Tomorrow’s world is still in the process of being formed and never before have we had such a huge opportunity to shape that future. As the population grows and urbanization gathers pace, new challenges inevitably emerge. Smart mobility is one of these new phenomena that will undoubtedly transform the future of transport, as people seek the simplest way to get to where they want to be.
What is smart mobility?
With our cities set to become more and more populous as time goes on, we’ll need to be smarter in the way we get around – a principle that applies to everything from how we fuel our vehicles to how they are driven.
Smart mobility is one answer to these problems. It means cleaner, more eco-friendly transport, journeys that are safer and smoother and using vehicles in a more conscientious way. It’s estimated that by 2025, the annual smart mobility market will be worth $400 billion, which is eight or nine times its current value.
Smart mobility trends look set to be guided by three key developments: smart fuel, smart vehicles and a smarter way of using means of transport.
Smarter fuel
Our current combustion engine technology has its limits. In the future, it’s expected that more stringent regulations around CO2 emissions and fuel consumption will lead to electricity being more widely used, in the form of hybrid vehicles, plug-in hybrids, and battery-powered electric cars. All of this, combined with better and cheaper battery technology, will see the market significantly grow in size.
By 2025, it’s expected that 25% of all new cars will be electric and that the battery market alone will be worth between $80 and 175 billion. Forecasts also point to an increase of between $70 and 100 billion per year in revenue for the industry.
Intelligent vehicles
The vehicles of the future will be very different from the ones we have now. Cars will receive traffic updates in real-time, be equipped with sensors and cameras which significantly improve safety and send text messages when their batteries are completely full. These developments – and many more like them – will open up plenty of new investment opportunities.
Forecasts indicate that by 2020 around 50% of all new cars will feature basic autonomous driving features and that the annual revenue of the advanced assisted driving systems market will have risen to around $90 billion (up from circa $15-20 billion now).
Smarter use of transport
There are over a billion cars on the planet which – together – drive a total of 16 trillion kilometers every year. Urban areas are become more and more densely populated while owning a private car is becoming an increasingly inefficient practice. The lack of parking spaces and increase in traffic volume are becoming growing problems – and that’s before you even look at the implications in terms of pollution.
Car-sharing services – where multiple people own and use a single vehicle – have already experienced significant growth, something that is destined to continue. In Italy, there were 1.86 million car-sharing users in 2018, 90% of which were signed up to free-floating services. In comparison with the 2017 figures, the biggest increase was in station-based services, which grew by 37%, while free-floating car-sharing services registered 27% year-on-year growth. In total, car-sharing vehicles drove 88.9 million kilometers in 2018. (Source: Third National Report on Sharing Mobility from the National Observatory on Sharing Mobility).
In conclusion, smart mobility is, without a doubt, changing the way people get around, prompting car manufacturers to adopt more sustainable approaches and team up with some of the giants of the tech world to anticipate the market, opening up new investment opportunities in the process.
(Source of data in the article is UBS estimates November 2018 unless otherwise specified)