Annual Mobility Study 2025: Recording (North America)

So welcome everyone to the ninth annual, Global Mobility Study. And, this is a really, great webinar. And we've been doing this for nine years now. And, some of the insights that we've, come to show you today, are of of really great quality because of the amount of of work and also the amount of responses that we've had. So, I would first like to introduce you to, my three colleagues here.

Dave Fish of CuriosityCX, Matt Wayne of, LEK, and Rob Hazelhurst of of LEK too. So thank you very much to to all of you for, joining us here today and, for the people, online too. So thank you very much for joining us. So a couple things before we get right into it.

You'll see some buttons on there. On on the bottom there, you'll see one for chat and one for q and a. If you've got some questions that you would like to ask us, hit the q and a, write them in there, and we will, answer them at the end of the, webinar today. However, we've also got some chat buttons, and we're gonna ask people some questions. We're gonna try and provide some conversation and and get people thinking about different things as we present this. So make sure you, put some ask some questions in the chat, make some statements, look at what we're presenting and seeing what what's going on, and and throw something in there for for not just us to answer, but for everyone to, think about and answer as well.

This webinar will be recorded, and it will be sent to you, at the end of the webinar so that you can review it later on.

And, also, feel free if you've got some questions after the webinar is finished, feel free to contact any one of us, and we'll be able to help you out.

Okay. Next slide.

So this year, the, annual mobility study has thirty five hundred respondents from seven countries, and once we add all, our previous research in over those nine years, we're up to almost one hundred thousand respondents since back in twenty sixteen. So this is a long study and you'll see some of the data is very deep as we go through this today.

Next slide.

So with that, I'm going to hand it over to Matt.

No. Me.

Oh, Dave. Sorry. I'm handing it over to Dave. My apologies.

No problem.

Okay. Thanks, James. So, yeah, we're gonna talk about a little bit we've been tracking this over, number of years as James had mentioned. So we're gonna talk about the, sort of attitudes around car ownership. So with all the talk of autonomous and, new forms of mobility, James and I and the entire team really we're really interested in tracking this this, sentiment over time, of whether people would wanna sort of break away from owning a car completely.

You know, there's a lot of things going on, like, sort of autonomy, the grain of Americans, for example, and also, you know, the continual, sort of migration into urban centers along with the availability of things like micro mobility. We thought, well, maybe over time, people wouldn't wanna own a car, and, that does not seem to be the case. That is, or or I'm sorry. It does seem to be the case over time.

Over time, you see just a gradual increase of, folks who, say, yeah. I I if I didn't have to own a car, I would from fifty nine percent in twenty twenty one to sixty five percent here in the US in twenty twenty four in our study.

That same trend, we could see in the UK. So, it's not a radical shift over time, but it is a gradual one that seems to be going, in that direction.

So so, yeah, who knows? As we move forward, maybe we'll return to a time when people are walking, taking mass transit, and whenever autonomous becomes mainstream, that certainly, may change things up profoundly.

So we move to the next slide.

The trend for the last four years, in terms of ownership, you know, said, it continues to kinda move. If I didn't have to own a car, I wouldn't, move it from two thousand seventeen, from thirty six percent to thirty five percent. So, you know, it's declining ownership enthusiasm, through two thousand and seventeen to two thousand and twenty and then a bit of a recovery.

Move to the next slide.

Feeding into this is the the lingering effects of COVID, where the world changed and we started working from home.

And you could see despite a lot of publicity of people being called back into work, our study shows that a lot of folks are are continuing to work at least hybrid at home predominantly across all the countries, most pronounced in in Spain, a little less settled here in the US and Canada. But you can see that's certainly contributing to, ridership, the need for maybe multiple cars in the household.

We, you know, we we've been kinda monitoring household fleet situations too, and and those fleets are are gradually, becoming smaller and smaller as people have less need to have, if in a home with two working people, you know, the need for both of those folks to commute to work. Go to the next slide.

Yep. And you can see the shift is mostly, for the for those people working fully on-site.

People who work on-site are are much more likely to obviously drive, versus people who don't.

And you can see that shift between twenty twenty one and twenty twenty four.

You go to the next slide.

And you see the enthusiasm for cars, over time is, increasing interest in in buying a car. Now, of course, that enthusiasm here is a fever pitch here in the United States, due to the impending, tariffs. This was, you know, the that was collected before. There was much hullabaloo about tariffs. So, it'll be interesting to see, in the upcoming months whether this enthusiasm, continues. But you could see there there is an increase over time, from twenty twenty six or twenty twenty two, excuse me, about twenty six percent, to forty two percent, intending to purchase power the next year. So and you could see that enthusiasm was pretty consistent across all of our countries with the exception of Australia where there's kind of a a mellowing of of interest.

New cars, you know, there's we asked to what extent are you willing to consider to pay for upgrades on your car?

You could see there's there's quite a bit of, interest in, subscriptions and specifically software subscriptions and cars. And you can see, you know, most folks aren't really interested in subscriptions, in their vehicles, unless they're done really well. And you could see, you know, about fifty one percent said they they're opposed. And, you know, this is kind of a generic statement in here. If you sort of drill down into this, and you see that I would only consider paying on a subscription for certain car upgrades, there's certain things that add a lot of value to the vehicle, where people are okay, paying, a, some kind of fee on an ongoing basis.

Tesla comes to mind in terms of their premium connectivity, where you get a lot of value for not a lot of money, and it's also fully subscription, fully software based. And it it's it's accretive. Right?

Versus the very famous BMW attempt to charge for heated seats, which, you know, that's something that's already, like, a physical thing in the vehicle, that people are accustomed to already having, and there's a bit a lot of backlash around that. So, I think we need to be careful about dismissing subscriptions completely, but we have to be aware that there is, some, you know, backlash and and negative sentiment around the concept with consumers.

So, like, I think the key there is, providing a lot of extra value when you design software and you and are tending to by subscription.

So and with that, I'll I'll turn it over to, I believe, Rob.

Vote for two. It's coming to Matt.

We're to Matt.

Thanks, Dave. No worries.

Great. So the next section, I see some questions from Susan in the chat. So hopefully, we'll get a chance to, to address some of them as we go through these pages. But, this section of the survey or the results talk about, consumers' interest in the environment, as well as their enthusiasm for, EVs or or electric vehicles.

But before we go, too far into here, we did have one polling question. I think, James alluded to this. This is when you can use some of your your chat buttons here. And the question is, would you consider owning or leasing an electric vehicle, from a Chinese brand? I'd be curious to see the, the results from this, this group. We asked this in our survey, and we can compare those to some of the results that we have, in a in a few more slides.

But as those as that continues to fill let me, let me plow forward, to to the main, topics here.

So here on this slide, what we can see is that, you know, the last year has seen a growth in interest in environmentally friendly transportation.

And what this captures is, you know, a growth of those, stating that they would be interested in environmental transportation and a reduction in those that are that are not that are not interested.

And in fact, the US, is up on a net basis up, up six percentage points over last year. And, all regions, with the exception of Spain are are up as well. So we're generally seeing, you know, continued interest and shift towards environmentally friendly transportation.

And when we look at a little bit more of a longevity, this is a continuation of a long term trend. So the data we have here is from twenty twenty one, to twenty twenty four, and it's looking at the similar, you know, net interest that that we just showed on the prior page. And you can see that, growth in environmentally friendly transportation, does not appear to be slowing. We're seeing increases, year over year, you know, some some anomalies between specific years, but generally, this trend is is up and, and to the right.

And one way that this interest is showing is through increased expectation of buying an electric vehicle. So we surveyed our participants to ask them what type of car they're most likely to purchased.

Those are ones that are intending to purchase a vehicle, you know, in the next three years.

And, sorry. And, what we're seeing is that, we are seeing increases in the proportion of people that wanna buy a BEV in most countries.

The US, is a little bit different. I'd say the the US, Australia, what we're seeing here is that this is primarily flat, the percentage of folks that are looking to to consider buying a battery electric vehicle.

But we are seeing some increase and some growth in in non just battery electric vehicles, but plug in hybrids and, hybrid vehicles as well. So we're actually seeing that increase a bit.

So there are some differences and different trends between the countries that we're seeing, and we want to double click on that. So we took a look on the next page, to try to understand what is the landscape that that that may be differing across regions, across countries, And, one of the things that we maybe think may be contributing to the different propensity or different desire to be purchasing a battery electric vehicle as your next car purchase is is really the, the difference in price range and what vehicles are available in every country.

Maybe I'll double click and take a look at the US, but what we've done here is we've tried to characterize and categorize the types of vehicles that are available, within each region within each region.

There are different brands, different makes, different models that are that are available in different countries, different parts of the world. And when we look at the US, about sixty percent of the battery electric vehicles available for purchase are premium. So we are dominated by more premium models. Compare that to some of the European countries, which have access to, different brands, different makes, different models, and in particular, going back to one of our questions that we started this with, you know, some Chinese EVs, which have which have entered the market. And there's also some other good value, low cost EVs, whether that's Opel or VW. So it's a bit of a different a different landscape when we look across, various regions.

Now what's holding people back, from from buying, battery electric vehicles? So these were some of the key concerns that were illuminated by non battery electric vehicle owners, and the top concerns remain cost, range, charging infrastructure, and, battery replacement cost. And an interesting thing happened with the survey last year, and you can see it in these numbers here. Now they're not hugely different, but cost is no longer the number one most important criteria by it by head and shoulders over other areas. That was the case, I think, up until last year was the first time we we saw that trend, you know, reverse.

And, you know, we have some hypotheses here. I think some of this might be that people are moving into more of the what would it be like to live with and own a a BEV, and some of those concerns are are rising to the top. You know, what's gonna happen when I get to the end of life and I've gotta replace the battery? What's it actually gonna be like when I've gotta drive, you know, to grandma's house for Thanksgiving? Is it gonna help me and support me with that with that mission?

So we are seeing, you know, some of those there. But it's also worth noting that, you know, when you start to look at perception versus reality, what's happening is we're having a more favorable environment for battery electric vehicles, across all of these categories. In fact, you know, price premiums, you know, the the premium you have to pay for a battery electric vehicle versus an internal combustion engine, that has been significantly reduced. I think in twenty eighteen, it was roughly fifty percent. Now it's less than twenty percent, and some models, know, you can get at, you know, almost at par or even cheaper.

Range for vehicles continue to increase. The number of charging infrastructures and charging points are increasing, and we're starting to see, you know, availability of warranties, whether that's manufacturer or aftermarket, for batteries, you know, which can go and offset some of those battery concerns. So perception still, you know, still is what it is, but the landscape that that, you know, battery electric vehicles are being sold into in and the infrastructure to support it, you know, has has continued to improve.

So with that, let's let's pause and take a look at our, our poll results. Sorry. I'm moving ahead too fast. I don't know, Susan, if we're gonna be able to share this, or do I just read it?

Maybe I'll just read it. Not sure if it can it can pop up, but I'm seeing that, almost two thirds of of folks responded said that they would consider owning or leasing an EV, from a Chinese brand, about a third, did not.

And that's a little bit more, bullish or than, than what we got in our survey, but, we generally saw we asked the same question to survey respondents across different countries about whether or not they're ready to buy a car from a Chinese brand. Obviously, those those in China are. But when you start to look at other regions, and we'll look at the US here, you know, about forty percent. So we're not drastically different. Maybe we've got a bit more of a progressive group here that's that's open to to buying, Chinese brands.

But when we look at that and we look at the data on the right hand side, there still is the perception of, Chinese brands as being less luxurious and of lower quality. So we've we have them rank it on a scale, and you can see, you know, BYD, MG kind of at the bottom of that chart, versus some of the other, brands, whether that's, you know, BMW or Audi, which are being seen as as more luxurious. So, people are open. I do think there's a little bit of, you know, marketing or, awareness that needs to be done in terms of what these very feature rich vehicles have, if they're even allowed in the country at some point. But but that's that's the situation here. So we are seeing an interest, in, in Chinese brands.

Double clicking on China a bit more, China's become the world's leading car exporter. They're exporting over five million cars. This data is as of twenty, twenty three.

And approximately, you know, a quarter to, I guess, yeah, about a quarter of these vehicles that they're exporting are EVs, either battery electric vehicles, or or hybrids.

On the right hand side of the chart here, we see the destination for Chinese car imports.

Russia and Mexico making up a very large share of that. Those vehicles tend to be, you know, more internal combustion engine. And then when we move into, you know, Belgium and other EU countries, UK, Australia, that's a significantly higher proportion of of electric vehicles that are being exported to, to those regions.

And on the next page, and this will be the last page in the section, when we when we zoom out just to the core countries in our study, you know, we're seeing that, imports typically come from Canada, Japan, Germany, and, increasingly, China. It's it's worth noting. I know we've got some, some Chinese, imports coming into the US. This also captures some some western brand western branded vehicles, that are manufactured in China. But we are seeing, you know, a fair amount of and we'll get to this when we when we talk through some of the geopolitical areas, but, you know, this is a a global ecosystem. Cars crossing across borders and fulfilling demand in multiple regions.

So with that, I will hand it over to, my partner, Rob Hazelhurst, who will take us through, AVs, eVTOLs, and, geopolitical uncertainty.

Great. Thank you, Matt, and thank you, James and Dave. I think, so we talked a lot about cars and vehicles. What one thing we've always done in this mobility study is to go beyond, the the things on the forecourt today and and start thinking about some of the more, disruptive elements of mobility. And, you know, while our questions ask about a range of things, including micro mobility and other pieces, what we've chosen to focus on today is autonomous vehicles and eVTOLs.

So I'll start with autonomous vehicles.

I was in San Francisco a couple of months ago and and took my second weigh my ride, and, you know, it's had no hesitation in doing that. It's it seemed very safe. It seemed, like a a great experience.

We asked the consumers, most of whom who have not had that experience, what their, first of all, what their overall interest is in, autonomous vehicles, and, you know, we kind of allow that kind of robotaxi phrase as well, to convey that what we're talking about here is true autonomy as opposed to, just different levels of ADAS, that that you see in many vehicles today. That has been on the rise universally across every country we have looked at.

So although that, you know, maybe industry anticipation of the timing of arrival of full autonomy is is is forever being pushed out, this is happening under a backdrop of more consumer acceptance that we're seeing across across these different markets. So here in the US, almost thirty percent of of consumers are stating an interest, and that is kind of a similar level to to the peak in a lot of the other, other markets here in the study.

And so, you know, again, we we think well, it's certainly only a minority. It's a material minority and a growing one, and and and that interest converts if we spoke the page to, okay. Well, would you actually, take one, and then say, I'm I'm firmly in the yes camp.

Eighteen percent of our American respondents would would sort of jump in without hesitation, and and kinda get there. But incrementally to that, there is, you know, another thirty three percent. So in total, about half who would, you know, strongly consider it effectively if the value proposition was there or if it was cheaper, if if if that was the only one the only option available, they they would they would, ultimately use one. And so, you know, half half the population, this is applicable for and they'd have the confidence to to get in, and the other half has concerns.

And, you know, at least today is saying they would never consider consider using one. Obviously, as we've seen from the trend on the prior page, you know, our view is over time, consumers will become more and more accepting as they as they start to see the the products on the road. But but it is an important, point as we think about the, you know, the the robotaxi division or or potentially where we could go that that there is this half of consumers pretty universally across the countries in the study. I think Spain is the one that that, you know, is markedly lower, who is, you know, who who has concerns and have and, reticent. So the barriers to autonomy are not purely technological and regulatory. They're also in the consumer and and their willingness to to accept. But this this does suggest that there is a an audience and an ability to kind of find, find their early growth.

Couple more, like, I guess, what what is concerning those people at the top? We we looked at that, and, predominantly, it's a safe it's a safety thing. If you kind of really think about what these three things and we gave a range of different options to the consumer. It I'd say all of these fundamentally tie into, safety to some extent. So there's the pure, like, okay. Seventy three percent say it's safety.

Sixty percent say they don't trust the technology. What are they not trusting it to do? I mean, there may be a little bit on the edges that don't want to share their data or to or or for the, you know, the Skynet to know where they're going. But broadly, I think this is this comes down to safe safety as well. And then the the third thing, which is a pretty big drop off as you as you move to to the last piece is is also fundamentally, like, a concern that the technology won't work, and that, therefore, they'll end up stranded or or in the wrong place. And so, again, I think the the the bottom two here, all three of these, you know, effectively, you the only way you can prove this out is through, familiarity, use cases, you know, stories they're hearing from others. And so, you know, the industry is is building that, albeit slowly.

I think in states where, there is interest, if we just take the US number we looked at before on the left hand side, obviously, you know, there are live autonomous vehicle trials in in a number of different states around the US, but commercially, we we've kind of zeroed in on the two Waymo states, as in terms of the the current kind of critical mass. And interestingly, again, if you think about that familiarity being a key barrier, in the states which do see the vehicles driving around, and, again, it's only in, the Bay Area in California, you are seeing sort of less hesitation. You are seeing more comfort.

And so, again, as you kind of think about what what, is happening in the market, there is there is a level of, slowly but surely kind of, knocking knocking through consumer perceptions of around that safety and and, familiarity. And you see you see in San Francisco, that in recent data, and this is late late twenty four, the kind of market share as measured on ride spaces is is actually kind of roughly the same as Lyft at in the twenty twenty second position, as to to Uber in in the Bay Area market. And that's despite and I think that's that's within the the service area that Waymo has within within that market, but but that service area is obviously limited compared to some others.

And you see that in the results of Waymo. So they're they're up to, weekly, you know, weekly rates of a couple hundred thousand, which is, again, across across both of the markets, but but pretty impressive really when you when you think about it.

Just to frame the the barriers, I said that the consumer is is an important barrier that we think will, you know, should temper enthusiasm around or around autonomy. So you've got that fifty percent, forty nine percent of respondents who say they would never use it. Again, we think that will be chipped away. I'd go back to, the the the insights that Dave shared at the beginning. There is still interest in driving. There is still pleasure that comes from being behind the wheel and in control.

And, you know, we we think there is a sizable portion of the US consumer who, you know, may occasionally, if they're visiting a city or something, use a robotaxi, but will still want to own a car and still are stating that. And so, you know, again, we're actually seeing that that percentage increase despite the technology here improving. Outside of those social changes, though, you know, there's a lot to do still.

You know, certainly in terms of continued tech r and d, it's great that you've got limited, you know, limited geographic bounded, successful implementations today, but there's still more to go as you kind of think about, harsh weather, as you think about, hardening against cybersecurity threats, as you think about being able to get into true unbounded, robotaxi service.

There's a lot of capital both in the vehicle and outside the vehicle in terms of infrastructure that's potentially needed here, particularly during this coexisting phase.

And that brings you to regulation where, you know, many states have or or cities have put in place some level of, regulation to allow for for piloting or trial, but there's there's a ton to go as you kind of think about what, you know, what would be needed to make this transition. So we, over time, have a level of optimism as to say that that there will be a role for autonomy, at you know, over the over the course of the, of our lifetimes and, you know, over the course of the next couple of decades. But, a, it will be slow, and, b, it will not be you know, I think I think it's a big leap to say it will be universal.

I think that there'll be we believe a lot of private vehicle ownership continuing to coexist for a long time, a lot of a lot of, vehicles in the fleet where where this is just one extra mode as opposed to anything that kind of truly threatens or or takes away from a lot of the driving that's happening today. And and there will be incremental creep against some of these things, but but, you know, AVs we see as just part of the future as opposed to the the universal future.

I mean, one to eVTOL's thinking about even further out into the future, a key takeaway here is that, you know, although there is some level of familiarity about twenty percent twenty twenty to thirty percent in each of the different markets in terms of even hearing of the term, You know, it is still low, and there is very low consumer awareness if this is anything other than a trial concept or or effectively science fiction.

Obviously, while, you know, while that is true and very, very low, you know, existing trial, there is capital going into the space. There are competitors. There are, you know, they are pushing, and there are certain use cases if you think about, you know, certain journeys and trips, where where actually the solution could be potentially very viable. And you start to see that. We'll get in a couple of slides as to, what is it that potentially could attract people, and that's essentially, you know, where this can drive extra incremental convenience and other things that we'll we'll look through.

Before we get there on page thirty, we just asked you know, we presented the concept, on the construct and said, would you would you consider using it? And you see about forty percent of people who, when presented with the concept, would say they'd at least consider it, and then a higher proportion of the people who indicated prior knowledge. So in other words, the proportion of people who are kind of following along and and arguably the more technophile, sort of engaged with new modes.

I'll take from the left hand side, when you compare this to the robo taxis, this is only ten points lower in terms of that willingness to try. So it does suggest, although, you know, clearly, I would be I was not hesitant at all getting in a way more. I honestly would be a little hesitant getting an Evitol Evitol, but, I I think there there is that underlying, you know, acceptance amongst a material portion of the population across each of these different markets. I'm not quite sure why the French are less up for it than, than the the rest of the markets we studied.

But if you look on the right, this suggests that that early adopter, you know, interest in trial that that is what you've seen in the, over in the case in, you know, in the Bay Area in Phoenix, seems to exist in the eVTOLA's world as well. So I could imagine in a dense urban environment where there's significant use case, which we'll get onto in the next slide, that that there is the consumer willingness to try and improve to others the the safety the safety story here potentially, which brings to the why would you do it.

And we get on this page to, you know, ultimately ultimately, time is the most important thing, and that really covers the left hand too.

So I I get to skip over the traffic. I get to reduce the congestion. I get to get to my meeting quicker. I get to get home quicker. I'm I am more productive on the basis of being able to move around in a way that I just couldn't before.

So that that is the the fundamental value proposition I think attracts the most people.

Decent portion of our our respondents also, keyed in on the the emissions point. Obviously, that this is, you know, relative to to what like, you know, relative to an EV or other other pieces, I I think the emissions story is is lower. But I think in a lot of cases, people are thinking here relative to other air transportation and, you know, short trips on helicopters and other things with, which, obviously, we're told to significantly, you know, emission reduced then. And so it's interest interesting that that kind of environmentalism does play a role, but I I do think that the the crux of this one is comes down to is is there an affordable, solution that that that sort of gives me back in time more than it more than it is costing me?

And then the the reasons why it wouldn't comes down to, safety, affordability, and lack of infrastructure. And, again, I think the the significant concerns about safety need to be proved over time, and, you know, it could be that that, disproved over time as well. We have to be very careful around, any accidents and and, you know, making sure technology is is is sort of triple checked and triple proof. Affordability comes down to the big piece.

Like, people are not going to take it if that time saved is is is not worth it. And and then I think there's just general concerns of, hey. Is there gonna be the infrastructure there? It's not useful if all I'm doing is is, being dropped off at a heliport twenty blocks away in Manhattan.

I I need to be thoughtful around, will it will it truly save me time, and will there be the infrastructure that support it?

So it's a quick well through eVTOLs. You know, I appreciate that that that's one further horizon out as we kinda think about the, the the broad world, but, we thought interesting in this continuum as you move from electrification to, AVs to eVTOLs.

So I'll pause there. I'd I I wanna quickly touch on the topic de jour on on this, tariff day. But, before I go there, I don't know if I saw there was quite an active chat going on there. I don't know if, James, you wanted to flag anything, or we can come back to it, at the end.

We can come back to it at the end.

Okay. Great.

So, yeah, I just as the end, as we think about the things we didn't touch in the survey so just for context, I think James touched on this at the beginning, but this survey was run-in December through very early January of of you know, so a few months ago, it was post election, but it was pre, January twentieth and pre some of the the the the signals we've now had out at the White House and and in in this country.

But we do want to kind of so we don't have too much in terms of consumer insight that says how are people changing behavior because, you know, the world is gonna change again at four o'clock this afternoon.

But what we did want to to kind of lay out was just a, you know, a few thoughts that there there are big macro trends we've talked about, that that you can talk about outside of the consumer mindset, that are clearly gonna impact the the automotive and mobility markets.

Before I talk about them specifically, I I would I would frame all this in saying, I am and we are strong believers that, actually, the consumer is king in this. And and, you know, the the results we shared in the rest of this deck, will be really, really important in playing out where the future goes. Consumers are not going to buy into a a a concept that doesn't work for them, doesn't give them value and and, simplicity, and they're also not going to be, you know, small changes on the margin are not going to radically change the outcome, but they may change the path that that that we used to take there. And so these effects, I think, change a lot of the path and change a lot of what the the next three years potentially could look like. And there's really three, you know, three things somewhat related that that we wanted to to kind of tie on and just flag as we we think are are major movers of of the outcomes here.

So one is we saw earlier that the consumer the consumer interest in environmental vehicles actually slightly increasing even though that that kind of interest in buying an EV was was was a nudge down here in the US.

I think from a policy perspective and from a signaling from, national government, we we clearly see when we look across the countries that we've studied over the years and including the ones we talked about today, but we've done over the years special studies in markets like the Nordics and others. I think the commitment from the top to the transition, to commitment to net zero, and to the the the focus on the environment is a key driver in consumer sentiment around the the need and the interest of this. And, you know, I I don't think it's a controversial statement to say that, that that that message coming from, government here in the US at least is is not is not what it was a year ago, you know, despite having the, the the the leader of the largest EV manufacturer in the US in in the White House.

I think that that's clearly gonna affect some consumers that that without that push, without the incentives, without the, you know, the the kind of investment in infrastructure, you know, pulling back on charging infrastructure, etcetera, that is gonna slow some slow some of the progress against key concerns. You know, at, at the same time, we appreciate that there are you know, innovation is gonna continue. The across the batteries is gonna continue to go down. OEMs around the world are going to be, still making EVs given all of the the commitment that they see in other parts of the world and from some state government. And so we don't think this puts the brakes on the transition or anything we've seen, but it it does change the, change the trajectory. And and the the road has some some wines in it that that maybe they would would have been different in other circumstances.

Talking of wines in the road, I think that the one on the right is the one that's most top of hand today.

So, like, there's a lot of uncertainty.

I'm not gonna predict we're not gonna predict exactly how the next few months will will play out in terms of what sticks, what doesn't, what special exemptions are negotiated and otherwise. But there's no doubt that uncertainty, it makes it hard to make decisions and that the automotive industry and mobility around it, is is subject to probably more of that uncertainty than you see in many other parts of the economy. And so, you know, we obviously keep close tracks on this. I think there's gonna be shifts in everything from the the mix of where where vehicles are manufactured, obviously, as as as over time, people reoptimize their, supply chains and and manufacturing to to to reflect the new economic reality.

But that could result in different models on the forecourt. It could I think we we see a particular risk to lower lower priced vehicles, being being kind of more tariff affected and and, obviously, that consumer being being more, being you know, finding it harder to stretch to a new vehicle. That's gonna have impacts on the price of used vehicles, which we would expect to to sort of readjust and potentially, increase a little bit, not not to the post COVID, supply constrained world, but but to something that that is a little higher than you have today. And then you have to think each OEM and broader auto parts company is is gonna have to be thinking around, okay, how do how do we drive pricing?

What does this what does this mean?

I think, I'll touch in a second on the kind of parts versus vehicle piece, but just as we do work across and I I in addition to leading our automotive practice, they did our pricing practice. And so I spent a lot of time working with clients, particularly in the industry around, you know, how how to think about what to pass on, what not to pass on, how to think about readjusting supply chains, etcetera. And almost all of our clients that, you know, ultimately gonna have to you know, looking at having to pass some of this on to consumers. Now not that doesn't mean a twenty five percent tariff translates to a twenty five percent increase in the cost of every product, because there's there's margin along the way.

There's negotiation. There's changes in, in the process, and, you know, ultimately, the consumer demand curve doesn't change overnight just because tariffs are introduced. So we would expect some increases, and and that to be pretty universal across, you know, irrespective almost of where, you know, where vehicles are manufactured and and what this looks like. So great deal of uncertainty.

The one certainty from from all of the the work that we've been doing over the last few months on this is is that no one knows exactly the answer, and what you need to do is build in a level of flexibility and and have the tools to be able to make decisions quickly and and kind of move forward from that.

In automotive supply chain, particularly, just if we quickly hit thirty five, this is a we appreciate, and I think I think you will know this and hear about this, that there's a lot of complexity incrementally just around the integrated North American supply chain.

You know? Again, this is just one, you know, one example, but, this is real. Like, the parts between tier two, tier three, tier two, tier one suppliers are moving back and forth across borders in North America on every transaction. There's some discussion around what does you know, is there a way to, adjust the tariff to to kind of reflect US content versus not even in a vehicle manufactured in Canada or Mexico? But, I I think there's a lot of complexity in implementing this. There's a lot of questions around this that the market has.

I think of of all industries that that we work in, this is this is one of the the the the most challenging and difficult.

And so I I think the, you know, I think we all recognize, and and I think we just have to, as as participants in the industry or everyone on this call, kind of understand the you know, we're going through a time of of great change in noise and to have a little patience around it and to and to make sure that we're kind of flagging any any friction, to to try to, you know, potentially influence government, but certainly work work the right way to to ultimately deliver to the end consumer, the value proposition that they they need to get around because this is such a critical critical thing for the, for the economy that that, transportation and and movement works.

So maybe if we flip to thirty six, and I'll just I'll just end, on this. The the third thing we we hadn't kinda talked about, and I think it's this is not US only, but as you kind of think about a lot of the barriers that we talked about around DBs and as you think about some of the other solutions to congestion and other pieces, you you, you know, you need charging infrastructure. You need, needs to be able to reinvest back in the roads even if, taxes on fuel are are going down with with high fuel efficiency and move to EVs.

Public transport is not relevant in every every market around the US. We, you know, appreciate that, but within large urban environments, it's you know, it it absolutely plays a role for some consumers and and and for access. And so, you know, different state governments around the US, the federal government's commitment to, transportation infrastructure, and then, again, in some of the other global markets, just the the ability to, be able to spend on everything, in, you know, the times challenged challenged economies and particularly with any potential turmoil coming out of the top right, is is just, you know, has a risk of acting as a as a barrier on, on growth in some of the things we looked at. Again, I'll step back and end more optimistically.

The, the the consumer is is who matters, and I think all the trends we've seen here play out to a a future that we'll continue to see evolution and change in the mobility landscape. And we have to think of these things as, you know, bumps along the way as opposed to dead ends. And I I I have great optimism in the industry's ability to adapt and and move through, any any of the the obstacles that get thrown at it.

James, do you wanna bring us home?

Mhmm. Yeah.

I'm gonna I'm gonna ask some, got some q and a questions that, we've got here and that we've seen come through. So the first one is, given what we're seeing around tariffs, given the the, I guess, fear and given, you know, what opportunities particular opportunities would you see for companies to to jump on or to act right now in?

Yeah. I mean, I I can start. It's a, obviously, a broad broad question depending on where you are in the ecosystem. And but but, I think taking taking a view to to some of the things we've tied on, I I think specifically, I was at a aftermarket parts conference a couple of weeks ago and asked the room, which was made up of regional warehouse distributors, of parts that are serving the service market, you know, how many people had programs and strategies around the around EVs, around around ADAS parts, etcetera.

And it's still actually only a fraction that we're kind of systemically thinking about this. And I I do think there is while while only two percent of the fleet are are EVs at this point, I think you are getting to the point where they're aging into needing having maintenance needs, service needs. And I do think there's an opportunity, for the industry to be thoughtful around that as you think about, differentiating, an offering and, driving, whether it's a distributor with the right the right kind of kitting and parts, whether it's education and training of of the industry, whether it's, you know, an a certification and and training of of, people.

So so I I see nuggets of opportunity in what we've done here. I think some of the infrastructure spend that we've, that we've alluded to in terms of what's needed for autonomous vehicles and and electric vehicles, you know, if the government is playing less of a role, business models will have to emerge to drive this because the consumer demand is there. And as you think about where where dollars are spent, I I think there's a there's a there's large thoughtful place that can be made across infrastructure, in the in the piece. And then finally, to hit the tariff question specifically, you know, I say I'm skeptical that this is gonna drive a wholesale complete disintegration of the global economy, but I in terms of the integration of the global economy, but I I do think it's inevitable that you're gonna see more investment over the next, the rest of this presidential term into reonsuring and US manufacturing.

A lot of that is gonna be, you know, new CapEx around, automated plants and stuff. There isn't there isn't the labor to do things in the US the way that they may be done in Mexico, for example. And so that creates opportunity for technology firms around the space and and for other others in the supply chain, you know, to be to be thinking about a new and better way to do things. And, I I yeah.

There's always silver linings of things. Right? But I I I do think that I mean, that's what, fundamentally, I think tariffs are trying to target. I I think they're overly optimistic in how much of that it'll be, but there will be there will be some of it, and that that definitely creates opportunity.

Next question.

To what degree has European policy shifted away from a focus on BEVs and towards a near term focus on hybrids?

Where do you see the policy in EMEA shaking out long term, and how will there the impact near term investment by OEMs?

We did discuss this a little bit in the European webinar, but, Matt or Rob, do you have any thoughts of of what's happening, or what have you heard from your European colleagues?

Yeah.

Despite my accent, I hate to spend most of my time thinking about the the the US market and North American market.

I do think the, I I'm not sure I characterize it as just the European thing. I if I go back to five or six years ago, there was there was a large portion of people in the industry in both Europe and here in the US that that really, you know, felt that the the future was BED and that, hybrid and plug in hybrid was was, to some extent, a a temporary stopgap in that journey. And and, you know, I think that was aligned with, sort of the the success that that Tesla was having in growing the the market and the fact that you've now got the models that were within sites of affordable and had long range and and covered, you know, nine ninety eight percent of journeys or ninety nine percent of journeys, and you say, well, what's where where's the value in, in hybrid as as anything other than a dead end?

I think that that has been clearly disproven as over time in in in multiple markets, whether there is clearly a role for hybrid in satisfying consumer demand. I mean, if you if you go back to the survey question we had around what what are the concerns around BEVs in every market, Once you get past costs, you know, fundamentally, that charging anxiety, whether it's expressed as range or expressed as, in charging infrastructure, is the real barrier here. And hybrids offer a solution to that. They offer a potentially lower lower entry price point.

And and I think they're a pretty compelling part of the stack of the portfolio of what's gonna exist for the next few decades, maybe in the the very long term, you know, through a combination of regulation and and improvement in, EV technology that they do they do end up dead ending, but but I I think it's from a regulatory and industry perspective, they're reacting to the, again, to the consumer who's king, which is and they're saying that there is a there's a strong use case for, hybrid and plug in hybrid in my needs hierarchy. And there's a lot of consumers for whom that's the best solution, and and the industry has to meet that need.

I'm gonna add that, certainly, in Europe, take rates for EVs do tend to be a bit higher and do tend to, you know, grow a bit, faster. So, you know, I think they're a little bit further down the adoption curve than than we are. But, you know, really, to meet the the emissions requirements in Europe, you must be electrified in some way and a big chunk of that to be, BV, not just hybrid. So, you know, that's what I'm seeing.

So Oh, that's definitely okay.

Sorry. Sorry. Go ahead, James.

Yeah. Yeah. Yeah. Just going up to the next question.

A lot of recent press, highlights that drivers don't wanna drive EVs. How does this reconcile with your survey resulted, from increased interest? Dave, do you have any thoughts on that?

Yeah. I I think there's an interest in EVs, just not the EVs that maybe exist today. Obviously, Tesla has some baggage now associated with it, which is is probably tamping that down. I think it was, Matt who mentioned the affordability issue. And so, you know, to paint a broad brush of people don't want EVs is, I think, not accurate.

I think it's what EVs are out there as well as, where you live. Obviously, it's easier to own a EV if you live in Southern California where there's a lot of infrastructure, and then it is here in Arkansas where the infrastructure just is not that great.

So I think the the the idea of an EV in an optimal circumstances is very appealing because you can charge it at home. But I think, you know, it just depends where you live and, what's available. So I think that's that's sort of what's going on with the with the, you know, that that increase in interest.

Yeah. And that might I might add to that. So we do work outside of the survey. We have our own battery electric vehicle forecast, and part of that's looking at it from the consumer mindset, and we really think of the market as kind of three primary mindsets.

You've got your environmental enthusiast, you know, for lack of a better term, you've got your your ice or gear heads, and then you've got neutral. And neutral is really like, I would drive an EV as long as my vehicle needs are being met. And I think and from our work, that's where the majority of the population falls. And, Dave, to your point, your needs can vary based on where you are, where you sit from a, you know, economic standpoint.

Can I afford the vehicle? How often am I taking different trips? So I think the interest very much varies, by by individual. Most people, you know, if if their needs are being met and that's at an affordable price point, would be open to it.

And I, you know, I think that just is is, reinforcing of some of the points that you made, Dave.

Okay. Good. Next question.

What about replacements for gas taxes for EVs?

How should that be rolled out? Is it should it be usage? What about hybrids who perhaps use half the fuel as an ICE? Should they be should they have a separate tax as well as gas tax?

Any thoughts around that? You know, this was quite a discussion that we had on the Europe one.

Matt, do you got any any more thoughts on this?

You're stretching into areas I don't haven't really thought about too too much. I might defer to others.

I I always thought that usage tax is a is a good idea, and maybe it would be, you know, sort of scoped back to the environmental impact of the vehicle itself. You know what I mean?

Because like I said, here in Arkansas, most of the fuel most of the energy comes from non renewable resources, sources. In Canada, almost all hydro. Right? So, it would be cool to have a public policy which reflects and encourages people to, choose environmentally responsible modes of transportation, including reducing your actual, footprint, and that is walking or biking. That'd be cool too. So that that would be my thought is to move to more of a use base and, environmental impact model to generate that that revenue that we need for roads and infrastructure.

Yeah. I mean, I I I agree with the the desire. I do think I mean, the the fiscal reality is that there's a lot of infrastructure and backlog on that infrastructure and dollars are, you know, are not there today. And so the the need to find a way to fund that is is critical to on the, you know, underlying competitive, positioning of the country and and ability to to kind of invest and grow. And, you know, I I think gas tax is effectively set up as a usage tax in the sense that it's, you know, it's tied to volume, which is tied to usage. But What has affected that most over the years is so far is less EVs and more just, cafe standards and and higher vehicle efficiency, and that has kind of gone up and has already been a a big headwind on, on gas tax revenues over over the years. And so I think translating and transitioning to something that is usage based feels the fairest.

But, you know, it's gonna be a pretty, I think, a pretty painful, transition for for the government that has the comp you know, the the confidence to do it. Presumably, we'll start at the state level in the US here and and move up, but it's it's gonna be something that well, it has to happen.

I I don't relish the person in the person's job he has to make it happen.

Thanks. We're gonna, I'm gonna, do one more question. This one's a little bit of a a bit of a maybe not we'll see if if you guys have got some thoughts on this. But, what we're seeing is is, Tesla, that on the AV side, they've been going more towards camera only type basis and using, you know, their their recordings of, their FSD, for their AV systems.

While China, who's coming up very, very quickly and using the BYD's using this new God's eye, they have all gone towards, lidar and, using that in a combination with radar and camera. Any thoughts? Any any technical thoughts on this? Or what are you seeing?

Or Yeah. Any any stabs?

I will reach back into my alleged quenching background here, James. But I I think, the I believe that a lidar based system is fundamentally superior. That, again, as we saw earlier, the biggest concern around AVs is is safety.

And it doesn't take many accidents in a bad weather condition or whatever it is to be able to, to be able to undermine that confidence and that safety. And so I think any redundant systems and the ability to kind of add add further, confidence in that safety, it will ultimately be critical. Obviously, I I, you know, give a lot of credit to the Tesla engineers and what they've been able to do with camera based systems. It it's very impressive.

But, again, it it it's it's that ninety nine point ninth to a hundred percentage point that that is the thing that makes the difference.

I think if you the reason Tesla does that is to drive its bill of materials down and to to make sure that that they can have an affordable system. The thing that is gonna change over time, do you make a point around the Chinese, companies using it? But I think just more broadly, one tourism in what in the world is that technology gets cheaper. You could call it Moore's Law or go back to whatever. I I I think that as production volume goes up, that is gonna bring down the the cost of, lighter components and and other potentially alternative technologies as you think about bit vehicle to vehicle communications, etcetera.

And I think, ultimately, the I I think in order for wide scale adoption of robotaxis and other things, you're gonna be in a world of multiple redundant systems, and and the way you make it affordable is that it'll be produced in volumes enough that that the tech will be tech will will actually not compromise the cost of the vehicle. We've gotta get through that transition now. And if some of that's happening in China, I think, yeah, it's all the better for mankind in the end, although maybe we'd prefer it if we were driving.

Maybe.

Well, I think it's, time to unless, Matt or Dave got any any technical comments on that.

But no. I think it's time, we wrapped up. We've got one minute to go. So I'm gonna use that minute to, firstly, thank, Matt, Rob, and Dave very much for, helping us out, you know, getting being involved and, doing being part of this webinar today. And I also wanna thank the audience very much for coming along.

We had a great time, putting this together, and, hopefully, you've got a lot out of it. And if you've got any more questions besides the ones in the q and a, don't hesitate to get in contact with any of us, and and we can get the data that you need. So just one thing too, this webinar has been recorded. And as soon as we get off, it's gonna appear in your inbox. So you can go back and and refer to it later. So, I just wanna thank everyone again, and, we'll we'll see you all later. And thanks for coming.

Thanks, Mara.