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Digital Auto Report 2023 (volume 2)

Assessing global mobility market dynamics

Viewpoint

The digital transformation in the mobility industry is in full swing and offers multiple opportunities for all players. The eleventh annual Digital Auto Report is a global consumer survey with a focus on the U.S., EU and China. It consists of a quantitative market outlook until 2035 based on regional structural research and interviews with key industry executives at OEMs and suppliers, leading academics and industry analysts.

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Value creation in the automotive industry

Digital transformation is characterized by several key trends and shifts that demand attention and strategic flexibility of mobility players:

While Chinese OEMs are asserting their dominance domestically and gain traction in Europe, regulation in major markets on sustainability (CBAM), high tech (Chips Act), transparency (Digital Product Passport) or privacy (GDPR) will likely force players to localize in USA, Europe and China.

Car imports into Europe

Balancing digital vehicle experience and customer satisfaction with the respective costs for the digital technologies remains key. OEMs should source tech capabilities and should focus on their experience differentiators and source tech capabilities (e.g. machine learning, operating systems or cloud storage) via ecosystem partnerships.

1. Not only commands, but actual conversations
Not only commands, but actual conversations

Implementation of ChatGPT technology in car voice interfaces

2. The physical is acquiring digital flexibility
The physical is acquiring digital flexibility

Smart materials allow physical surfaces to understand and react

3. The touchscreen is taking over the dashboard
The touchscreen is taking over the dashboard

Car dashboards are becoming ultra-wide entertainment systems

4. Guidance right
where you need it
Guidance right where you need it

Augmented reality is becoming mature, and advanced

A diverse range of players are trying to develop software and solutions to capitalize on the digital opportunities in e-Mobility. Ample opportunities emerge around battery and charging value chains – OEMs should orchestrate their own platforms for partners to integrate and realize new service offerings. For suppliers, this is an opportunity to increase their share of service-based, recurring revenues.

~$8bn+

digital e-Mobility Europe opportunity in 2030

Battery ID and related services
Battery ID and related services

Digital ID for batteries containing data about performance and manufacturing history, increasing transparency across the battery value chain.

Smart charging equipment
Smart charging equipment

Smart charging hardware equipment to optimize the charging process and interact with the electric grid, user preferences, and other external factors.

Charge point access software
Charge point access software

Software platforms and mobile apps that facilitate the interaction between EV owners and the charging infrastructure.

Charge point management software
Charge point management software

Software platforms designed to manage, operate and optimize charging networks, as well as enhancing the efficiency of charging services.

AD is gradually moving beyond experimental stages towards commercial viability in private and shared vehicles. Adoption of highly automated driving (L4/5) more conservative than in previous forecasts with 7% of new vehicle sales in EU and 9% in the US; Chinese expectations much more optimistic, driven by very ambitious government plans (36% in 2035).

Robotaxi
Robotaxi

Taxi services, last mile mobility.

Robo shuttle
Robo shuttle

Shared transport of people on a defined route or demand service shuttle service in defined areas

Tele-operated vehicles
Tele-operated vehicles

Concierge service for car sharing vehicles

Learnings from first hype wave

Learnings from first wave of hype show that mobility players need to focus on asset utilization instead of differentiation:

  • Only play games you can win – Leave countries with limited success and divest non-strategic business units
  • Increase user loyalty – Consider “Amazon Prime“-like memberships and AI-enabled customer care
  • Use assets wisely – Strategic use of own assets vs. partner integration in the light of increased capital costs and integration of public transport

First players becoming profitable demonstrates feasibility of those business models when rigorously focusing on utilization. Here are three emerging dominant ways to play:

  • Local MaaS platforms – Offering of technology solutions that enable businesses, cities, and transportation providers to develop own branded mobility applications/ service
  • Integrated "super"-apps – Consolidation of the most prominent local shared mobility providers in a few apps
  • Global aggregator – Combination/ comparison of shared mobility offerings from several providers, allowing users to seamlessly find, unlock and pay

Expected adoption of connected, electric, automated and smart mobility

Connected

Vehicle connectivity is becoming increasingly important and is playing a substantial role in remaining competitive among other OEMs. A greater share of C2-C3 connectivity is forecasted for the US and China, on account of more advanced software and automated driving features.

Total vehicle parc and connected car share (in million units, %)

Europe
2025
352
%
%
2030
359
%
%
%
2035
366
%
%
%
United States
2025
300
%
%
%
2030
323
%
%
%
2035
359
%
%
%
China
2025
364
%
%
%
2030
387
%
%
%
2035
418
%
%
%
%
Non-Connected
C1
C2
C3

Electric

Electric vehicle penetration in key regions is expected to continue its growth momentum through the next decade. BEVs will remain the most popular type of alternative powertrain on account of regulatory incentives, OEM investments and new product offerings.

New vehicle sales by powertrain (in million units scaled to 100%)

Europe
2025
15.4
%
%
%
2030
15.4
%
%
2035
15.8
%
United States
2025
16.5
%
%
2030
16.1
%
%
2035
17.1
%
%
China
2025
28.9
%
%
2030
30.7
%
%
2035
33.1
%
%
ICE (incl. HEV)
PHEV
BEV
FCEV

Automated

Automated vehicles need to overcome various technological and legal hurdles to get road ready. Moreover, consumers are still skeptical about the novel technology. However, AD is slowly moving from trial to commercial. High AD adoption expected in China, with significant policy support and 5G coverage.

New vehicle sales by SAE level (in million units scaled to 100%)

Europe
2025
15.4
%
2030
15.4
%
2035
15.8
%
%
United States
2025
16.5
%
2030
16.1
%
2035
17.1
%
%
China
2025
28.9
%
%
2030
30.7
%
%
%
2035
33.1
%
%
%
L0-2
L3
L4-5

Smart mobility

Mobility modes have been diversifying since the Covid pandemic, when digital services and innovative ways to travel were in high demand. Today, MaaS and VaaS are ever more popular, especially for urban transport. Nevertheless, long-distance travel will continue to depend on private cars.

Distance travelled by mobility mode (in billion person-kilometer travelled per day scaled to %)

Germany
2025
3.1
%
%
2030
3.1
%
%
2035
2.8
%
%
United States
2025
18.8
%
2030
20.2
%
2035
21.6
%
China
2025
16.4
59%
%
2030
17.8
%
%
2035
20.7
%
%
Public transport
Mobility-as-a-Service
Vehicles-as-a-Service
Private vehicle
Mirco (walk)
Micro (bike)

Recommendations for mobility value creation

There are very specific strategic priorities for each mobility stakeholder group to stay competitive in the future.

  Automotive
OEMs		 Automotive
suppliers		 Mobility service
providers
  Automotive OEMs Automotive suppliers Mobility service providers
Customer experience and activation Own the digital experience Provide modular platforms Increase loyalty and asset utilization
Opportunity and value creation Orchestrate e-Mobility & AD services Become AD enabler at the right time Prepare for the AD era
Partnering and tech capabilities Bridge technology capability gaps Enable ecosystem as integrator Collaborate for MaaS success

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Digital Auto Report 2023 (volume 2)

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Jörg Krings

Jörg Krings

Partner, Strategy& Germany

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Dr. Andreas Gissler

Dr. Andreas Gissler

Partner, Strategy& Middle East

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Jonas Seyfferth

Jonas Seyfferth

Director, Strategy& Germany

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Dr. Jörn Neuhausen

Dr. Jörn Neuhausen

Director, Strategy& Germany

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Hartmut Güthner

Hartmut Güthner

Director, Strategy& Germany

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Thilo Bühnen

Thilo Bühnen

Director, Strategy& Switzerland

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