Preparing for the Mobility Revolution

Will new tech lead to sustainable mobility?
July 2017

Mobility as we know it today cannot be qualified as sustainable when we consider its impact, whether short or long term, on people and our planet. Depending on the region in the world, current mobility solutions are seldom socially inclusive (unequal access to transportation) and they  often contribute to destroying our environment (pollution, global warming, excessive use of natural resources).

 

Will the ongoing, deep transformation of mobility, ie electrification, autonomous and connected vehicles or new shared mobility solutions, contribute to making mobility as a whole more sustainable? Let’s consider the impact of this transformation on people and our planet, leaving aside the third pillar of sustainability, i.e. economic benefits.

 

Impact on people

Public transit —by and large mass transit —routes are mostly organized along high traffic corridors, leaving low density areas with little or no mobility solutions. Those with insufficient means to afford a car are often left behind, as the lack of transportation makes it difficult for them to find and hold a job.

 

The emergence of more flexible, cheaper mobility solutions will progressively make it easier for more people to get around. For instance, a typical US city offering few public bus lines will likely improve its service quality by shifting as least some of its budget to pooled ride sharing solutions. Citizens will benefit from a more flexible, point-to-point mobility service which is also likely to be less expensive in the end. This shift could greatly benefit those typically left behind, either for economic or health reasons. However, private companies will most likely focus their service to the most profitable areas / routes unless local governments properly regulate the conditions under which they operate.

 

In Europe, public transit networks are much denser thanks to a multi-modal approach and generally more compact urban areas. The emergence of autonomous shuttles (e.g. EasyMile or Navya) provides an additional solution to the existing mobility options, thus allowing to more finely tailor the best suited mode according to specific needs (traffic, operating hours, frequency …). Similarly, ride sharing services — whether short distance (e.g. Uber) or long distance (e.g. BlaBlaCar), individual or pooled, with fixed routes of point-to-point service — have already largely increased the mobility alternatives as well as the overall geographic coverage. This application of the sharing economy to mobility also provides easy access to driving jobs. Thanks to these services, mobility will provide more social inclusiveness.

 

Whereas new mobility services will, in general, include more people in society, autonomous vehicles (AV) will have the opposite effect. In effect, driving is a job for a significant portion of the population. AVs will progressively eliminate the need for cab and truck drivers (several million in the US alone), who will have to be trained for and reallocated to others jobs. Future regulations for AVs must take this point into consideration and not only consider risks and liabilities. This social dimension is the reason why the Indian Premier recently expressed his opposition to the emergence of AVs.

 

If AVs will create a significant shift in jobs, they can potentially lead to a massive reduction in road-related deaths, which currently amount to 25 to 35k per year in both the US and Europe. Indeed, human errors are the cause for 90-95% of accidents. Also, the progressive replacement of internal combustion engine-powered (ICE) vehicles by electric vehicles (EV) should result in a drastic reduction in premature deaths caused from outdoor air pollution (2.4 million estimated by the UN). Overall, electric and autonomous vehicles will be beneficial for society.

 

Impact on our planet

Global warming is real and transportation is a significant contributor. It also relies overwhelmingly on fossil fuel, absorbing 20-25% of global energy consumption. Over the past years, cities like London, Paris and Rome have been putting increasing pressure on drivers to drastically reduce the use of personal cars in their city centers in an effort to reduce congestion and more importantly to lower CO2 and NOx levels. The issue of air pollution was exacerbated last year by Volkswagen Group’s “Diesel Gate”, which contributed to driving Diesel market penetration in Europe — from 54% in 2014 to 50% in 2016; and this drop in gaining momentum.

 

Solutions to pure ICE-powered vehicles exist in different varieties, from 48 volt (recently introduced) or 400 volt hybrid, to plug-in hybrid (PHEV) and full battery electric (BEV) — and potentially fuel cell later. Last year, China was by far the largest market for such vehicles with 260k BEVs and 90k PHEVs sold. Europe came in second with 90k BEVs and 132k PHEVs, followed by the US with 84k BEVs and 73k PHEVs. This represented respectively 1.5%, 1.3% and 0.9% of total vehicles sold in each market, and a global increase of 40% vs 2015.

 

In recent weeks, in an effort to accelerate the pace towards green transportation, several — mostly European — state officials have announced their intention to progressively eliminate ICE vehicles. Norway, a large oil producer, has long been the leader in green mobility, featuring the highest EV penetration (until recently Tesla’s 2nd market after the US): ICE sales will be banned there by 2025. France also announced a similar ban by 2040. The UK just reported a similar move by 2040 with a plan to removed all ICE vehicles from the roads by 2050. More recently, India and Germany are considering doing the same by 2030. 

 

In the shorter term, several major European cities (eg Paris, Stuttgart) are planning to ban diesel-powered cars from 2025, forcing a shift to gas and, better yet, electric vehicles. China is also taking a drastic measure to address the major pollution issue in its major cities. The government’s New Energy Vehicle (NEV) program aims for zero emission vehicles to reach 8% of all units sold in 2018 and 12% in 2020. In addition, the whole fleet of Beijing taxis (70,000) must be EVs by 2022 and all new taxis introduced in Shenzhen must currently be EVs.

 

How will OEMs cope with this necessary trend? Tesla is showing the way, and the coming year will prove whether the Silicon Valley company can become mainstream and financially viable with Model 3. It must be noted that Tesla benefits from having no legacy ICE assets. Volvo recently announced that all new vehicles and 100% of their production will be electrified after respectively 2019 and 2025. Daimler, Volkswagen and BMW indicated last year that 15% to 25% of their sales would be electrified by 2025. Electric product plans have been boosted across the board and a number of new products will hit the market starting in 2019. Even the previously reluctant Toyota announced in late 2016 they will launch a BEV, now planned for 2022. The movement is in full steam.

 

Will people buy these cars? A survey performed by Deloitte in Jan 2017 regarding moving away from gas and diesel engine showed that they want to. Fifty three percent of Chinese respondents would prefer a BEV, PHEV or an other alternative to ICE for their next vehicle, followed by Japanese with 42%, Korean 42%, German 28%, Indian 27% and American 24%. EVs’ other pain points, namely price, autonomy and availably of charging points, are progressively being removed (see this article for more info), which will make the transition to EVs possible.

 

Electrification will apply not only to cars but also to 2-wheelers and buses. CityScoot, Scoot, SwiftMile already offer shared e-scooters and e-bikes in Paris and the San Francisco area. As far as e-buses go, China is again the largest market with 160k vehicles sold in 2016. It is anticipated that 25% of new buses sold globally in 2025 will be electric, 25% powered by natural gas and the  balance still by diesel engine, vs largely diesel today.

 

The electrification of mobility is great for the environment where mobility is consumed but not necessarily for the planet as a whole as electricity itself is indeed often dirty. This transition must be accompanied by the greening of electricity production. Coal is still used for over 70% of electricity produced in China, 46% in Germany, 34% in the US, 23% in the UK and 2% in France. Symmetrically, renewable energies represent respectively over 22%, 26%, 13%, 19% and 16% of the mix in the same countries (Source: World Bank). Norway, the global leader in electrified mobility, generates 98% of its electricity with renewable energy … a great example.

 

Conclusion

Engineers, regulators and consumers are coming together to accelerate the transition towards sustainable mobility. New solutions will generate economic benefits (i.e. lower cost of transportation), in particular in countries with lower purchasing power. Sustainability will become a reality when people have equal access to clean means of transportation.

Marc Amblard

Also published on LinkedIn (https://goo.gl/4QJbU4)

© 2020 by Orsay Consulting