Annual Mobility Study 2025: Recording (Europe)

Great. Well, welcome, everyone. We'll we'll make a start. So, first of all, I'd like you I'd like to welcome you to the ninth annual mobility webinar. This is hosted by LEK with our partners from Vision Mobility and QSDCX.

Before we begin, I just need I've just got a few housekeeping points about the webinar itself. So, during the webinar, you can submit questions in writing through the platform. So we'll answer as many questions as possible in the q and a session, at the end. So just for your, reference, there's a q and a, capability where you can lock, lock in your questions for for that session.

In addition to that, there is a chat, so feel free to put in questions into the chat and discuss some of the topics that we'll be raising, during the webinar.

Now once the webinar has ended, you will receive the recording in your inbox a few minutes later, and we invite you to share that with any of your colleagues who you may think would benefit from these insights.

And if you'd like to hear about any particular topics in the future from from us, please do submit suggestions as well.

Great. So let's, just introduce, the speakers today.

So I am Vikram Basu. I'm a partner at L. E. K. I lead our transport practice in Europe. We also have James Carter, who is founder of Vision Mobility, a specialized consulting service focused on automotive and humility insights. And we also have Will Chamberlain, a principal in our transport practice, and, focuses on immobility issues as well.

Right. So let's, just give you a quick overview of this year's survey. So this is the ninth year of the survey, and it builds on prior years of research.

And, as you can imagine, over nine years, we have, gathered quite a lot of information.

We we're now reaching about one hundred thousand respondents. So the insights you'll see here today are built off that that that data, that we've collected over the years.

And, as in the past, the the insights here are built off primary research, our own secondary research, and our own thoughts about these, these topics.

So, today, in terms of our agenda, there are four key topics that we'll take you through.

We'll discuss, in the in the survey the continued appetite, for the car, which is a a theme that we've often discussed, on these webinars.

We'll then share, our views on what's happened with environmental concern and EV enthusiasm.

And then, we'll go into perceptions of some of the new technologies that are around, AVs and EV tolls.

And then we'll talk a bit more about the impact of the geopolitical uncertainty that seems to be, top of mind at the moment and thinking about liberation day.

So feel free to, drop in any questions in the q and a session, for for the q and a session and also in the chat. So I'll, hand over to Will who'll take us through the first topic.

Thanks, Vikram.

So on the on the topic of continued appetite for the car, it it's long been expected and widely reported that, innovations such as ride hailing, investments in public transport, increased congestion, higher driving costs, and anti car measures from authorities could reduce, appetite for using and owning cars. But actually, when we look in the last four years in our survey, there's a couple of questions that show this not to be the case.

So the first on, the data that's charted on the slide is when we ask people, would you own a car even if you didn't have to? And, actually, we get a we've seen a growth, and this is pretty consistent across countries. You can see we've got the US sample and the UK sample there. But you can see growth, up to two thirds of people in the US saying they, they would own a car if they didn't have to. And on a separate question regarding enjoyment of driving, there's been quite a significant, change. So, back in twenty twenty one, it was fifty eight percent in Germany, sixty percent in Spain, sixty two in France, fifty seven in the UK. But across all these countries, there's been an increase in people saying they they enjoy driving.

So actually, with the sort of renewed appeal, of the car despite what, some some of the other factors that you think were pushing in the opposite direction.

One of the things that, we think might be driving this, once you step outside of those of us who are based in central London and rely on on public transport, but is the the return to work.

So you can see, here, this is average days, working on-site, so not from home.

And compared to twenty twenty one, which from our survey was the the low point, on the chart, we've increased up to, between three and four days per week. Now on average, people are working from their place of work rather than from home on average. And I'm sure this fits with a lot of, people's experience. Actually, we didn't notice, in the survey, there wasn't significant change from last year. So last over the last twelve months, there's been a lot of, press coverage of workplaces increasingly encouraging people to go back to work, actually, the average didn't appear to move significantly.

Behind the average, though, there is an interesting pattern regarding people who are working fully on-site versus part time at home, the hybrid working model. So, actually, whilst the average has increased significantly, almost all of that change is due to growth in people who are working fully on-site. So that's the left hand chart here. As you can see, across all countries, back in twenty twenty one, it was down at ten to twenty percent of people who were working, fully on-site, and now that's up to fifty to sixty percent.

Whereas of those who work at home some of the time, actually, it's it's depending depending on country, sometimes it's moving up or down, but it's relatively stable at the two to three days per week, working from home or work.

And as I said, for for those of us in London, you think, oh, why would be being in the office more mean I, appreciate my car more? But the vast majority of people across Europe, the way they get to their place of work is by car.

So we think that could be one of the reasons behind the increased enjoyment of of driving and need to have a car.

And one other survey question we ask is regarding the, intent to purchase a car.

The the response were actually asked within the next year, within the next two to three years, or longer term.

And there's a bit you can see across all the countries here, a significant increase in people who are intending to purchase a car within the next year.

Most of most of this growth actually came at the expense of the two to three year category. So what we're seeing, in this survey is people bringing forward their expectations. So maybe last year, they were saying, oh, in two to three years. But, actually, now there's a quite a high number of people saying, I will, I plan to buy a car in the next year.

And when they do buy a car, we we also ask question regarding sort of optional upgrades that people might be willing to pay for on a subscription basis.

Now, overall, this this isn't seen as a particularly attractive, offer. So most people, well, fifty percent or above in some countries, said they'd be opposed to paying for any upgrade or subscription basis. Yeah. And, I mean, famously, three a few years ago, BMW received a lot of bad press for selling cars with heated seats and then it being an optional, monthly subscription to be able to use the heated seats.

So clearly, there's a lot of people who react quite negatively to this kind of, model. But we did see that some people would consider paying for many car upgrades and some, would only for specific ones.

So it really depends what the upgrade is for whether it would gain traction.

In our survey, we asked people what would be the key things they'd be willing to pay for on a subscription basis, things like ADAS, so advanced driver assistance systems, or in car entertainment or connectivity, were the key things people were willing to pay for. So a bit more like a software update for for your car to get the latest, capability, on self driving features, etcetera, with areas where people are most likely to be willing to consider a subscription approach.

I think the next section, we get into more detail on exactly, on environmental concern and EV infuselles. So I'll hand over to to James on that.

Hi, everyone. And, it's great to be here. And, greetings from Canada where where things are a little bit different, and, we'll talk a little bit more about that later on. But, before I go into environmental concern, EV enthusiasm, if you've got some questions, add them to the q and a. We've also started a chat. Make sure you've got some comments in the following that too. So, we'd like to go into the next slide here.

We're gonna ask a poll question. Would you consider owning or leasing a Chinese vehicle?

Would you a Chinese brand. Would you do that? Maybe not necessarily a vehicle that's made in in, China from a traditional brand, but would you consider a Chinese vehicle? So please add your add your, thoughts, Respond to the poll there, and we're gonna show you the respondents in in a little bit.

So next slide.

Oh, have we gone ahead a bit? Oh, no. I think we're good.

So one of the questions that we regularly ask is, do you want to buy an environmentally friendly vehicle? And And if we have a look at, interest in in such environmentally friendly transportation in twenty twenty four, we've seen that it's not only increased in twenty twenty three, but it also continues increasing. And interestingly enough, that's the only country but Spain. But if you have a look on that far side where it says, change in in, the difference, you can see US up by plus six.

Canada, UK, Germany, France, Australia, all up. So I think this interest in environmentally friendly vehicles continues to remain, which is great news.

Next slide.

And, really, this is a as we mentioned, this is a continuation of a long term trend of environmental interest, really on an individual level, and that's continuing to grow every year. And you can see that, right here from twenty twenty one through to twenty twenty four when we, started asking these questions, is that remains. So this is, I think, a really important trend and a really good, indicator for the future of electric vehicles.

Next slide.

Interestingly, we've seen that intent to purchase a electric vehicle compared to last year has, remain relatively stable in all countries, except the US. It remained stable and everyone else has increased.

Also, France and Australia have, remained remained stable or gone down a little bit, but that interest is replaced by hybrid vehicles. Now interestingly, and I think this is important, when we've done our secondary research, we find that we find that the gateway to electric vehicles is through hybrid vehicles. And and really people just can't get enough of electrons. When you get in and start driving a hybrid, you go, oh, well, what if I could, you know, reduce my fuel economy a bit by running it more on electric? And then really, people think, well, you know what? The way I can completely satiate that appetite is be go by going full electric, and this is very consistent in the research we've seen. So next one.

What's really important to understand in the EV landscape is that it varies very significantly by region. Now if you have a look at North America, it's dominated by premium models, and that's because there's no ability for Chinese entrants to come in. There's a hundred percent tariffs on EVs in both Canada and the US. There's less tariffs in Mexico, but that one hundred percent tariffs effectively blocks out low and medium cost Chinese vehicles from entering.

However, if you look at, Europe and Australia, completely different where tariffs are much, much lower, if any at all. You've seen a great range of, Chinese vehicles enter the market, and and are really soaking up, that lower end. And, while while more traditional brands tend to dominate the upper end, it's this lower end that's really expanding quickly. So what's this distribution of, e v's by price range by country? And you can see that, you know, across from US, a little less so in Canada and Australia, people tend to go for the more premium vehicles in EV and less so for the for the, the lower cost ones. But, France, Germany, UK and Canada tend to want more lower cost electric vehicles.

So right now we're gonna share the results of our poll here.

I'm not sure if people can see that or it's been Looks like seventy nine percent seventy nine percent of respondents said yes.

They would be willing to own or lease an EV from a Chinese brand, and twenty one percent said no.

That's pretty amazing. That's four and four and five would consider Chinese vehicles. So, you know, that that's, you know, really great. And my personal view, I certainly would as well if it was available to me. Next slide.

When we look at the concerns around EV adoption, for non owning, battery electric vehicle people, what are their concerns? And, generally, that remained, relatively unchanged despite the improvements that we're seeing in in cost, efficiency, and infrastructure. So let's have a look at a bit more. We see that a level of concern actually between twenty twenty two and twenty twenty four, the cost has actually gone down slightly, which we would expect, in Europe as Chinese, vehicles have come into the market. Range has actually increased just slightly, and public charging facilities has slightly decreased. And that's more likely to do with more charging facilities, rolled out. And, as we can see here, it's, a two hundred and sixty one percent increase in the number of public charging points, across the EU, and that's really quite amazing.

Another one that we've seen quite regularly is the cost of battery replacements. But the reality is, you know, they're eight years or a hundred thousand kilometers. So, you know, what we're seeing, is this underlying reality for cost range, public charging, and battery cost really improving significantly. So, you know, this remains a a really good direction, and I personally think it's, you know, perhaps there's more conservative people who that concern remains rather than, you know, looking at possibly what the data says. Next next slide.

So as we mentioned, consumer willingness is is to buy is is increasing towards, buying Chinese EVs, but there is still a perception that the luxury and quality still lag behind. And certainly, from, my look at some of the Chinese product out there, it is amazing, certainly, at or even sometimes above the quality, in reality, of of traditional carmakers out there.

So let's have a look at share of respondents ready to buy a Chinese vehicle.

And in, France, we saw twenty eight percent. Germany, thirty one percent.

Italy, thirty eight percent. Japan, obviously low.

Netherlands, thirty one. Spain, forty two. UK, US, and and world between thirty four and thirty nine. So really, you know, around one third, we're seeing of of interest in the Chinese. When we look at brand perception scores, as we would probably expect, the Germans are at the top, Tesla's and Toyota's somewhere in the middle, and Volkswagen as well, and, the Chinese brands are still at the bottom as less luxurious and lower quality.

Next slide.

It's interesting, James, because, obviously, people on our webinar, seventy nine percent said they would consider buying or leasing a Chinese brand. So maybe people on the call are more aware of the quality of some of these vehicles where, actually, this this was general population, so people have a stereotype. When people become more aware of the proposition, they're much more likely to. It's quite interesting comparing the general population with people on our call.

Yep. Right. And and, you know, once you people become aware and take a look, they realize that perception is likely to, you know, go up.

So Chinese has, become the world's leading car exporter driven by a surge of, in EVs, with Russia and Mexico importing a mix of ICE in EVs while Australia and Europe mostly receiving EVs. Now this Sankey chart here is particularly interesting because we can see where some of those vehicles, those car exports are going. So you can see where they're sourced, the exporting nation, and you can see who's importing them. Now if you take a look at China, what we see is that those majority of those vehicles are going to the rest of the world, I. E. Away from the ones that we surveyed here. So that's gonna be South American market, Asian market, African market, and Russia, very, very big receiver of of, Chinese vehicles.

If we have a look at, Canada, you'll see almost all our exports here go to the US.

US exports, also go to both, Europe and rest of the world and Canada, of course.

And and Japan has a split between between all. But, you know, I think the really important takeaway is that, you know, once we see China enter the market for North America, that that number's gonna grow pretty quickly.

And again, if we have a look at the top ten if you just go back one, if there's top ten destinations for Chinese exports, Russia, that's the big one. And, you know, they've pretty much taken over that complete market there. So that's really interesting to see and and understand us. Next slide.

Imports to our focus countries typically come from Canada, Japan, Germany, and increasingly China. Now China's not coming here to North America, but if we look in Europe, you know, a lot of Chinese vehicles are going there.

Canada, where I am here, almost everything goes to the US, and very small spat smatterings of things go elsewhere.

US, most of the exports come to Canada and and a few other, places as well. But again, the point here is that, the exporting nations the the exporting nations here, and Chinese growth is only going to continue.

I I think to just keep this in mind in terms of trade when we come over to talk about tariffs because this is an important thing to keep these things to to together. Next slide.

That might be the last one.

That is. I'm gonna hand it back to Will. And, keep throwing your comments in the chat, and, we'll go from there.

Vikram, you're on mute. Would you like to pick up on perceptions of autonomous vehicles and EV tools? Hi, everyone.

Yeah. So, let be before we go into the content, let's start with a quick poll here. So we'll bring up the poll. So the question is, how concerned are you by the safety of EV technology? So in in this section, we'll we'll we'll play back some of, the sentiment that's come out from the survey around some of the new technologies around EVs and EV tolls, and we'll, we'll we'll see what you think, a bit later in this, in this section.

So here's the next slide.

So what one of the things that we have been tracking is, interest in autonomous vehicles.

And we've we've seen over the last three years that that has steadily grown across all the surveyed countries and interestingly to very similar levels.

Even though, you know, there aren't that many trials of AVs outside of the US and China, the, the interest is still at similar levels.

Know that this question doesn't raise, the issue of safety at this stage, but we'll we'll we'll we'll test that. So so so people are getting back to being interested in the technology.

Now if we, if we ask a more direct question and ask if people are willing or interested to use robo taxis, what we find that there are some enthusiasts so that at the bottom, who would, be very happy to use an autonomous vehicle today without any hesitation. That's about one in five, one in six people. Again, pretty consistent across all the countries.

You you then have a a block of about one in three people who would be willing to use a robotaxi on condition that it's at the right price.

So, in general, just over fifty percent are willing to use Robotaxis and just under half, would not use it, at at this stage.

But but, again, pretty consistent responses across, all the surveyed countries as well.

K. So then if we, look a bit further and and ask about specific concerns, there is still a lack of trust in the underlying technology and concerns about safety.

So when you ask people more directly, what are your top three concerns?

Safety, appears top.

Still trust in the technology is it does does linger.

And and and the third one here is, perhaps a slight misunderstanding of of of of the technology as well, but but really just kind of not not being, happy that there are enough, kind of technology, backstops as well for for for AV technology.

So let let's see what, you thought of AVs and and and your enthusiasm. We'll just look at the results of the survey. So the survey suggests that, about sixteen percent have no concerns at all, about using robo taxes, and and and AVs.

About, sixty eight percent are partially concerned or neutral at this stage, and and then again, sixteen percent would never use a Robotech. So quite balanced, across the, never would and want people who have no concerns. And and and about two thirds of people still sitting on the fence, a bit neutral. So interesting. So slightly more I say slightly less conservative than than the than the survey would suggest, in the general public.

Okay. Well, let let let's then have a look at, how people thought about robotaxis once you start to be exposed to the technology. So what we've got here is some survey data from the US asking the same question, but where we have isolated specific states in the US who where we are seeing quite significant trials of robotaxis. So Arizona and California, in in in particular.

And, what what's quite interesting here is that, it seems to show much more enthusiasm, optimism where the services exist. This isn't necessarily users at this stage. We that is it's quite hard to just target specific users. But certainly in states where these, services are available, we we we we do see more optimism and more positivity around, the technology.

And and one thing to note in California, well, certainly in San Francisco, Waymo now has a similar market share to Lyft. It's about one one in five ride hailing, trips are actually through Waymo, which, is still behind Uber, but, but it's still on a kind of a a trial basis. So it's it it has made quite significant inroads in in San Francisco.

Yes. Next slide. I think, I think the point here we'd like to make is that if you look at the stats now in terms of, paid rights per week, where Waymo, as I mentioned before, has has made, significant immigrants in San Francisco. We're talking about now two hundred thousand rights per week, in Waymo robo taxis.

So I think the fact is, robo taxis are here, and they are about ten to twenty percent of the San Francisco ride hitting market.

The the other major trial of Robitaxes is in China. The the data there is not as, available, but but but certainly, we we we are seeing large scale trials of robotaxis in, in China as well.

So, you know, where where where we're seeing rollouts, we are seeing some positive feedback from, actual users, and and and and and the model seems to be rolling out in more and more cities.

However, I think for it to be widely adopted, there are still several barriers that that we need to understand and and and and be wary of. First of all, the tech and r and d.

The way the technology works, it it it needs to be tested in the environment that it's operated in. So just because it's being operated in Arizona, it doesn't necessarily mean that you can then pick up that vehicle and run it in Paris. So it it does need significant testing in local areas, but also under a wider range of testing conditions, harsher weather conditions, for example, most of cybersecurity threats to consider. So still more investment is needed on the tech and r and d. There's also the capital requirements, so potentially changing traffic management systems in cities, supporting infrastructure that may be needed there.

On on space usage, you you may argue that autonomous vehicles may unlock space in cities because you you may not need as many car parks, for example, or on street car parking spaces.

There's still social challenges as you've seen in the survey. Even though there's quite a lot of enthusiasm, there's still just under half of people are still wary of the technology.

And then final block is is governance and regulation.

It will require new regulation, new potential new, legislation as well to make sure that it can be rolled out, in, in in terms of mass mass transport option.

Okay. So we'll we'll now look at at another technology that we're tracking, which is eVTOLs.

So the the first thing we we we tested is just general awareness. And, you know, asking this question in the, in in in survey countries, you can see that awareness is generally lower than it is and then for autonomous vehicles. And and and it does vary a bit more between countries and US about one in five.

So one in four and Germany about one in five, for example. So there there is some variance here in terms of awareness of of of the technology. And in in the survey, it was described quite clearly in terms of what this technology is and, the the, the fact that it would be electric, the the fact that it would be, vertical tape off, and and for short journeys.

Okay. So next slide then. So we we then just checked how interest and and consideration for this technology would vary between people with prior knowledge and people in general population. So in in in the general population on the left, about forty percent of people who were not necessarily aware of the technology before after the description would consider using an eVTOL.

But that is significantly higher for people who do have prior knowledge.

So those so it would it would seem to suggest that people, once they learn about the technology and what it can do and and and and and and what it and how much it would cost, they would actually consider using it.

And if you go to the next slide, looking at what people thought about the technology and what it could do for them, they were quite interested in how much time you could save, the the fact that you could reduce congestion on the roads and and avoid congestion, but also reduce emissions. So those were the top, positive aspects of of eVTOL that people were interested in.

And you go to the next slide.

Then we also asked about what were the concerns, and safety is, a key concern. Sixty three percent of people still wrote about the technology.

You would argue that, a failure in this technology is is far more dangerous than a failure in the AV technology, so you'd expect that to be high on people's agendas.

Affordability, was a key one, and also lack of infrastructure. So, you know, the the the fact that we don't really have an eVTOL thirty port, network at the moment, is something that would hold us back as well.

K.

So that's a quick wrap up of our, views on on on new technology. I'll now hand over to Will and James to talk about the last topic, which is the impact of political uncertainty.

Yeah. Absolutely. So there's a few factors here we wanted to pick up on. The first being the reduced commitment to net zero and the EV transition.

So sitting here in the UK, the the new government, as of last year, announced a review of the zero emission, vehicle mandate.

So there's currently uncertainty regarding that and exactly where what how they're going to modify it. And only, I think, yesterday, was the day that EVs started becoming subject to road tax, in the UK.

So there is clearly a winding back of, support, for, the EV transition, and the noises more broadly around the commitment, to net zero in in politics and perhaps the political consensus, supporting that being eroded.

The I think in Germany and France, it's a similar picture as well. I think in Germany, actually, we saw a decline in EV sales as the as subsidies were removed, from those vehicles in in twenty twenty four. And, obviously, in the US, with the new Trump administration, there's significant uncertainty, but, also but also clear moves, away from investments in EV infrastructure, subsidies, and commitments, to green transportation.

On on the poor fiscal position, so, I mean, European US governments have had a poor fiscal position for some time now. And most recently, weak economies and geopolitical tensions have meant that there's been even less money for investment in transport.

In the UK, I think we now spend more money on debt interest than on the transport budget.

And in France and Germany, as I mentioned, the reduction in EV subsidies have been one of the reasons cited behind it has been the pressure on public finances.

I think that the biggest issue here, in the context of what we've been talking about today is the outlook for, you know, road tax, where they're starting to tax, electric vehicles in the UK, but fuel duty. So tax on petrol and diesel for Britain, France, Germany makes each of their respective governments between twenty and thirty billion pounds a year. And, obviously, as we shift away from high tax petrol and diesel to lower tax electricity as our power source for, for for driving. There's gonna be a significant, worsening of the sort of fiscal position of the the transport areas as well.

James, do you wanna pick up on the the new tariffs?

I do. I do. So we'll just jump over to one one more slide.

Yeah. Sorry. Too far.

Too far. There we go.

So what you know, being up here in Canada, you know, where I am, I I really wanted to give people, in Europe a little bit of a picture, of what's going on here, just perhaps to almost give you some clarity and almost open your eyes to what could happen, in in with the trade relationship between the US and Europe and the UK. So what I wanted to do first is is give you a a little bit of a glimpse of what supply chains look like in in North America. And because, US, Canada, and Mexico have had a free trade trade agreement for a long time, US and Canada actually have had it for actually over sixty years, what what we've seen is OEMs and, suppliers really see international borders as completely nothing.

There is no barriers at all. And so what happens is that locations are chosen based on who does who offers the best cost at the best quality. So, that's why if you start to track how these parts are put together, we can see that they could cross international borders several times. Now let's take a look at this slide.

This is put together by the BBC.

But as if you can see here, number one is powered aluminium sent from Tennessee. But there's actually a a kind of a a step before that in that, that powder aluminium will almost definitely come from Quebec.

So it will come from Quebec, and then being turned into powdered aluminium. Then it's sent to Tennessee. It's turned into it's cast as connecting rods for engines in Pennsylvania.

From there, it gets sent up to Canada, and there the rods are shaped and polished. In other words, they're machined, to to be what they want. Then they get sent down to Mexico, and in Mexico, the connecting rods are then joined with the pistons.

They're imported back into the US, then the pistons, get assembled into the engine in Michigan, and then another step again is that engine that gets assembled into the vehicle. So what we can see is things are getting, shipped around everywhere for the best possible, outcome for for the OEM.

So what happens is when you start putting in twenty five percent tariffs on on Mexico and Canada, these tracking these parts becomes extremely difficult. So, you know, if you look at that engine, you know, that connecting rods, when that bounced over all over the place, it's really difficult to pinpoint where exactly the, the the sourcing and then the additional, value add, can be taxed from. So that's that's one point. The other point is is that tariffs is a tax.

And, for the US, when you start importing things, there's that tax on that. And when you've got twenty five percent across the board, I think the real worry here is that we're going to, spark stagflation where, inflation can't be controlled by, interest rates. For Canada, Canada's, in a really tricky position because we have seventy percent of our trade, with the US. So it's very important for us that we have free and fair trade.

So I think for us here, in Canada, we have a lot of worries about what is going to happen in the next while, if the tariffs, come in. And, really, today is the day when we find out a lot more. So I'm gonna hand it back to Will.

Thanks.

Yeah. Actually, just so while you're talking, it was one of the questions in the chat was regarding how road construction maintenance are gonna be financed as petrol taxes decline.

I think one of the things that we probably expect, and this is on the bottom of the page that I'm sharing now, is, well, we're gonna have to find a way to tax EVs. We think that's gonna be some sort of usage tax. I think some countries have already started, schemes where it's based on relatively crude methods of how many kilometers or miles, you drive to get a usage base.

That obviously is quite inequitable because, you know, people live in more remote areas using less busy roads will be paying more than people who live in busier areas but drive not as far.

So we there's the potential there for a more sophisticated road pricing mechanism.

But, I mean, you get into all sorts of, complications regarding that, but we think there's a underlying need there to replace the funding stream that comes from, petrol and diesel taxes at the moment.

Here without being too doom and gloom, though, that was just one of the points on the page. We're trying to draw together some of the out sort of impacts of what we were talking about, on the previous pages.

Building on James' points, we'd expect, therefore, yet higher new car prices.

Used car prices should be quite buoyant, supported by the due to the reduced supply and higher cost of new cars.

And there's the uncertainty makes it as it's, in fact, almost impossible to know where to invest in manufacturing capacity. So there'll be really quite long term impacts, of this.

On the reduced commitment to net zero in the EV transition, obviously, there's the negative side of that from the impact on the environment and but the continued dual fuel environment throughout the twenty thirties and forties with potential scaling back of ice spans.

But on the flip side, many people in the new car sector or vehicle leasing industry have been saying, oh, actually, the EV targets have been suppressing demand in the short term because they have to meet certain ray ratios of EV sales. So any loosening of that could potentially have a short term boost to, to car sales.

But there is the flip there's the negative side of, again, the any sort of protectionism or rolling back in Europe of targets will only mean that markets where they're accelerating electrification, I. E, China, will move ahead in terms of that, the technology.

I think that that's the final, points on on these pages.

And then, Vikram, would you like to pick up on some of our I think yeah.

Just just to wrap up then on on the four points before we go and and dive into q and a. I think, on on the continued appetite for the car, we what we've noticed is that cars are still popular. People are entering, driving.

Commuting to work and concerns about the environment are likely to play a role in the near term in the intention to buy a car and probably more EVs.

But on the, same same the same kind of concerns that seem to be there around EV adoption, around range, price, charging. Although we do know that huge improvements have been made in in all those areas, but despite that, those, those concerns are are being raised.

Chinese brands looks at to continue their growth across the world.

They've they still got a perception gap to to cover, but but I think, it's, it is clear that they in terms of the quality gap, they they have closed the quality gap in in many of those areas.

And then in terms of new technologies, we do see high interest in robotaxis, especially where they're already rolled out and where they have become real inverted commas. So we we we we see that, that when when they are rolled out, people are getting used to using them.

EV tolls, there was still kind of low awareness. That's still earlier in the curve, but there there does seem some enthusiasm for what it could deliver as, as as a proposition.

And then I think we we covered a few things on on on the geopolitics. So reduced coming to net zero, trade uncertainties, poor fiscal position of governments.

Okay. Well, we're happy to kind of jump into some of the q and a. I mean, maybe we can if it's not in the formal q and a list, then we can certainly pick things out of the general chat.

So maybe I can, just, grab some of this q and a, and I'm I'm gonna throw it to to Will and Beekram and maybe take a little stab at myself.

But, yeah.

The first one here is, are there any insights on how road construction and maintenance are going to be financed, as petrol taxes decline, I e road tax fee for other EVs? I know we sort of answered that, but do you think there's, other creative ways that, that that governments might look at replacing this?

I mean, ultimately, the choice is either to finance it from, general taxation or or from some and I don't think they'll have an appetite for that. So I think they will have to find a way to, to tax vehicles, other than using fuel duties, we shift away, to electricity as the primary fuel.

Yeah.

And I for those of us who charge at home, that's really difficult because how would you, how would you tax someone's home electricity, which they might be using for heating, cooking, etcetera, rather than driving.

So I think it will have to be a usage base, as I said. Sorry. Vikram.

Yeah. Doug is gonna build on your point now. I think some some form of road user charging, is is likely to be the, the way forward. The technology is maturing there and is kind of available already, and, you know, it's it's been using HGVs, for example. And we can imagine that being rolled out to personal cars.

Do you think there's, the concern for the environment will be maintained in the long term? We we saw it, you know, con continuing to step by step increasing. What do you think the long term's gonna look like?

Well, perhaps if I give a a first view, I I think concern for the environment is likely to stay there as long as it's affordable.

I I think there's in in in most of the survey work that we've done, there are some segments of the consumer world who who who will pay more for green solutions.

But but but but the majority will do it if if the price is right and if it's either on par or cheaper. So I think, I think people will switch to it as long I mean, it I mean, we we have asked question before is that if it costs the same as a a nice vehicle, an EV, what would you choose? And people would choose an EV as long as the, you know, the other issues of charging, etcetera, availability have been addressed. So I think, the the underlying interest is there but at the right price, and and and and to unlock the mass market, it has to be at the right price in my view.

Yeah. And, Vikram, to build on that, it's it's really interesting looking at the data because when you look over several years, I think last year, it was the same. So each year, the net score in terms of that that James talked with interest in environmentally friendly transport has been moving in the same direction. But, actually, there's also been a polarization.

So whilst those who are saying they're significantly interested or interested has has grown faster, there's also been growth in the the people saying they're significantly not interested, so people hardening in their sort of, almost, anti environment opinion, and that in many countries now is sort of fifteen to twenty percent. So I I think looking at that data, you could think, well, if they've hardened in their opinion of saying, I'm not interested in environmentally friendly transport, actually, it'll be quite hard next year or the year after to win them across into the interested, camp.

So you think it'll keep going and then eventually plateau and getting those last ten or fifteen percent is gonna be not easy unless there's Yeah. Regulation that says you must.

And someone in the chat highlighted Spain, I think, where it's it has been flat, compared to last year, and that, Spain was somewhere where there's very few people now or and last year also that were in the, the not interested in environment camp. So that's sub ten percent already. So it's it's hard to move up from from there.

Next question. Space hypothesis here from from someone in the chat. Space use usage, for AVs.

How about the impact on road traffic as there are more vehicles circulating around the city?

Which has been the utilization rate, you've assumed?

Yeah. So we we we have done quite a bit of postulating and modeling on on this point around what what would happen if, robotaxis, became a reality and at what price point would they be run at. So we we just monetize it. And and I think if you take a robotaxi that is running eight hours a day, it we we we think it could get to the point where per kilometer, it's on par with public transport almost.

And and and for that same price point, you're getting your own personalized vehicle, and go from a to b. So that's very, very compelling proposition.

However, as as as the question pointed out, the issue with that would be, shifting some cities from mass transport to individualized transport would be problematic. There isn't enough space on the roads to do that. So I I think in reality, what would happen is there would need to be some some type of congestion charge or or or tax to to to prevent that from happening.

And and and it could be based on time based usage. So, you know, at peak times, it'll be harder to it'll be more expensive to use an individualized transport mode versus the mass transport because otherwise, the, you know, there there there won't be enough space.

So I I I think, you know, it'll it'll be a bit of time before we get to that kind of reality, but but postulating what could happen, I I think, yeah, it's it's unlikely to be, an unfettered, access to, Robitaxes.

So, another question here is is how do you think, the tariffs will, you know, impact Europe? Obviously, today is the day. But, you know, as you know, especially looking at automotive, where, you know, all of, say, BMW's SUVs are made in North America. Do will Europe respond with the automotive, you know, tariffs of their own? What would they look like? How would they roll out? You know, especially given, you know, where Canada is, and and do you think that will have an impact?

Will?

Will, do you wanna get to that one?

So the impact of tariffs are on the UK. It's yeah. There's all sorts of, I think I think it's hard to know how long they'll last for. And I think while we're preparing for this webinar, there have been various sort of back and forwards.

We when we actually asked the questions that was, I think, now two or three months ago, we asked people in in the US, do you think you're more or less likely to, like, buy a car or buy an EV and how how the new Trump administration is going to impact you? And actually then we didn't have that visibility, of of exactly what was going to happen. I think in the UK, obviously, the big thing I think I've been thinking about recently is regarding how it impacts UK based manufacturers. So JLR, example, they export a lot of Range Rovers to the US that are now more expensive.

They're already premium vehicles. Maybe it's not too price elastic, but, have to wait and see.

Yeah.

I think it it's, it's very hard to plan around this at the moment, and I think that's part of the issue here. I think some some decisions about where you met your vehicles take many, many years to to, change and evaluate. Right? And beyond the four year term of, of of of of this administration as well. So it it is it it is very tricky for the industry in in my mind in terms of how best to react to this, because if you don't have, manufacturing facilities in the US today, there there's not much more you can do than than just kind of, you know, either, you know, manage your pricing, somehow or or or push other markets harder. Yeah.

I mean, that's that's certainly a a good one because, you know, four years we have four years of of Trump, but beyond that, then what? And certainly, if if companies both on a a supplier scale and and an OEM scale, it would take four years from inception to opening those doors, for those factories. So, you know, I I think people, even, you know, what what does that long term look like rather than the the short term Trump thing?

Another question here. On road maintenance, before applying more duty on EVs for road usage, the policy should be to ramp up duty on petrol and diesel. Politically, that's likely to be unpopular through parties as EVs are perceived as being expensive and low income. Voters will tend to be last for transition to EV.

They are more expensive than old petrol and diesel cars. We are missing the massive negative air quality effects, of burning fossil fuels. What have you seen with that?

Yeah. I think I think that's really inter I think it's interesting. I don't know where your base, Ben, but in in the UK, there there's been the freeze on fuel duty and even in tight budgets. I I think the latest one, Rachel Reeves, didn't she, again, canceled the increase in fuel duty. So there's been this freeze on it for quite a long time now, and it's intriguing that in the fiscally constrained environment, there seems an unwillingness on both main political parties to increase tax on petrol and diesel, for the reasons you mentioned.

I I I think the reality is that the road user charging would be in addition to petrol and diesel, fuel duty. So drivers of petrol and diesel will be paying their road tax, their, their tax when they're filling up with petrol and diesel, and also a new form of road pricing will be ultimate thing, whereas the electric vehicles would only be paying the, the road pricing and potentially the road pricing could be at different rates. Although, as you say, they might find it politically difficult, to give discounts to, higher income EV owners.

Yeah. And I think the other point I'd make, although it doesn't necessarily impact the central road maintenance budget, but but it but it does it is essentially a tax on petrol and diesel is the local authorities who are rolling out low emission zones. They are differentiating car park pricing, on street pricing by vehicle emission spans as well. So I think there there will be other layered taxes, that petrol and diesel pay drivers will will have to pay, and that will be, you know, kind of independent of, the, you know I I guess, will hit everyone and anyone who owns a vehicle.

The poorer end end of the population are probably gonna have the older, more polluting vehicles as well, and they are likely to be hit harder by these points as well. So yeah.

It's a it it will be imbalanced.

You think as prices for EVs come down, you know, we're starting to see quite a few used EVs, under ten thousand pounds in in the UK and and here in Canada under under twenty thousand, Canadian dollars. What do you think there's going to be a point where people will say, well, you know what? On a payment per month basis, it it's gonna wash out out the same as that used car that costs fifty percent less because all of those numbers are, you know, purchase numbers are are much lower, but the fuel costs, do you think that'll start, impacting more people soon?

Yeah. I I think I think partially that that that will help, but I I think that there's still a more fundamental problem about access to cheaper charging, where cheap charging is at home, where you can use it on an overnight tariff, where you're parking on your private drive, and and that's that that is not accessible to everyone at the moment. And if you're relying on public fast charging, for example, that's quite pricey.

Mhmm.

And, we have seen in the UK, certainly, when when when the electricity is present quite high that that using a fast charger, on the, you know, on on on the road network was not far off from picking your car with, with petrol. So I think that there's there's a need for accessibility to charging as well to unlock that that that secondhand market, I think, as well.

Yeah. I absolutely agree with that.

I I think that the the data shows it it it's booming, Jay, the secondhand EV market.

So, obviously, as you'd imagine Yeah. As the as the cohorts of vehicles come through, there's so many more. And, actually, it was a question someone asked earlier in the q and a about, press saying drivers don't want EVs. But, actually, when you when you look at the data for, like, how many new cars are EVs and then think about the fact that ten years ago, virtually no cars were EVs, the the growth in the stock of EVs on the road, I mean, in the UK, was forty percent up, like, in the last year. So it went from one million to one point four million EVs on the road. So I think sometimes maybe expectations for the outlook and the uptake are lower than where they have been in the recent past. But, actually, there is a huge growth in electric vehicle uptake, and that includes both of the new ones and a lot in the secondhand market out of these a lot of the high volume years are reaching two, three, four year old vehicles.

Hey, James. I think I should mention the last question perhaps.

Yeah. I think that would be the last question. I don't think we have any more. So, you know, perhaps we can, wrap out now.

So, you know, if you've got any more questions, please don't hesitate them to send them to, one of us, and and we can, answer them separately.

However, I would like to really thank, Will and, Bikram and the rest of the LEK team, for all the work that they put into it and really making made this, such a great webinar today. So thank you very much. A couple little little other things as well. First one is, this webinar has been recorded and we will be sending you a copy to your inbox when you're done. So, take a look again.

Reach out again if you've got any questions. And, we'll be able to to, take it further. So thanks again.

Thanks, everyone. Bye.

Thank you.