Automotive industry: The next 10 years...taxis but also grew the overall market by 100%… Jan-10...
Transcript of Automotive industry: The next 10 years...taxis but also grew the overall market by 100%… Jan-10...
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2 DECEMBER 2019
Xavier Mosquet, Managing Director and Senior Partner
Automotive industry: The next 10 years
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Implications
Markets
Trends
For additional information: [email protected]
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Auto sector has enjoyed an unprecedented period of growth
4 years
('62-'65)
9 years+?
('10-'18)
5 years
('96-'00)
3 years
('83-'85)
3 years
('76-'78)
3 years
('71-'73)
3 years
('92-'94)
0
15
10
5
20
Europe Union vehicle sales
(millions of units)
1990 2000 2005 2010
5 years
('94-'99)
5 years+?
('14-'18)
2 years
('06-'07)
Nine years is the US’s longest stretch of growth since 1950 without a >2% drop
or multiyear stagnation
Five years is the EU’s longest stretch of growth since
1999 without a >2% drop or multiyear stagnation
Source: BCG analysis, IHS Markit, US Bureau of Economic Analysis
United States vehicle sales
(millions of units)
0
15
5
10
20
1955 2010197019601950 1965 1975 1980 1985 1990 1995 2000 2005 1995 2018
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Economic momentum is weakening
2017
3%
18
2%
19161%
-1.0 pp.
GDP growth forecasts (%)
1. Based on analyst forecasts compiled by Bloomberg (89 forecasts for US, 46 for Eurozone, 65 for China, 33 for world), 2. Duke Fuqua CFO Survey, Dec 2008Source: BCG Henderson Institute, Bloomberg, IMF
Median forecast1 25-75% range
3%
19161%
17 2018
2%-0.4 pp.
6%
16 1917 2018
7%
5%
-0.6 pp.
162%
17 2018 19
3%
4% -0.4 pp.
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Slowdown has started
1. Light vehicles = passenger cars + light trucks < 6t GVWNote: Regions defined according to IHS definitionSource: BCG analysis, IHS Markit (November 2019)
0
100
50
6.05.0
5.3
Global light vehicle1 sales by region 2010–2031 Units (M)
6.4
23.6
6.8
5.1
14.0
6.8
7.4
18.5
17.3
7.1
17.1
2010 2012
5.1
5.7
2014
6.4 18.4
5.6
15.36.8
19.3
18.0
5.9
2011
4.9
20.4
2017
18.2
19.0
4.8
2013
7.8
18.0
21.8
7.8
7.68.0
21.1
19.8
28.0
2016
6.9
20.7
92.24.8
18.9
4.4
24.9
8.520.8
20.6
28.4
2015
6.7
4.4
4.3
6.6
4.78.9
20.7
20.6
27.5
2018
7.04.8
5.04.53.9
8.320.3
6.9
25.5
2019
18.3
19.5
3.7
5.4
72.7 75.8 79.7 83.5 86.6 88.394.3 93.7 89.6
+3.8%-4.3%
Japan/Korea South AsiaMiddle East/Africa South America North America Europe Greater ChinaCAGR (compound
annual growth rate)
150
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Car sales will decline by 9%–15% in the US and 5%–10% in the EU by 2021
2014 2016 2018 2020 2022
10
15
20
US total new car sales 2003–2023
(millions of units)
Major downturnHistoric Average downturn
2014 2016 20202018 2022
10
15
20
EU total new car sales 2003–2023
(millions of units)
Less severe 5-10%
drop in car sales
in 2021 trough
9-15% drop in car
sales in 2021 trough
following slowdown
in 2019/2020
Decrease initially fueled by
weakening auto demand. Drop will
accelerate due to macro-downturn
Source: BCG analysis, IMF, US Bureau of Economic Analysis, Federal Reserve, CBO, US Census Bureau, EIA
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Shift to electrification
Note: In the EU, objective set at 147g/km for light commercial vehicles in 2021 (125g/km in 2025 and 101.5g/km in 2030)Source: BCG, ICCT
100
180
2021
158
130
161
2015 2018
117
95
119
81
97
2025
59
2030
ChinaEU US
China
3-4% in 2020
California
3-4% in 2020
8-9% in 2025
CO₂/km targets (cars, NEDC) NEV sales targets (cars)
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Battery pack costs are declining as fast as our most aggressive 2017 projection
90
2021202002018 2019 2022 2023 2024 2025
180
2026 2027 2028 2029 2030
120
150
210
62
120
Battery pack cost ($/kWh)
126
111
147
89
10095
1. Based on BCG 2019 forecast for BEV/Pouch cells; different cell and pack designs or chemistries will drive different costs2. Conversion from cell to pack cost using a pack factor of 1.4. Source: BCG analysis and forecast, expert interviews with battery manufacturers and auto OEMs, Bloomberg New Energy Finance
BCG base case (2019)1
BCG base case (’The Electric Car Tipping Point’, 2017)
BCG low case (’The Electric Car Tipping Point’, 2017)
Bloomberg NEF (2019)
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BCG new electric cars forecast to 2030 for Europe
0
20
10
15
5%
3%
18%
4%
1%
50%
7%
37%
5%
47%
2024
Volume (M)
1%
8%
19%
5%
5%
11%
55%
2023
7%
5%
6%
16%
52%
6%
6%
14%
14%
2025
39%
12%
6%
15%
13%
2026
15%
7%
7%
17%
11%
43%
2027
18%
7%
7%
10%
21%
8%
9%
37%
2029
25%
56%
7%
18%
8%
34%
2030
22%
5%
4%
13%
2021
56%
26%
6%
5%
4%
9%
2020 20282022
54%
32%
5%4%
3%
2%
2019
55%
35%
7%
3%
4%
2%
2018
55%
2%
18%
1%
8%
BEV PHEV HEV DieselMHEV Gasoline
Note: BEV = Battery electric; PHEV = plug-in hybrid electric; HEV = full hybrid electric; MHEV = mild hybrid electric Source: BCG analysis and forecast
Actuals
Regulation-driven TCO & preference driven
Impact of broader mobility trends
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Financial and non-financial incentives remain critical
CaliforniaAccess to
dedicated lanes (bus lanes)
LondonFree road tolls
1.4⁸% 0.5%3.3%⁷0.7%BEV shares in
2018 sales of
passenger cars31% 5.4% 1.0%1.4%
€6 500⁵
Max €6 500⁴ &
no purchase
tax⁶
Max €6 500⁴€4 000National financial
incentives
No VAT¹ &
purchase tax
No purchase
tax²€4 000³€6 000
2009 200920142011Financial incentives
introduction date2001 2010 20162008
Free public car
parksStuttgartParis
Note: 1. 25% 2. 10-30% 3. Vehicles <60k€ 4. Depending on range 5. Tax credits 6. 3% 7. 10-15% in Beijing & Shanghai 8. Passenger cars + trucks, ~10% in 30 Californian citiesSource: BCG
Registration quota
exemptions (Beijing & Shanghai)
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Significant growth in Driver's Assistance, then Autonomy
40
821
9
33
17
3928
2127 22
3145
7
3
3
2
11 20
1820
104
13
1
2
2
812
7
11
12
13 8
60
0
20
100
40
80
100
49
Penetration (%)
55
Total
collision
mitigation
57
42
360 view Active
pedestrian
detection
2
Cross
traffic
alert
19
92
53
1
Collision
warning
Rear
object
camera
Blindspot
alert
24
Lane
departure
warning
46
Rear
object
sonic
Front
object
camera
Self
parking
Lane
keep
assist
Front
object
sonic
14 14
5159
45
Adaptive
cruise
control
Low speed system L1
2017Increase in 2019 1H Increase in 2018
US
Note: Functionality is independently assessed (e.g. one vehicle counts for both blind spot alert and lane keep assist)Source: BCG analysis, Factory-Installed Electronic/ADAS Equipment, Wards Auto, 2017-2019MY
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Shared mobility: in New York ride hailing took share from taxis but also grew the overall market by 100%…
Jan-10 Jan-14Jan-12 Jan-16 Jan-18 Jan-20
0.0
0.2
0.4
0.6
0.8
1.0
0.5
Trips per Day (M)
New York City
0.3
0.7
1.0
TotalRide HailingYellow Cab Green Cab
Note: Ride Share 2011 – 2015 estimatedSource: BCG analysis, New York City Taxi & Limousine Commission
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… and expected to further grow the market, if not capped through regulations
2019
1.0M
2010
0.7M
0.3M
1.5M
1.5M
Steady state?
0.5M
Trips per day (M) Total share of Miles (%)
87 %
6 %
89 %
Steady state
0 %
11 %
2010
6 %
2019
64%-82%
18-36%
100 %
Note: Assuming that current regulations capping the ride hailing numbers are cappedSource: BCG analysis, Uber, Goldman Sachs Research, NYC.gov, New York City Taxi & Limousine Commission
New York city Downtown Manhattan
1.4% 3% 4.5-6%% Share of
total miles
Taxi (yellow cab + green cab)
Ride sharing
Other
Other/Private Ride Hailing Taxi
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To support the future mobility, industry will need new talents
Source: Expert interviews and job posting analysis
"Mobility centric training"
will be required to develop future talent
Today
Single focus engineer
Tomorrow
Cross-functional tinkerer
We need people that are mobility specialists
that can be pillars of deep competency
within the company
- Senior executive, U.S. OEM
Aerospace engineering was created 100 years
ago because it required a systems based
approach and a similar program is required
for new mobility
- Professor, Top US Tech university
Mechanic
al
Ele
ctr
ical
Indust
rial
Software Math and physics
AI/ML/Robotics System level thinking
Skills non-exhaustive
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… significantly more than the supply
Growth needed in
computer-focused
graduates entering the
mobility industry across
both the U.S. and
Michigan3, to keep up
with growing demand
4-6x
Note: %'s for context based on BLS data showing ~10k computer-focused FTEs and ~50k engineering FTEs in auto today.Range based on estimate that between 60-100% of university-level jobs remain physically located in the U.S.Assumed % entering mobility industry = % entering to auto industry today.Assumed ~30% of national demand for computer-focused graduates are needed in Michigan (MI has ~30% of university-level auto jobs today).
~20-30k
~5k
10yr supply of
computer-focused
grads entering
mobility industry2
~20-30k
10yr demand for
computer-focused
graduates in
mobility industry
~4-6x
Computer-focused graduates(For context: 200-300% of computer-focused jobs in auto today)
Significant skilled trades and other engineering jobs
to be created for new mobility
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What does it mean for the industry?
Prepare for slowdown
Long term stable growth
All electric
Software and new talents
Global Scale
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We are readyto shape the future…
with you!
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