The automotive revenue base is expected to expand drastically; between 2015 and 2030 it is projected to expand by 100% and grow to over $6 trillion. Research by McKinsey points out that most of this growth will not come from vehicle sales, but will be a result of new business models, such as shared mobility and services built around data and insights. The big question on everyone’s mind is whether shared mobility revenue will overtake that of vehicle sales. By 2020, it is estimated that one in 10 cars will be used for shared mobility. So, automakers ponder the role they can play in this change, and how they can stay relevant.
Currently, there are several regulatory hurdles slowing down the adoption of innovations, such as self-driving cars, for instance. While traditional players can use the cushion of regulation to buy more time, this may not necessarily be wise. There is the very real risk of lagging behind in advancements and getting commercially overtaken
We have traditionally seen electric vehicles receiving an encouraging response from critics but not from consumers; adoption is still slow. However, Tesla and Faraday Future could excite consumers to wait in long queues to pre-order vehicles. Will vehicles like these eventually turn category killers? There is an imminent price drop but what factors will drive further adoption?
Another concern is that traditional adversarial roles are changing, and competitors are turning into collaborators. In this evolving scheme of things, automotive executives are having to rethink their role.
All these market dynamics are the basis for any disruption that might take place.