#Mobility2030[ ]Mobility 2030
Mobility Ecosystem 2030
Presentation to the Drive Midlands Conference
16 May 2017
2© 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.
#Mobility2030[ ]Mobility 2030
Your presenter• John Leech, UK Automotive Sector Leader at KPMG
• 26 years automotive experience with OEMs, dealers and suppliers in UK, US and Germany on audit, M&A, strategy and turnaround
• Authored studies for SMMT:
• Supply chain inward investment
• Brexit
• Connected and autonomous cars
• Digitalisation
• Secondment to DTI to project manage the Automotive Innovation and Growth Team
• Advisory Board Member of Drive Midlands
• Presented to Number 10 Policy Unit, BEIS, DIT on government policy for the automotive sector
Tel: +44 121 232 3035
Email: [email protected]
Mobility 2030
3© 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.
#Mobility2030[ ]Mobility 2030
KPMG convened key companies from acrossthe ecosystem to help architect UKmobility2030
3
[ ]Mobility 2030 #Mobility2030
Ford
Visteon
Inchcape
AA
Europcar
Microsoft
BP
Vodafone
Arup
Costain
WS Atkins
Ricardo
National Express
Motability
Centrica
National Grid
Tom Tom
HSBC
AXA
DfT
Addison Lee
Skanska
Arriva
OLEV
Mobility 2030
4© 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.
#Mobility2030[ ]Mobility 2030
Electric Vehicles
Three main disruptive forces will fundamentally transform how people and things move
Mobility as a Service
Autonomous Vehicles
Changing consumer and
societal demands
Mobility Value Chain
Collaboration in the future Mobility
Ecosystem
Mobility 2030
5© 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.
#Mobility2030[ ]Mobility 2030
A pervasive global mega-trend with many implications
Industry execs
believe that….
…of consumers will
not want to own a
car, as new mobility
services begin to
meet consumer
needs
Passenger miles
travelled will
increase….
Cost per mile could
go down…
…following the
growth of the
mega-city and their
suburbs
…due to removing the
driver cost, longer
vehicle lives, new
energy sources,
technologies and
mobility scaling
£
Miles per
vehicle could
increase….
…as fleet services
use vehicles more
efficiently
The number of
major ecosystem
players
will decline…
…as sector convergence
leads to consolidation5x
Up to
50%
Up to
40%
?
Sources: Department for Transport, KPMG Global Auto Executive Survey 2017,KPMG UK Mobility 2030 analysis
Mobility 2030
Up to
10%
6© 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.
#Mobility2030[ ]Mobility 2030
Trends and Insights | Electric VehiclesElectric vehicle technology will be fully embedded, with battery Battery cost forecasts support mass market adoption in 3-4 yearsd charging infrastructure suitable for all length journeys
Sources: IEA Global EV Outlook, 2016, Motor Trader, Energy Saving Trust, National Transport Survey, GreenThenSolar.com, KPMG UK Mobility 2030 Analysis
99.3%of UK car journeys
today are within the range of existing battery technology (100 miles)
Battery density and cost efficiency is increasing rapidly
-
200
400
600
800
1,000
1,200
-
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012 2013 2014 2015 2020 2022
Battery co
st (USD
/KW
h)
Bat
tery
en
ergy
den
sity
(W
h/l
)
US DOE energy density (PHEV) Energy density target (PHEV) US DOE battery cost (PHEV)
Tesla battery cost target (BEV) GM battery cost target (BEV)
Mobility 2030
7© 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.
#Mobility2030[ ]Mobility 2030
Safety
Connectivity
Autonomy
Trends and Insights | Autonomous Vehicles
Level 4 autonomy in early 2020s; Level 5 potentially in 2030sll be available and embedded within a wider supporting ecosystem
Autonomy
Level
Timeline 2010 2015 2020 2025 2030
Blind Spot
Monitoring
Geo-fenced
autonomous driving
Lane Departure Warning
Adaptive Cruise Control (ACC)
Park Assist (steering only)
Intelligent Speed Adaption
Collision Avoidance
Lane Keep Assist (LKA)
Vehicle to Vehicle Communication
Intersection Pilot
Emergency Driver Assistant
3D Cloud Based Navigation
Valet Park Assist
Highway Autopilot
Traffic Jam Assist
L0
No Autonomy
L1
Driver
Assistance
L2
Partial
Autonomy
L4
High Autonomy
Full end-
to-end
experience
L5
Full Autonomy
L3
Conditional
Autonomy
Source: KPMG UK Mobility 2030 Scenario Analysis – Stretch case
Ford, BMW, Nissan
targeting L4 AV car
for 2021
Mobility 2030
8© 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.
#Mobility2030[ ]Mobility 2030
248126
835
445
602
1067
0
200
400
600
800
1000
1200
2011 2012 2013 2014 2015 2016f
£m
AV Tech Global Deals, Value and Volume, 2011-2016
Investment (£m)
248126
835
445
602
1067
1815
3734
56
68
0
10
20
30
40
50
60
70
80
0
200
400
600
800
1000
1200
2011 2012 2013 2014 2015 2016f
# D
eal
s
£m
AV Tech Global Deals, Value and Volume, 2011-2016
Investment (£m) Deals
Trends and Insights | Autonomous Vehicles
Autonomous Vehicle technology M&A is now growinghe pace of development
Source: CB Insights 2016
Mobility 2030
9© 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.
#Mobility2030[ ]Mobility 2030
The UK will be an early adopter of these new mobility solutionsMobility 2030
The UK has a high
proportion of the population
in high density areas…
Personal distance travelled in
personal vehicles in the UK
is low relative to other major
economies…
Demographic, regulatory and cultural factors means the UK will lead the adoption of EV, AV and MaaS…
Congestion pricing and air
quality regulations will
subsidise early adoption…
Sources: UK Census data (2011), Experian, UK Data Service, Reuters
…whilst cost per mile
of personal vehicles is
high
The Government plans to
remove insurance barriers for
AVs and is offering significant
funding for testing… £
10© 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.
#Mobility2030[ ]Mobility 2030
An autonomous, electric, mobility service will be cheaper than private ownership (on a cost per mile basis)
Sources: Department for Transport, Transport for London, KPMG UK Mobility 2030 Scenario Analysis – Stretch case
Private AV
National & Metropolitan Rail
Ride-hailing services
Electrified AV Mobility Services 2030
Taxi
c.£5.00
Cost per mile – UK modes
Size indicates relative number of miles travelled per capita per year
£0.20-£0.40
MaaS provision could be up to 40% cheaper than private ownership
Local/National bus
Mobility 2030
11© 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.
#Mobility2030[ ]Mobility 2030
400
300
200
100
0
1,000
900
800
700
600
500
926
6%
17%
16%
4%7%
15%
32%
2030
8993%7%
7%
5%
8%
17%
50%
2025
3%6%
12%
14%
2035 2040
954
8%
27%
26%
875
2%
5%
8%
17%
60%
2020
850
6%
9%
17%
64%
2015
825
5%
9%
17%
64%
AV Personal
AV Mobility
Bus
Rail
Commercial PV
Personal Vehicle Dynamic Shuttle
Baseline
Passenger distance travelled by year (billion km)
We forecast autonomous, mobility services will account for over a quarter of miles travelled by 2040
Mobility 2030
12© 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.
#Mobility2030[ ]Mobility 2030
UK New Car Sales
20%
By 2030, mobility services will have a significant impact on new car sales
Notes: Light vehicle sales include cars and light commercial vehicles
Source: KPMG UK Mobility 2030 Scenario Analysis – Stretch case
2020 2025 2030
UK Light Vehicles Sold
Sale
s vo
lum
e
Mass penetration of AV mobility services
Mobility 2030
13© 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.
#Mobility2030[ ]Mobility 2030
£20,000
£35,000
Upstream
Downstream
Show me the money | Value chain today
The value derived from today’s personal car is driven by upstream & downstream elements with the customer self-aggregating services
Source: KPMG UK Mobility 2030 analysis
Revenues from a personally owned vehicle over a 10 year period where the consumer is the service aggregatorCurrent scenario
Customer
Downstream
Workshop
End of life
RemarketFinance
Fuel retailer
Government
Insurance
Spares
Labour
Upstream
Raw material supplier
OEM
Tier II Tier I
Dealer
£
Car
14© 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.
#Mobility2030[ ]Mobility 2030
Downstream
Experience
aggregator
Data
aggregator
Mobility Services Provider
Show me the money | Value chain in 2030
The value derived in 2030 will be weighted towards the downstream with aggregators providing seamless services to customers
Source: KPMG UK Mobility 2030 analysis
Revenues from a EV, AV, MaaS vehicle over a 10 year period, where mobility service providers and integrators
aggregate services for consumers
£25,000
2030 scenario
£275,000
Upstream
Downstream
Retail
Other modes
up to £475,000Integrated values, driving
the customer to the centre
Upstream
Raw material supplier
OEM
Tier II
Tier IBattery Electric
Autonomous
Vehicle
Vehicle Management
as a Service
Finance InsuranceService &
RepairEnergy Infrastructure
Other cars
Media
Other services
Customer
End of Life
15© 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.
#Mobility2030[ ]Mobility 2030
Show me the money | Downstream
Downstream growth will be driven by incremental revenue streams enabled by a digital platform
2030
Vehicle Fleet Management
9%
New / Incremental
Revenues
41%
TodayGovernment
45%
Energy
12%
Insurance
14%
Finance
6%
Resale
3%Parking &
Cleaning
13%Parts
7%
Workshop
7%
Source: KPMG UK Mobility 2030 analysis
Workshops
6%
Parking &
Cleaning
5%
Government
15%
Finance
<1%
Insurance
11%
Energy
8%
Parts
8%
£30,000 £225,000 to £475,000
16© 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.
#Mobility2030[ ]Mobility 2030
Show me the money | Downstream
The new ecosystem provides both potential opportunities and challenges for incumbent participants
Growth in financing of fleets, reconfigured consumer finance to support pay per mile services
New tax revenue streams to replace fuel duty – but will continue to support air quality and climate change to accelerate change in car parc
B2C insurance products will phase out but new B2B product opportunities to OEMs and fleet providers will emerge
Demand for traditional fuels will reduce and home/work charging points will grow
Electric cars have far fewer mechanical parts but additional wear and tear
Workshops will see increased throughput but less revenue from accident repair
Traditional showrooms and petrol forecourts will be repurposed
Energy
Government
Insurance
Finance
Workshops
Parts
InfrastructureSource: KPMG UK Mobility 2030 analysis
17© 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.
#Mobility2030[ ]Mobility 2030
Show me the money | Downstream
There are a number of critical success factors which need to be addressed
Customer experience and ownership
Skill at integrating/interconnecting with other ecosystem elements
Consider all three elements of the ecosystem: physical, data and finance
Advanced data analytics capabilities
Secure network and data infrastructure
Source: KPMG UK Mobility 2030 analysis
18© 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.
#Mobility2030[ ]Mobility 2030
Sales
▪ UK new car sales to fall upto 20% by 2030. This together with direct online sales by manufacturers
means fewer vehicle showrooms
▪ B2B or Fleet becomes a key customer for the auto industry
▪ Diesel, then petrol and in future non-AV vehicles may see residual value weakening and be subject to
scrappage schemes
Business
Model
▪ Different sales models for Personal Autonomous (B2C) and Autonomous Mobility (B2B)
▪ Rural, commuter and urban areas will become more differentiated and require different business
models
OEMs
▪ Cost structure of facilities adjusted to lower breakeven volume
▪ Connected car offers direct relationship with driver and new service-oriented business models
▪ Refocus from shifting metal to maximising the value of miles travelled
Shifting
Profit
Pools
▪ New Autonomous Mobility Services market entrants (Amazon? Uber? Google?)
▪ Decline in aftermarket collision parts and repairs business; offset by growth in refurbishment parts for
longer mileage vehicles
Mobility 2030
Disruption for auto industry Potential implications in the next 10-15 years
£
© 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.
#Mobility2030[ ]Mobility 2030
© 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.
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