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September 2018 Faster, cheaper, cleaner, safer? Autonomous vehicles, shared transportation, and the future of mobility

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  • September 2018

    Faster, cheaper, cleaner, safer?Autonomous vehicles, shared transportation, and the future of mobility

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 2

    Converging forces are transforming longstanding industry structures and dynamics

    Maturing powertrain technologies

    Lightweight materials

    Rapid advances in connected vehicles

    Emergence of autonomous vehicles

    Shifts in mobility preferences

    Source: Deloitte analysis1 Bloomberg New Energy Finance 2 Deloitte Global Automotive Consumer Study, 2017

    Electric vehicle battery costs have fallen ~80% in 7 years.1 China, India, the UK, France, and others plan to limit sale of new ICE vehicles in the next 10-20 years

    Stronger and lighter materials are reducing vehicle weight without sacrificing passenger safety

    New vehicles are being outfitted with vehicle-to-infrastructure (V2I), vehicle-to-vehicle (V2V), and communications technologies, so every car can know precisely where every other car is on the road

    Autonomous drive technology is no longer a case of science fiction; the question is when and how will it become more mainstream and widely adopted

    Younger generations are leading the way toward pay-per-use mobility in place of owning a car. Half of US-based ride-hailing users say it has caused them to question their need to own a car in the future2

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 3

    Stakes are high – with approximately $2 trillion in revenues collected annually by the current extended auto industry

    Auto insurance

    Auto financing

    Radio advertising; outdoor advertising

    Oil companies and gas stations

    Fuel, licensing, and auto sales taxes; traffic enforcement; tolls; public transportation; parking

    Rental vehicles; taxi and limo services; private parking garages

    Emergency services and hospital costs; legal fees associated with accidents

    Wholesale and dealer vehicle sales and service; suppliers; and mechanics

    Aftermarket parts and service channel

    Energy

    $573B

    Current extended automotive

    industry revenues

    ~$2T1

    Finance

    $101BTransportation

    $59B

    Automotive

    $735B

    Media

    $16B

    Insurance

    $205B

    Medical& Legal$35B

    Publicsector

    $251B

    Retail

    $24B

    1Total revenue is $1.99T. Source: Deloitte analysis based on IBISWorld Industry Reports, IHS, DOT, US Census, EIA, Auto News, TechCrunch. Current revenue represents 2014 figures (or earlier if 2014 data not available) in the United States.

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 4

    The result could be a new mobility ecosystem that provides substantial benefits

    Consumer data provides the highest sources of value in the system

    Taxation and public revenues shift from a fixed model to a more dynamic one

    New predominantly “driverless” cargo transportation and delivery systems emerge

    Vehicles are consumed through end-to-end mobility providers and less likely to be personally owned assets

    Seamless multi-modal transportation becomes the new norm

    Vehicles operate autonomously and nearly never crash

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 5

    Converging forces will give rise to the emergence of four future states of mobility, which will exist in parallel

    Extent to which autonomous vehicle technologies become pervasive: • Depends upon several

    key factors as catalysts or deterrents—e.g., technology, regulation, social acceptance

    • Vehicle technologies will increasingly become "smart”; the human-machine interface shifts toward greater machine control

    Extent to which vehicles are personally owned or shared:

    • Depends upon personal preferences and economics

    • Higher degree of shared ownership increases system-wide asset efficiency

    Personal Shared

    Aut

    onom

    ous

    Drive

    r

    Future states of mobility

    Vehicle ownership

    Veh

    icle

    co

    ntr

    ol

    Shared Autonomous

    SharedDriver-Driven

    Personally Owned Autonomous

    Personally Owned Driver-Driven1 2

    3 4

    Asset efficiencyLow HighAss

    iste

    d

    Fully autonomous drive means that the vehicle has full responsibility for controlling its operation. It is fundamentally different from the most advanced form of driver assist.

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 6

    Our forecasts estimate an increase in total miles traveled, a decline in overall vehicle sales, and faster shifts in urban centers towards AVs and shared vehicles

    0

    500,000

    1,000,000

    1,500,000

    2,000,000

    2,500,000

    3,000,000

    3,500,000

    4,000,000

    4,500,000

    5,000,000

    2015 2020 2025 2030 2035 2040

    People Miles Driven by Future State

    Personally owned driver-driven Shared driver-driven Personally owned autonomous Shared autonomous

    2040: Passenger miles driven increases by 25% Urban

    Rural

    Perc

    ent

    of a

    nnua

    l mile

    s dr

    iven

    , in

    mill

    ions

    Ann

    ual M

    iles

    Dri

    ven

    in M

    illio

    ns

    Adoption by Geography

    0%

    20%

    40%

    60%

    80%

    100%

    2020 2025 2030 2035 2040

    0%

    20%

    40%

    60%

    80%

    100%

    2020 2025 2030 2035 2040

    Source: Scott Corwin, Nick Jameson, Craig Giffi, and Joe Vitale, Gearing for change: Preparing for transformation in the automotive ecosystem, Deloitte University Press, September 29, 2016.

    Perc

    ent

    of a

    nnua

    l mile

    s dr

    iven

    , in

    mill

    ions

    Introduction of shared (2020) and personally-owned (2022)

    autonomous vehicles

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 7

    Easter Sunday, Fifth Ave., New York City, 1900

    Tony Seba, tonyseba.com, 2014

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 8

    Easter Sunday, Fifth Ave., New York City, 1913

    Tony Seba, tonyseba.com, 2014

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 9

    There are a number of forces that will influence the rate at which the new mobility ecosystem takes shape

    Forces of Delay or Acceleration

    Public AttitudesHuman-machine interface, safety, shared economy

    Technology DevelopmentEarly experiments, pilot programs

    Regulation & GovernmentFederal, state and local policies

    Privacy and SecurityCyber-security, communication protocols

    Wall Street ValuationsTechnology investments, cost of capital projections

    Employment ChangesDislocation effects, reactions, job retraining

    Source: Corwin, Vitale, Kelly, Cathles, The future of mobility.

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 10

    Let us explore how people will likely experience a seamless intermodal journey in the future

    …he is a millennial living just outside the city

    …he is ready go home after a long day at work

    …he wants to pick up groceries

    Meet Ben…

    Let’s explore his journey home and the supporting ecosystem

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 11

    The future of mobility: Ben’s journey

    https://dupress.deloitte.com/dup-us-en/multimedia/videos/roadmap-for-future-of-urban-mobility.html

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 12

    Three key themes: Performance & Resilience, Vision & Leadership, and Service & Inclusion

    The Deloitte City Mobility Index – A global initiative covering 54 cities in 2018

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 13

    Across our 54 cities, several key points stood out in the initial findings

    1. What’s past is prologueHistory plays a role—but is not destiny

    • Current transport systems are a result of decisions made over years

    • Authorities must tackle and transform existing systems

    • Cities can overcome past legacies with innovative approaches

    http://www.deloitte.com/insights/city-mobility-index

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    Across our 54 cities, several key points stood out in the initial findings (cont.)

    2. Integration is keyInclude a wide range of players• Good coordination should exist

    between different players:

    −central/local,

    −public/private,

    −suburb/city,

    −regulator/operator

    • This makes it easier to join up

    −Timetables

    −Transport modes

    −coverage

    −payment systems

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 15

    Across our 54 cities, several key points stood out in the initial findings (cont.)

    3. Cars do have a roleBut they must be managed• Can be utilized as part of wider,

    integrated system

    • Can play an important role in first-mile/last-mile journeys

    • They must be “right-sized” for the local conditions:

    − infrastructure,

    −commuter culture,

    −who they share the road with

    http://www.deloitte.com/insights/city-mobility-index

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 16

    Chicago has an extensive and affordable public transport system that is well-integrated, secure, and easy to use. Still, the majority of Chicagoans choose to drive. It has strong leadership that promotes public transport as the preferred mode and ambitious targets for digital and technological options.

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 17

    To date, congestion and pollution have been managed, but with a growing population this will not always be the case. Columbus already scores poorly on quality-of-life indicators, and these problems are likely to be exacerbated in the future absent investment in more accessible and active modes of transport. The award of the Smart City Challenge fund has the potential to transform Columbus’s transport system.

  • Copyright © 2018 Deloitte Development LLC. All rights reserved. 18

    A new mobility ecosystem will emerge delivering seamless intermodal transportation faster, cheaper, and safer than today

    Mobility Advisor

    Opportunity Space

    Mobility ManagerInfrastructure Enabler

    Experience EnablerDevelopment and Mfg.

    In-Transit Vehicle Experience Fleet Operations

    Physical Infrastructure Energy Infrastructure Vehicles

    Facilitating EcosystemsPricing, Payments and Insurance

    Digital Infrastructure

    Start Finish

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    Copyright © 2016 Deloitte Development LLC. All rights reserved.

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    Faster, cheaper, cleaner, safer?�Autonomous vehicles, shared transportation, and the future of mobilityConverging forces are transforming longstanding industry structures and dynamicsStakes are high – with approximately $2 trillion in revenues collected annually by the current extended auto industry�The result could be a new mobility ecosystem that provides substantial benefits �Converging forces will give rise to the emergence of four future states of mobility, which will exist in parallelOur forecasts estimate an increase in total miles traveled, a decline in overall vehicle sales, and faster shifts in urban centers towards AVs and shared vehiclesEaster Sunday, Fifth Ave., New York City, 1900Easter Sunday, Fifth Ave., New York City, 1913There are a number of forces that will influence the rate at which the new mobility ecosystem takes shapeLet us explore how people will likely experience a seamless intermodal journey in the futureSlide Number 11The Deloitte City Mobility Index – A global initiative covering 54 cities in 2018 Across our 54 cities, several key points stood out in the initial findingsAcross our 54 cities, several key points stood out in the initial findings (cont.)Across our 54 cities, several key points stood out in the initial findings (cont.)Slide Number 16Slide Number 17A new mobility ecosystem will emerge delivering seamless intermodal transportation faster, cheaper, and safer than todaySlide Number 19