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1. Global EV and autonomous vehicle technologies adoption.

It has been reported that the EV adoption appears to be stalled with the expected growth not really materialising. At the end of 2023 and continuing in 2024, there is a marked pullback in consumer’s willingness to hand over cash for EV’s and may result in a longer acceptance journey than first anticipated.

More advances are still to appear in the development of autonomous technologies even with a level of human override built in. It’s being recognised that the desire for a fully autonomous vehicle will need to extend out at least another 10 years. Ford’s joint venture with VW in developing Argo AI was shut down in 2022, Argo AI, was an autonomous vehicle start-up that burst on the scene in 2017 stacked with a $1 billion investment.

General Motors experienced its own setbacks during the development of its Cruise Origin driverless vehicle in 2023, with no expectation of any advances or production throughout 2024. So more time needed here!

2. New players entering the market

Will the growth of Indian and Chinese automakers affect the market? A new wave of Chinese and Indian automakers are beginning to market and sell vehicles in Europe, US, and Africa, where legacy brands like Toyota and Volkswagen are now losing market share. Just how successful they will be in these markets will be interesting, given that the established competition is very well known.

Reports are saying that India is poised to become the world’s top automobile manufacturer during the next 5-10 years. India is currently number three in the world, having overtaken Japan and leaving only the US and China ahead. For instance, if China can produce an EV that is affordable for the average consumer, without the need for buyer incentives or government subsidies, such a cultural shift could materialise.

China may then be able to offer automobiles that are 20-30% cheaper than the established names, making them particularly appealing in a price-sensitive market. The success of these somewhat unknown brands will hinge on their understanding and adaptation to regional consumer preferences.

The newcomers may have an advantage because they started off as a pure EV company. Traditional OEMs will need to manage the transition of their existing internal combustion engine (ICE) fleet while introducing new EVs to the market, which is already causing issues for the legacy brands like Ford, VW and GM.

3. Vehicle use/ownership models

People are still banging on about Point to Point transport as an important issue facing vehicle manufacture. For sure this type of system may work for large populated urban cities like New York, Paris and London, however, it doesn’t translate to many other types of transport needs like industrial, commercial and personal use.

Millennial consumers have demonstrated a minor interest in vehicle ownership and have shown a greater willingness to utilise ride-share type services. This has spawned discussions of alternatives to the legacy ownership model, and, potentially, a lack of ownership altogether.

If that ends up being the case, how would this impact the automotive industry overall? A trend like this may lead to a decrease in individual car sales, used car sales and open up a new revenue stream for a service-based model to swing into action.

August 2024