal change ToU tariffs & retail DSR Smart (off peak) charging G2V switch embedded 2 Hub charging and Intelligent charge point locating Enhanced charging and battery tech Storage and flexible tools embedded Adequate nationwide public charging infrastructure Generation constraint addressed, if any EV take-up V2G Customer increases technology engaged embedded 1 4 3 Infrastructure and network constraints managed Smart home solutions & energy as a service 4 Smart charging and flexible platforms Seamless customer experience Enough charging infra in right locations Energy capacity constraints removed Charging behaviours and Charging locations optimised Charging infrastructure Increased public charging points Key: 1 Convergence point 16 million EVs Government/policy Dependency / activity Source(s): KPMG Mobility 2030 analysis
The Future of Mobility: Alternative powertrains EV uptake will be strong in LCVs whilst there is no consensus on the winning alternative powertrain in HCVs 100% UK alternative powertrain adoption in LCVs 2014-2040 (1) Global HGV alternative powertrain adoption 2015-2030 (1) 80% 60% 40% 20% Adoption prior to TCO parity driven by policy enforcement and early adopters TCO parity for electric LCVs Alternative powertrain expected to be 66% of sales in 2030 UK Government target for 100% of LCV sales to be alternative powertrain by 2040 (2) 0% 2014 2020 2025 2030 2035 2040 Note: UK natural gas will be later and slower, due to infrastructure limitations Electric adoption in HGVs, will be limited as battery size impacts load, while rapid charging of large batteries will be difficult Natural gas uptake will increase, driven by improvements in infrastructure and the cost per mile saving vs. diesel Diesel will continue to make up the largest proportion of HGV and MCV sales, supplemented by hybrids Source(s): (1) KPMG Mobility 2030 analysis based on KGP sales forecast data (compiled September 2017)
Connected and Autonomous Vehicles
The Future of Mobility: Connected and Autonomous Vehicles Connectivity is already a key part of the commercial vehicle market and will continue to be a major growth area to 2030 FMS / Open Architecture Software Platform Open, customisable platform; customers choose services from marketplace Easy integration of other software Digital freight brokerage Web platform addressing underutilised capacity, with instant load matching, live tracking etc. Reduces empty miles by 8-10% Video safety solution Integrating Video Event Recorders (VER) with telematics minimises impact of accidents and errors Fraud and theft protection etc. Prognostics Standardisation encourages fleets to revisit value placed on telematics In 2020s, predictive analytics will replace factory-fit telematics Electronic logging device (ELD) mandate Adoption expected due to fleet management system penetration In the US, driven by Federal Motor Carrier Safety Administration rules Mobile trucking apps Mainly driver-centric to encourage new drivers to market Wider integration of freight mobility, driver utility, fleet optimisation apps
The Future of Mobility: Connected and Autonomous Vehicles The driver cost-benefit and safety considerations will mean AV adoption in LCVs outpaces passenger cars Share of sales (%) UK AV share of LCV sales (vs. passenger car share) (1) 35% Driver cost-benefit resonates with fleet TCO focus (vs. irrational consumer behaviour) Lumpy fleet procurement Safety considerations a key metric for businesses Policy may drive adoption if safety benefit proven Forecast driver shortages Less aesthetical concern Potential for union resistance 2015 2020 2025 2030 Given platooning trials, OEM investment and simpler highways, AV adoption in HGVs will also outpace passenger cars Notes: Source(s): (a) Vehicle sales include cars and light commercial vehicles (1) KPMG UK Mobility 2030 Scenario Analysis Stretch case
The Future of Mobility: Connected and Autonomous Vehicles New technologies will lead to a greater number of new modes of Moving Goods, including drones and robovans for delivery Urban Consolidation Hubs Packstations / Drop Boxes Direct to Boot Drones Delivery of light weight packages to customer via GPS-enabled drones Autonomous Delivery Vehicles Multi-modal Digitally enabled access to lockers at specified locations for deliveries to customers or tradesman to pick up kit Direct to Boot delivery by giving one time access for carriers to smart boot Self driving delivery robovans and larger AV containers with AV pods, to deliver packages in urban areas For example, the use of an EV van or train as a micro moving warehouse alongside delivery drones Examples Source(s): KPMG Mobility 2030 analysis of public announcement
Mobility as a Service 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.
The Future of Mobility: Mobility as a Service The sharing economy will have penetrated the mobility sector, will 50% of current UK car owners not owning a vehicle by 2030 59% of 18-24 consumers believe that more than half of all car owners today will not want to own a car in 2025 100% 80% 60% 40% 20% 0% Consumer age band - 2016 Forecast age band in 2030: 59% 100% 34% 80% 60% 29% 58 % 36% 13% 9% 25% 58% of 9% executives believe that more than half of all car owners today will not want to own a car in 2025 33% 22% 40% 82% 58% 20 25% 63% % Agree 44% 20% 35% Neutral 22 17% % Disagree 8% 0% 18-24 25-30 Global 31-40 41-50 51-65 >65 32-38 39-53 Executives 45-54 55-64 65-79 >79 58 % 20 % 22 % Global Executives 58% of executives believe that more than half of all car owners today will not want to own a car in 2025 Agree Neutral Disagree Source: KPMG Global Automotive Executive Survey 2017 Younger consumers are much more likely to agree that personal vehicle ownership will decline
The Future of Mobility: Mobility as a Service The cost of MaaS provision will be lower than private ownership (on a cost per mile basis), encouraging take-up Cost per mile UK modes National & Metropolitan Rail Electrified AV Mobility Services 2030 MaaS provision could be up to 40% cheaper than private ownership Taxi c. 5.00 Local/National bus Private Car Ride-sharing services 0.20-0.40 Size indicates relative number of miles travelled per capita per year Sources: Department for Transport, Transport for London, KPMG UK Mobility 2030 Scenario Analysis Stretch case
The Future of Mobility: Mobility as a Service Incumbents will also look to leverage the sharing economy for solutions in the complex and congested last mile delivery Sharing economy in last mile delivery Customer Platform Selected examples App-based on-demand shipping, connecting carriers and customers The carrier collects, packages and ships at the lowest possible cost Retailer etc. B2B and B2C delivery within the hour, using retail outlets as mini-depots Sharing Economy Service provider Proprietary forecasting and dispatch tech to match couriers to demand Efficient transport logistics Optimised routes, less unused capacity and pooled transport volumes Addressing peak requirements Sharing concepts particularly valuable at peak times given existing congestion Service focused logistics Pay per minute or book guaranteed slot propositions aligned with service focused carrier needs Social delivery model that goes even further as a P2P solution Matches deliveries with people going that way, marketplace sets pricing Crowd-sourcing, shared platform, used to place delivery contracts for corporate and private commercial vehicle owners to fulfil Source(s): KPMG Mobility 2030 analysis of public announcements
Final thoughts
The Future of Mobility Strong growth is expected in passenger cars across EV, AV and MaaS UK Estimates Passenger Vehicles EV sales as a % of sales EV parc as a % of parc 54% EV 35% penetration 20% (2017-2040) 9% 43%, 16m 25%, 9m 2%, 1m 6%, 2m 14%, 5m 2015 2020 2025 2030 2035 2040 MaaS penetration (2017-2040) AV penetration (2017-2040) MaaS as a % of sales MaaS as a % of parc 15% 100% 25% 30% 5% 15%, 5m 0.1% 1%, 0m 1%, 1m 9%, 3m 4%, 1m 2015 2020 2025 2030 2035 2040 AV MaaS as a % of sales 91% 55% AV MaaS as a % of parc 42%, 15m 24% 20%, 7m 9% 1%, 0m 6%, 2m Projected roadmap EV 2015 2020 2025 2030 2035 2040 EV TCO parity Declining battery with ICE reached UK and France - end sales costs reduce EV TCO in early 2020s of petrol/ diesel vehicles Up to 50% of current UK car owners may no longer own a car MaaS AV L3 (a) L4 (b) L5 Source: KPMG analysis of publically available information and SME local market insight Uptake of AV Note: (a) AV returns to human control if the system cannot function correctly; (b) No driver interaction needed and the car will stop itself if the system fails
The Future of Mobility Adoption of alternative powertrains and AV in commercial vehicles will depend upon vehicle class and use case LCV MCV HCV Gross vehicle weight (GVW) <3.5t 3.5-16t >16t 2030 preferred powertrain Electric (BEV and PHEV) Diesel; limited EV and alternative fuels uptake Diesel; no alternative fuels consensus 2030 AV primary use cases Last-mile and urban deliveries Mix of LCV and HCV Bulk freight (e.g. platooning on motorways) 2030 MaaS use cases Sharing economy delivery Mix of LCV and HCV Digital freight brokerage
The Future of Mobility Three key implications to reflect on 1 2 3 Explosion in value and investment activity (across all parts of the value chain) New business model concepts are emerging frequently requiring new collaboration and partnerships
The Future of Mobility KPMG s Mobility Ecosystem 2030 network is already bringing together participants across sectors and value chains Mobility Ecosystem 2030 Network Proposed core themes for the April 2018 event Collaboration between KPMG and Ford to convene a collaborative network Executive-level attendees from all sectors impacted by mobility trends Energy and Moving Goods ecosystems were the focus of the last October 2017 event Strong emphasis on discussion and insight sharing, new business models, and collaborative partnerships We will introduce themes for the fourth event in 2018 Multi-Modal Transport Financial Services Data and Cyber Security Focus on Start-ups We will continue to convene up to 100 top executives from industry leading organisations across the ecosystem, who all have a stake in the architecture and implications of Mobility 2030
Key contact in relation to this document Thank you Christoph Domke Director, Mobility2030, KPMG Global Strategy Group, +44(0)7557179843 christoph.domke@kpmg.co.uk The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 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.