Purpose-built electric vehicles for mobility on demand, says Roland Berger

Roland Berger, founded in 1967, is the only leading global consultancy of German heritage and European origin. With 2,400 employees working from 34 countries, the consultancy has successful operations in all major international markets.

The report said that until 2020 the number of these purpose built e-vehicles could go up to about 1 million units, and then rise by 21% until 2025 and 14% until 2030. China is expected to be by far the largest market for the new vehicle class, with a market share of 60%, followed by North America (22%), Europe (13%) and MENA (5%).

Says Jan-Philipp Hasenberg, Partner at Roland Berger, "This new type of car unites two of the key mobility megatrends in one vehicle: ride-sharing and electromobility. "Vehicle manufacturers should take active steps to get into this niche market now so that they can establish a strong competitive position and get their customers excited about the new models. One of the main drivers here will be China, which makes up at least 60 percent of the market, but Europe and the United States will also see their market for these vehicles grow as time goes on. Indeed, this is a key growth market that no OEM can afford to ignore.

Wolfgang Bernhart, Partner at Roland Berger says that "We anticipate the price per kilometer for using these cars to come in at between 0.5 and 0.8 euros. These purpose-built vehicles will therefore be among the cheapest means of getting around in a car. The only thing that will be cheaper to use, at less than 0.3 euros per kilometer, will be genuine robocabs without a driver."

By now it has become a common view that the automotive market will gradually shift from vehicle ownership to new shared mobility concepts within the coming decade. Mobility on Demand and Mobility as a Service (MaaS) are the latest buzzwords. While this undoubtedly creates headaches for executives in the automotive industry given that fewer vehicles will be sold to end customers, it also opens up a new opportunity – a new breed of purpose-built vehicles for shared mobility concepts, the study says. Ultimately those vehicles will be fully autonomous vehicles or "robocabs".

While several players like Waymo or GM have announced plans to launch those vehicles as early as 2019, a more widespread adoption will most likely not occur before 2025. But vehicle manufacturers have the chance to start producing a new breed of car now: purpose-built electric vehicles for on-demand mobility solutions. Manufacturers could gain a foothold in this new segment and in so doing gain valuable experience that they can later profit from in the production of fully autonomous vehicles, the study points out.

CHALLENGES AND OPPORTUNITIES

Optimising vehicle concepts for shared mobility requires a radical shift of focus, from driver experience to passenger ride experience. It means designing flexible interior concepts to support different use cases, concentrating on durability and serviceability and including a significant amount of additional vehicle content, the study reveals. Passengers value "quality time" during rides and will soon expect to be able to request a vehicle with an interior design and facilities tailored to their needs and moods – whether that is getting work done, catching up on sleep or simply having fun with friends. At the same time, purpose-built ride-sharing vehicles give automakers an opportunity to significantly lower vehicle-to-market costs thanks to their shorter development times, lower vehicle complexity and limited number of customers. This new breed of vehicles also has implications for lifecycle management as they have shorter lifetimes and their modular nature makes it easy to replace parts.

The Roland Berger report points out that OEMs are busy working on designs for fully autonomous "robocabs". But these vehicles are unlikely to enter mass production before 2025. In the meantime automakers have a unique opportunity to capture the valuable new market for purpose-built vehicles for on-demand mobility services – an emerging segment that they cannot afford to ignore. If they can succeed in positioning themselves in the game now, winning customers and building up valuable early experience, they will be well prepared for the next step into the robocab universe. When driverless technology finally arrives it will then be relatively simple for them to take their tried and tested purpose-built vehicle designs and basically replace the driver with the automated driving system, with user experience of driving the vehicle already tested and optimised to a large extent. This will put some OEMs ahead of the game compared to other OEMs that have taken a more cautious, wait-and-see approach.

The report mentions that ride sharing is on the rise. Dominating the new types of on-demand mobility services is ride-sharing (also known as "ride hailing" or "ride for hire"). Players such as Uber, Lyft in the United States and Didi Chuxing in China do pretty much what taxis did in the past, moving passengers from A to B in return for payment of a fare. However, the competitive pricing of these new entrants and their focus on convenient service offerings has added a new dimension to the traditional market.

Globally the market size for ride-sharing services is now an estimated 50 million rides a day. China, where the leading ride-sharing company Didi Chuxing provides an average of 25 million rides a day, is showing remarkable growth. Current forecasts are that ridesharing will represent 20 percent of total consumer transportation in the country in 2018, compared to less than one percent in 2015. The market in 2018 will be worth around EUR 180 billion. This exponential growth is due to a widespread lack of mobility, the result of China's limited public transit capacity, insufficient taxi services and restrictions on the number of license plates issued for privately owned vehicles. Indeed, Roland Berger estimates that approximately 40 percent of demand for licensed taxi services in China is currently unfulfilled, met instead by unlicensed taxis and public transit where available.

Today's traditional taxis – with the exception of London's black cabs and JPN taxi (Toyota) – are little more than conventional vehicles with a taxi sign on top. Purpose-built vehicles are a whole new ball game.