| The failures of some legacy OEMs to master even just one element (Zero Emissions) of the mobility revolution – a shift in the supply chain due to electrification – have in the past month seen the CEO of Stellantis fired, BMW profits plunge, Europe’s battery plant go insolvent, and the strategy and leadership of VW get shaky. Striking workers rightly chastise leadership for lack of foresight, and frankly, greed. Most legacy OEMs have paid excessive dividends to shareholders instead of investing in their future (see our posts about this Vicious Cycle, here, and here). In spite of this, shareholders are leaving in droves: the combined market caps of the legacy OEMs has fallen by over a third in the last six months. Most legacy OEMs’ share prices are lower today than in 2017 – the year the world hit “Peak Car”.That’s right: the automotive industry doesn’t sell any more cars today than it did in 2017 – globally. Some disguise the industry shrinkage by speaking only of a mythical “premium segment” – which is “growing” only because it has more companies that claim to be premium. Some research institutes (inexplicably) still project overall growth in automotive – but I’m sure there were those who also projected growth in the production of CRT television-sets, even after Plasma and LCD screens from Asia became a standard. (TVs: Another industry that is shrinking, by the way). Globally there is too much production capacity in automotive, so something has to give, and 2025 will be fairly brutal to OEMs.
None of this should come as a surprise to anyone in the auto-mobility industry – least of all, anyone who read my first book, “The Mobility Revolution” which was released a full decade ago now, in December 2014 (See page 127, where I suggested a flatlining in automotive by 2020, or p. 144, where I noted that China will ”capture at least 35% market-share in 2030”.)
The other two elements – autonomous and shared mobility (Zero Crashes, and Zero Ownership) – are also seeing completely new actors capturing enormous value. We’ve written extensively on the value-chain, but here’s our thoughts on the potential scale of autonomous mobility – which is currently being captured by Waymo, Uber, Amazon (Zoox), WeRide, and Baidu. For 2025, we are curating the content of a European Summit on autonomous vehicles (AVs) – in partnership with Autonomy.
Automotive production and innovation is coming from Chinese brands (even if not all production will be in China). The provision of mobility services, however, will always be local, just as the transformation of urban areas is extremely local. It’s one of the reasons why Neckermann Strategic Advisors has co-founded the Urban Places Lab; we already have two “Clusters” with projects – in Berlin and Basel. It would be wonderful to work with you on your own transformation projects.
I also hope to see some of you during my annual trip to CES (see reports from 2023, and 2024), where I have had the pleasure of judging the Innovation Awards.
The impact of the mobility revolution continues in other fields as well: insurance, logistics, leasing and financial services, real-estate, air transport, and so many more industries are impacted. There is so much more to do, so much to discuss… but also a lot to celebrate. The investment landscape environment is becoming sunnier, and the startups we are advising are more innovative and optimistic than ever.
P.S.: I’ve left Twitter (a platform that has abandoned proper governance and ethics), and joined Bluesky (find me at @neckermann.net). I tend to post “random” thoughts – on mobility, smart cities, politics, society, and even music there, but am also regularly posting a few projections for mobility in 2035 – part of a separate project. |
