With disruption becoming reality and shaping the sector, the convergence of key trends promises more to come. Electrification, autonomous driving, shared mobility, and connectivity are together enabling more alternatives than ever and simultaneously infusing more uncertainty.
From an OEM’s perspective, barriers to entry have never been lower and the outlook favors consolidation for scale. Tesla and the likes, software players and localization potential all present imminent threats. The transition will be costly, but the change is vital to the segment’s future. Key uncertainties include:
- How much ICE to include in the production mix?
- How fast can the transition occur?
- What is the lowest cost / highest value option for the transformation?
For the new entrants, the opportunity lies in cost curves, agility in identifying tech enablers and speed of market adoption.
- How fast will regulation respond?
- How soon will competition catch up?
- How can the disruptor be disrupted?
Policymakers and governments are also looking into the new trends from their economic impact with key questions raised at the strategic level:
- Should they speed up or slow the transition and how should regulation react and enable?
- What are the short and long impacts of the transition on government revenues and expenditures?
For each of these segments, some decisions are clear cut, yet the major value exits in bets.
At Grenoble Partners, we advise clients on how to capture the value of uncertainty around the future of mobility with a focus on the target tech-mix and how to lead the transition.