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Fuel for Thought: The New Map – Charting the Future

Automotive Monthly Newsletter and Podcast
This month's theme: The New Map - Charting the Future

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Now in its 39th year, IHS Markit's CERAWeek is widely considered to be the most prestigious annual gathering of CEOs and ministers from global energy and utilities, as well as automotive, manufacturing, policy, and financial communities, along with a growing presence of technology. This year's central theme was focused around how dramatic shifts in energy and geopolitics shape a new global map. This map is defined less by physical and political boundaries than by alterations, integrations, and possible collisions in global business and government.

Mobility Transition

From several mobility related panel discussions, we learned that the 2021 mobility market (car sharing and ride hailing) sentiment is much more positive as demand is starting to gradually return to pre-pandemic levels. Although public transit is expected to continue lagging behind - particularly in terms of passenger kilometres - the personally owned car is still perceived as one of the safest mobility options for the time being. Lyft also suggested that robotaxi/autonomous vehicle technology will clearly represent a future growth driver but admitted that this is still a few years away. In the interim, Lyft remains excited about the growth opportunity for micromobility, which has grown further since the pandemic (especially for e-bikes). The world has also seen renewed climate targets/net-zero emissions ambition (such as GM's 100% ZEV self-mandate) for which the mobility service providers are among the first to potentially realise the opportunity. According to some of the leading mobility service providers, 'shared vehicles' can help with cost management as well as energy management as a shared EV vehicle could achieve energy savings of up to 50% per mile. Especially as mobility could be defined in its essence as 'moving people from one place to another using energy', hence the sharing aspect could also unlock lower numbers of vehicles on the roads. This would be a welcome step towards the mobility transition as the affordability of owning a car is increasingly being challenged.

Another element on the map towards the mobility transition was expected to be a move to 'human centred' cities. Effectively the pandemic has kickstarted this trend with many cities around the world starting to close off streets to traffic and reserve it for bikes/walking instead; while the rise of the so-called 'parklets' (parking spaces transformed into a community space) might lead to lost parking revenue for cities, they do open up other economic opportunities. Lyft argued that cities belong to people first and cars second, and that this transition has now started in earnest, and hopes to soon see the creation of 'mobility lanes' so future cities will truly be reinvented and shared mobility could become a focal point.

We also heard from several stakeholders in the vehicle powertrain sector that the overall future propulsion system value proposition effectively depends on the vehicle application, and that consequently there will be room for fuel-cell electric vehicle (FCEV) and battery-electric vehicle (BEV) systems in the light vehicle market and beyond. Leading charging infrastructure providers also debated that the overall energy equation (energy source, location, availability) is ultimately the key to providing charging solutions for local markets.

Regulatory/Finance Transition

We learned from Bill Gates that the 'net-zero emissions' goal is increasingly gaining political support, but that much more work still needs to be done. Gates also claimed that when looking back in history, things have never changed so fast as we need them now to change, meaning this will be an extremely tough transition to achieve by 2050 (and effectively impossible by 2030). From a technology perspective, dozens of breakthroughs are needed, while at the same time innovation needs to be available for the entire world - otherwise the emerging markets will not be able to achieve this by 2050. According to Gates, in the next 30 years we need the electric grid to triple in size while staying reliable and affordable - a difficult task compared to all the electrification we have achieved so far. Hence, Gates sees a key role for governments here, and they need to start planning ahead.

Energy Secretary Jennifer Granholm displayed much enthusiasm when she claimed that the net-zero economy by 2050 can also be seen as a great economic opportunity, which she believes to be worth up to USD23 trillion. She went on to pledge full support for the US electric vehicle and battery sector, mentioning government focus/support for improving battery energy density, building local critical mineral supply chains, and establishing a battery recycling sector.

Mark Carney, the former governor of the Bank of Canada/England and the current UN Special Envoy for Climate Action and Finance, stressed that there is a need for credible national climate policies to help provide predictability and commitment from industry sectors to invest in the future.

Industry & Supply Chain Transition

Large industrial stakeholders such as ThyssenKrupp Steel reminded us that decarbonising industries is a wider system problem and needs to be treated as such. Hence one cannot look at it in isolation from a particular stakeholder but as a systems approach, so one needs to look at the wider picture as decarbonisation affects the entire value chain. This view is supported by Amazon Web Services (AWS), which agreed that the transition will not be easy and that there has to be cooperation with others (companies/countries/sectors) if you want a chance to succeed. A view echoed by energy giant BP's CEO who alluded to the fact that BP is effectively morphing into a 'mobility integrated' company now that it realises that it is part of a wider ecosystem that needs to change. DOW Automotive shared that, from its perspective, advanced materials should be embraced as enablers for the transition and cooperation with OEMs could unlock new material properties that could help vehicle components to perform for the lifetime of a vehicle, providing increased levels of sustainability. In other words, the automotive tier supplier community also needs to transform and could reposition itself as a key partner/enabler for the OEM and the wider mobility ecosystem.

Further calls for partnerships were heard but one of them stood out as the technology sector's CAVNUE pleaded for more cooperation across sectors via so-called public-private partnerships (PPP); and made a strong case for an optimised single technology platform of "digitised roadways" providing autonomous vehicle-enabled future-proof roads in the name of safe autonomous vehicles on every road, which could presumably help vehicles to unlock improved energy efficiency as well.

Dive Deeper - Check out our CERAWeek videos...

CERAWeek Video - The Future of the Digital World

CERAWeek Video - The New Map: Energy, Climate, and the Clash of Nations

CERAWeek Video - Opportunities and Challenges for Electrifying Light-Duty Vehicles in a post-Pandemic World

CERAWeek Video - EV Charging Infrastructure: Navigating COVID-19 & planning for post-crisis demand

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Posted 15 March 2021 by Kristen Balasia, Vice President, Automotive Advisory, S&P Global Mobility and

Tim Armstrong, Senior Vice President, Planning Solutions, S&P Global Mobility and

Tom De Vleesschauwer, Global Transport & Mobility Practice Leader, S&P Global Mobility


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