In this short video, automotive industry expert Cristóbal Colón outlines the likely realities of motoring in the future.
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In this short video, automotive industry expert Cristóbal Colón outlines the likely realities of motoring in the future.
Host:
Hello and welcome to L.E.K. Look Forward into 2024.
L.E.K. Consulting’s annual analysis of the challenges and opportunities in the year ahead. In this short video, automotive industry expert and partner at L.E.K.; Cristóbal Colón outlines the likely realities of motoring in the future.
Cristóbal Colón:
Many consumers have looked forward to electric vehicle ownership, but the combination of insufficient public charging networks, limited subsidies and restrictive regulations make EVs a viable choice for higher-income populations only. A likely outcome of medium- and low-income households struggling to afford EVs will be a switch to no-ownership mobility options such as vehicle renting and car clubs. There is a very real risk that portions of the population will be cut off from mobility — with many Original equipment Manufacturers, or OEMs, contributing to the issue as they progressively abandon high-volume, lower-cost models to focus on the premium market.
However, Chinese OEMs are bucking this trend, with a European penetration strategy focused on lower price points. With prices significantly lower than those of European OEMs, a logical conclusion would be that Chinese OEMs will soon lead in the European market, setting European manufacturers on a destructive path and changing the market dramatically.
Given the challenges faced by Battery Electric Cars, or BEVs, alternative solutions such as hydrogen and net-zero biofuels may offer an alternative road to reach important emission reduction objectives. A mix of three technologies is likely to represent the best solution for the future:
The first is that BEVs will be for urban passengers but not for long-distance or heavy payloads
The second will see fuel cell EVs being used for short-distance heavy payloads, such as public transport
That leaves long journeys fuelled by biofuels a likely scenario as our third solution
As traditional industry names adapt to the growing challenges or withdraw from segments and markets, new opportunities are created. We expect to see new OEMs emerging with exciting new products and offerings that help improve infrastructure and reduce the costs of mobility across Europe. Chinese OEMs are set to lead the market in low and medium-price segments, leaving high-end luxury markets for those European OEMs prepared to adapt and evolve.