Digital Auto Report 2023
How fast will the mobility
ecosystem really transform?
VOLUME 2
Volume 1 (April 2023)
Digital Auto Report
2023 – Volume 2
✔ Eleventh annual Digital Auto Report,
developed by Strategy& and PwC
✔ Global consumer survey with a focus
Understanding consumer
preferences and implications
• Consumer view – changing mobility preferences
• Implications for auto players – interface, subscription and charging
This report: Volume 2
Assessing global mobility market
dynamics
on the US, EU and China (n = 3,000)
✔ Quantitative market outlook up to 2035,
based on regional structural analysis
✔ Interviews with industry executives at
OEMs and suppliers, and with leading
academics and industry analysts
Digital Auto Report 2023 Volume 2
Strategy&
Source: Strategy&
• Trends – user experience, e-mobility, automated driving and smart mobility
• Market outlook – penetration of technologies and mobility types
• Economic opportunity – selected value pools in AD, EV and Smart Mobility
2
Future value creation in automotive depends on anticipating
and prioritizing several technology trends
New
value
Adoption
2025-35
Digital
Trends
Executive summary – Volume 2
Digital transformation is characterized by several key trends that demand CEO attention:
• Geo-political powershifts: Chinese OEMs are asserting their dominance domestically and making inroads into the European market. Regulation in major markets
e.g. on sustainability (CBAM), high tech (Chips Act), or privacy (GDPR) will likely force players to localize further in three regions (US, EU, CN)
• Digital user experience: Balancing digital vehicle experience and customer satisfaction with the respective costs for the digital technologies remains key.
OEMs should source tech capabilities via ecosystem partnerships, but need to avoid long-term dependencies
• Digital 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.
• Automated driving: AD is gradually moving beyond experimental stages towards commercial viability in private and shared vehicles. Strong cost reduction is
expected for L3/L4 AD technologies once scale-up kicks in
• Smart mobility services: First players becoming profitable demonstrates feasibility of those business models when rigorously focusing on asset utilization
• Total vehicle parc 2035 seen in Europe at 366m vehicles (vs. 352m in ’25), in the US at 359m (vs. 300m in ’25) and in China at 418m (vs. 364 in ’25)
• All regions expected with similar strong increase of advanced vehicle connectivity – China at 94%, US at 93% and Europe at 81% by 2035
• BEV penetration in 2035 expected highest in Europe (96% of new vehicle sales), followed by China (81%) and the US (only 58%)
– differences mainly due to different regulatory incentive schemes and industry structure (combustion engine industry in EU/US vs. EV industry in China)
• 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 ‘35)
• Mobility modes shift very slowly considering the overall mix – MaaS (e.g. taxi, hailing, robo-taxi) and VaaS (e.g. sharing, rental, subscription) are getting more
popular, but are still only a fraction of total kilometers travelled (4% in GER, 3% in US, 5% in CN by ’35); private vehicles will remain the main mode in such a scenario
For innovative market players, considerable revenue opportunities arise from these trends and market outlook, i.e.:
• Digital e-Mobility value pools: $8bn (Europe | 2030) for selected software and hardware solutions
• Electric Vehicle value pools: $760bn (Global | 2030) for EV powertrain & battery
• Automated driving value pools: $81bn (EU, US, CN | 2035) for ADAS features value contribution to total vehicle sales
• MaaS and VaaS value pools: $264bn (GER, US, CN | 2035) for combined MaaS and VaaS market
Digital Auto Report 2023 Volume 2
Strategy&
OEM = Original Equipment Manufacturer CBAM = Carbon Border Adjustment Mechanism GDPR = General Data Protection Regulation AD = Automated Driving
MaaS = Mobility-as-a-Service VaaS = Vehicle-as-a-Service (B)EV = (Battery) Electric Vehicle ADAS = Advanced Driver Assistance System
Note: Please refer to respective section for detailed assumptions and sources behind stated propositions Source: Strategy&
3
The digital transformation in the mobility industry is in full
swing – multiple opportunities emerge for all players
Digital trends in mobility
Geo-political powershifts
Digital user experience
Digital in e-Mobility
Automated driving
Smart mobility services
Chinese OEMs moved up to
No. 1 car importer in Europe
– vs. No. 8 in 2017
76% of auto leaders consider
new collaboration models as
key for winning vehicle OS
$ ~8bn for digital e-Mobility
opportunity by 2030
expected
OEM revenues allocated to
ADAS parts expected to
reach $79bn by 2035
First global mobility
operators profitable in 2023
(i.e. UBER, LIME)
• New entrants emerge with
focus on Digital and BEV
• Digital experience is now
crucial brand differentiator
• AD is moving from trial to
commercial modes
• Geopolitical uncertainties
force global OEMs and
suppliers into de-risking
• Truly intelligent assistants,
smart materials, and ultrawide screens picking up
• Rise of e-mobility drives
demand for digital services
and infrastructure
provisioning
• Smart mobility incl. micro,
sharing, hailing, rental,
on-demand, subscriptions
• Governments protect home
markets via ESG regulation
(e.g. CBAM)
• Value creation beyond core
product differentiation still to
be proven
• Software opportunities
around battery, charging
equipment, charge point
access, and energy mgmt.
• Waymo and Cruise with first
licenses in San Francisco
• Multi-stakeholder platforms
and standards just emerging
Localized digital strategy for
US, EU and China needed
Digital Auto Report 2023 Volume 2
Strategy&
Invest in partnerships to
bridge lack of tech scale
Consider access to digital
e-mobility innovation via startups
• Mercedes with first hands-off
autobahn pilot (L3)
• But AD regulation evolving
very differently across
regions
With maturing AD tech, right
go-to-market timing critical
OEM = Original Equipment Manufacturer CBAM = Carbon Border Adjustment Mechanism AD = Automated Driving
EGS = Environmental, Social and corporate Governance OS = Operating System
Source: Strategy&
• Adoption driven by
integrated, multi-modal
platforms with public
transport, AD will be a boost
• First players profitable, but
only with revised city focus
Integrate own mobility offers
into other platforms for scale
4
The global powerplay is changing – while Chinese OEMs win at
home and gain traction in EU, regulation tightens everywhere
Changing global powershifts – example Chinese OEMs
Car imports into Europe
Car sales in China
Passenger car imports in the EU by top 8 countries of origin in 2022
(country ranking  vs. 2017)
8
522k
China
Turkey
452k
→0
United Kingdom
441k
2
South Korea
411k
Japan
391k
United States
Mexico
2
2022
50%
Domestic (Chinese)
2
20%
37%
20%
31%
German
Others
2
EU regulatory challenges for non-EU OEMs
35%
44%
1
266k
181k
2017
→0
329k
Morocco
Passenger car sales in China by brand origin
(2017 vs. 2022)
In 2022, 35% of passenger cars sold in the EU were imported.
EU regulations to slow down import quotas are expected
(e.g., Carbon Border Adjustment Mechanism, Digital Product
Passports, Data Privacy)
Competitive disadvantages of Western OEMs in China
Weaker
authoritative
support
Harder-to-grasp local
preference (e.g.,
selfie function in car)
Intermediate
access to local
resources
With the rise of Chinese OEMs, the global powerplay is changing once again. 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 three regions (US, EU, CN).
Digital Auto Report 2023 Volume 2
Strategy&
OEM = Original Equipment Manufacturer CBAM = Carbon Border Adjustment Mechanism GDPR = General Data Protection Regulation AD = Automated Driving
Source: PwC Autofacts analysis, ACEA, EUROSTAT, CAAM; Strategy&
5
Vehicle user experience is becoming more personal and
interactive – but some innovations result in higher complexity
Digital user experience – trends and challenges
Challenges
1
Not only commands, but actual conversations
Implementation of ChatGPT technology in car voice interfaces
2
3
4
The physical is acquiring digital flexibility
Smart materials allow physical surfaces to understand and react
The touchscreen is taking over the dashboard
Car dashboards are becoming ultra-wide entertainment systems
Guidance right where you need it
Augmented reality is becoming mature, and advanced
• Safety: A more immersive interaction with the voice assistant could
compromise the driver’s concentration
• Data Privacy: Handling of personal data should be dealt with care, due to
user trust and cyber security risks
• Customer value: This nascent tech still needs convincing use cases
to justify its cost to customers beyond novelty and differentiation
• Usability: Surface-embedded smart controls require special design attention
to ensure that users can locate and operate the interface
• Safety: In order to minimize the risks of driver distraction as touchscreens
grow in size and functionality, design for usability increases in importance
• Energy efficiency: Bigger and more powerful infotainment system also
requires more electricity, affecting the car range in EVs especially
• Safety: Cluttered and poor design of AR interface could distract drivers from
the road ahead; application might remain limited to passengers
• Cost: AR technology in cars is still significantly more expensive than
traditional displays
Vehicle experience increasingly depends on digital technologies that only work at scale. OEMs must be laser focused on their experience
differentiators and source tech capabilities (e.g. machine learning, operating systems or cloud storage) via ecosystem partnerships.
Digital Auto Report 2023 Volume 2
Strategy&
OEM = Original Equipment Manufacturer
Source: Strategy& analysis
7
As OEMs go digital, their tech partner portfolio must balance
fast go-to-market benefits with long-term dependencies
Examples of OEM and technology player partnerships
Front-end enablers
GM
Toyota
Android
(platform usage of Android Auto from 2024)
BMW
Arene OS
(Toyota-owned multimedia system since 2021)
(Toyota-owned real-time software platform)
Android (future usage of Android Auto &
vw.OS (VW-owned OS platform)
Blackberry QNX (supply of safety-certified
Thundersoft (collab. for Chinese market)
Harman (supply of open ecosystem for Apps)
embedded software integrated in vw.OS)
Compute Platform
Qualcomm (strategic collaboration on digital
cockpits, telematics systems and ADAS)
Oracle (offboard - strategic collaboration on
high performance workloads)
No partner for onboard announced
Qualcomm
(strategic collaboration with focus on automated
driving functions up to L4)
Vector (supply of automotive ethernet)
Android (platform usage for infotainment,
Qualcomm (strategic collaboration with focus
Android
App store designed for BMW)
on automated driving functions)
(platform usage of Android Auto in BMW OS8)
QNX/ Blackberry (supply of safety-certified
Intel/ Mobileye (strategic collaboration for
embedded software)
autonomous driving platform)
MB.OS (announced Mercedes-owned OS
Unity
Mercedes (strategic partnership to enable infotainment
applications on new MB.OS)
Android (strategic collaboration on SDV
Renault
Ultifi (GM-owned software platform),
Redhat (strategic collaboration on SDVs)
Lexus
Google Apps)
VW
Operating System (OS)
offboard & onboard applications)
Valeo (supply of on-board application software)
Amazon (strategic collaboration on software
Stellantis solutions starting in 2024)
Digital Auto Report 2023 Volume 2
Strategy&
platform)
QNX/ Blackberry (supply of safety-certified
embedded software)
Nvidia
(strategic collaboration on SDVs,
future focus on AI applications)
digital architecture for SDVs)
Valeo (Supply of SDV components incl. HPCs)
Qualcomm (strategic collaboration with focus
Mobile Drive (strategic collaboration together
Qualcomm
with Foxconn on in-vehicle user experiences)
(strategic collaboration on digital experience)
Android (announced strategic partnership
on next-gen. vehicle architecture)
OEM = Original Equipment Manufacturer SDV = Software Defined Vehicle HPC = High Performance Computer
Source: Strategy& analysis as of August 2023; OEM / software provider press releases
Selecting the right
partners across tech
domains is essential to
deliver winning digital
experiences & services
Front-end partnerships
visible to end users must
be carefully curated to
control customer
access & experience
For OS and compute
platform partnerships
guardrails needed to
avoid dependency on
few dominant players
ADAS = Advanced Driver Assistant System
7
USD ~8bn+ digital e-Mobility Europe1 opportunity in 20302 –
OEMs to build own platforms and drive use cases w/partners
Digital opportunities in e-Mobility
Battery ID and related services
EU market size2 (2030)
Smart charging equipment
Charge point access software
Charge point management software
Up to USD 0.5bn3
USD 5.8bn
USD 0.9bn
Digital ID for batteries containing data
about performance and manufacturing
history, increasing transparency
across the battery value chain
Smart charging hardware equipment to
optimize the charging process and
interact with the electric grid, user
preferences, and other external factors
Software platforms and mobile apps
that facilitate the interaction between
EV owners and the charging
infrastructure
Software platforms designed to
manage, operate and optimize
charging networks, as well as
enhancing the efficiency of charging
services
• Battery passports/digital battery twin
• Intelligent wall boxes/charging cables
• Search and access to charge points
• Lifecycle documentation (ownership,
status, performance, certification)
• Intelligent high power chargers
− Grid interaction and peak-shaving
− Battery storage and V2G
integration
− Remote monitoring and
maintenance
− Smart building/vehicle interaction
• Reservation and booking systems
• Real-time condition monitoring for
reliable and robust operation
• Residual value calculation
• Lifecycle optimization
• Warranty management and insurance
USD 1.4bn
• Enable electricity sales
• Authentication and access control
• Payment/ERP and other user system
integration
• Billing and payment systems
• Power/load management
• Customer service (user session)
• Customer service (troubleshooting)
• Energy and cost tracking
• Fleet management integration
A diverse range of players are trying to develop software and solutions to capitalize on the digital opportunities in e-Mobility –
OEMs should focus on developing a platform where others integrate, driving use cases through partnerships
Digital Auto Report 2023 Volume 2
Strategy&
EV = Electric vehicle OEM = Original Equipment Manufacturer ERP = Enterprise Resource Planning
1) EU (27+2) + UK + EFTA 2) Estimated 2030 revenues. Smart charging equipment includes hardware revenues 3) EV battery certificate and lifecycle optimization services only
Source: Strategy& analysis
8
Successful EV charging software covers operations and power
mgmt. for CPOs, as well as access and payment for end users
EV charging software – functionality and value chain
Types of charging software
1
Operations software
Main focus on charge point operations
Vehicle
type
2
Roaming software
Power management software
3
Main focus on optimization
Charge
point
EMSP software
Charge point management software
ISO/IEC
61851
OCPP
1.6
DC station
• Real-time condition
monitoring
• Reliable and robust
operation
EMSP
software
OICP
DIN SPEC
70121
AC station
OCPP
B2C
Roaming
Wall box
Energy markets
• Optimize energy
distribution
• Cost reduction
2
Digital Auto Report 2023 Volume 2
Strategy&
EV
driver
Mobile
1
Power management software
Commercial
vehicle
User
frontend
Roaming
services
OICP
EV battery
Main focus on authentication, charging sessions and
customer app
EMSP-related software
Operations software
Passenger
vehicle
4
Main focus on publishing POI data and processing charge
detail records
• Access to
charge points
• Enable
electricity sales
• Payment/ERP
integration
3
Web portal
RFID
4
B2B/G
4
EV = Electric vehicle SW = Software CPO = Charge Point Operator DC = Direct Current AC = Alternating Current EMP = E-Mobility Service Provider ERP = Enterprise Resource Planning
RFID = Radio Frequency Identification B2C = Business to Consumer B2B/G = Business to Business/Government OCPP = Open Charge Point Protocol OICP = Open Intercharge Protocol
Source: Desktop research, Strategy& analysis
9
Automated driving is slowly moving from trial to commercial –
but in different ways for private and shared vehicles
Automated driving – latest commercial developments
Private vehicles (exemplary ADAS functionalities)
Shared vehicles (current developments)
ADASLevel
Level 0
Robotaxi
Level 2
BMW 5
series
Pre-collision braking/forward collision
braking
✓
✓
Cross-traffic Alert
✓
✓
Predictive and adaptive cruise control
✓
✓
Assistive parking – driver assisted
✓
✓
Lane keeping assist
✓
✓
Blind spot monitoring
✓
✓
Assistive parking – remote parking/key
parking
✓
✓
Automated lane change/lane changing
assist
✓
✓
Traffic jam assistant
✓
✓
ADAS functionalities
✓
Level 2+ Highway driving assist up to 130 km/h
Level 3
Emergency assistant
✓
Hands-off traffic jam assist
✓
Highway autopilot (single-lane)
✓
Taxi services,
last mile mobility
Robo shuttle
Shared transport of people on a
defined route or demand service
shuttle service in defined areas
Tele-operated vehicles
Intersection movement assist
Level 4
Fully automated valet parking/
driverless parking
✓
Urban autopilot/fully automated urban
driving
Level 5
Full autonomy
Digital Auto Report 2023 Volume 2
Strategy&
Concierge service for car sharing
vehicles
• Robotaxis entering commercialization
(Cruise, Waymo, Baidu, Pony.ai),
expanding to more cities (e.g. San
Francisco)
• As supplier, distinguish between
premium OEM components and
low-cost systems for mass market
• However, some angry citizens in the U.S.
aim to block these vehicles in traffic
• As OEM, commercialize first L2+
features in premium vehicles and
gradually expand to other
segments
• In Germany, Sixt Robotaxi with Mobileye
and NIO gained approval in Munich
• While European cities often still deploy
pilot projects, commercial operations in
private areas/industrial sites already
active
• New robo-shuttles that require less
infrastructure are expected to increase
the appeal of the vehicle in upcoming
years
• Vay sends driverless cars to customers,
that are operated remotely and is aiming
to gather data for faster deployment of
automated driving vehicles
• Deutsche Telekom and Mira jointly
launched a pilot project for teleoperated
driving in Bonn
OEM = Original Equipment Manufacturer ADAS = Advanced Driver Assistance System AD = Automated Driving
Source: Strategy& analysis
OEMs/Suppliers
Level 1
Mercedes
S Class
Implications for …
• Provide "on-demand" solutions
(e.g. pay per use) allowing
customers to develop trust in
advanced AD functions while also
offsetting high initial component/
technology costs over the
lifecycle
• Maintain AD architectures in a
modular and flexible fashion to
ensure their reusability in various
vehicle types, including e.g.
(robo-) shuttles
• Aim for rigorous cost-down once
scale-up kicks in (L4 ADAS
material cost target at $2.840 in
2030)
10
Learnings from first wave of hype show that mobility players
need to focus on asset utilization instead of differentiation
Smart mobility – learnings and recommendations
Emerging dominant ways to play
Learnings from first hype wave
EBIT Margin (%)
2019
2020
2021
2022
-50
-100
-150
-200
offering of technology solutions that
enable businesses, cities, and
transportation providers to develop
own branded mobility applications/
services.(e.g. Trafi Whitelabel, Moovit)
Uber
DiDi
Integrated “super”-apps
• Only play games you can win – Leave
countries with limited success and divest
non-strategic business units (see UBER)
consolidation of the most prominent
local shared mobility providers in a
few apps (e.g. in Germany
FreeNow, Sixt with Miles, Bolt)
• Increase user loyalty – Consider
“Amazon Prime“-like memberships (e.g.
UberOne) and AI-enabled customer care
Global aggregator
• Use assets wisely – strategic use of own
assets (vs. partner integration) in the light
of increased capital costs and integration
of public transport (see FreeNOW)
Combination/comparison of
shared mobility offerings from
several providers, allowing users
to seamlessly find, unlock and pay
(e.g. Cogo mobility)
OEM = Original Equipment Manufacturer MaaS = Mobility-as-a-Service AD = Automated Driving
Source: Strategy& analysis
• Collaboration partner of mobility service operators:
integrate own fleets in “super”-apps/broader mobility
ecosystem
• Three-wheeled/micro-car provider: offer different,
purpose-build vehicle types that match future needs
Lyft
-250
Digital Auto Report 2023 Volume 2
Strategy&
OEMs
2018
Suppliers
2017
• Adaptive market strategist: adopt agile market strategies
and offer shared fleets with flexible ownership models (subscriptions, shared leasing, pay-as-you-go) and dynamic
pricing
Local MaaS platforms
Mobility Service
Operators
2016
0
Implications for…
• Modular platform provider: design modular vehicle
platforms ensuring easy adaptation to different mobility use
cases
• Key technological components provider: develop
standardized critical technologies e.g. automated driving
systems, advanced connectivity solutions, energy storage
• Robo-taxi/shuttle provider: prepare for adding AD fleets
(robo-taxis, robo-shuttles) to the service offering
• Collaboration partner of local MaaS provider: partner
with MaaS platform provider to optimize customer-centric
offerings and include public transport
11
Despite various digital growth opportunities, OEM focus their
investments on e-mobility, while Tech and VC firms go broader
Investment allocation by mobility topic and player type
OEM
Tech player
Venture capital
7%
22%
25%
29%
40%
43%
49%
73%
67%
70%
30%
79%
33%
27%
16%
14%
16%
8%
5%
14%
3%
6%
2019
2020
2021
2022
Electric
Automated
Connected
16%
9%
Q1 2023
2019
2020
20%
2021
27%
55%
59%
29%
21%
29%
30%
7%
6%
19%
17%
5%
11%
14%
2020
2021
2022
Q1 2023
7%
14%
20%
5%
26%
10%
13%
2022
Q1 2023
2019
5%
Shared
OEMs clearly focus on electric mobility and keep
“lights on” with automated driving; shared
mobility did not recover since the pandemic
Digital Auto Report 2023 Volume 2
Strategy&
39%
63%
24%
18%
7%
47%
27%
23%
12%
45%
47%
Tech players still bullish on automated driving
and active in electric mobility; only few new
investments in connected and shared
VCs rebalance their investment portfolio from
automated to electric mobility; while staying
active also in shared – although less than 2019
OEM = Original Equipment Manufacturer EV = Electric Vehicle VC = Venture Capital
Source: Strategy& analysis; Pitchbook; Factiva
Included companies (for OEM and Tech Player Analysis): Volkswagen Group/Porsche/Toyota Motor Corporation/General Motors Company/Hyundai Motor Group/Hyundai/ Kia Motors
Corporation/Ford Motor Company/Stellantis/Renault-Nissan/Renault/Nissan/Mitsubishi Motor/BMW Group/Mercedes-Benz Group/Honda/SAIC/Volvo (for
OEM)/Apple/Microsoft/Alphabet/Google/Waymo/Tencen Alibaba Group/Amazon/Uber Corporation/Baidu/Meta/Samsung/Xiaomi/Dell; Analyzed fields for Venture Capital Investments (in Pitchbook):
“Autonomous Cars”/“Car Sharing” or “Ride Sharing”/“Electric Vehicle”/“Connected Car” or “Connected Mobility” or “Connected Vehicles”
12
Weitere Design-Vorschläge folgen von VCS
creative
Modeling the future based on key trends
and adoption drivers
Digital Auto Report 2023 Volume 2
Strategy&
13
The PwC Strategy& mobility demand outlook builds on
different adoption assumptions per region
Key adoption assumptions
Connected
•
•
•
•
C1 mandatory in EU since 2018 (eCall initiative)
C2 (3G/4G) standard in more cars since late 2010s
OTA functionality assumed to work with C2/WiFi
C3 (5G) penetration expected with uptake of L4 AD
or active 5G push by telcos (after 2028)
•
•
•
•
No C1 required but all cars have basic connectivity
C2 (3G/4G) standard in most cars since 2010
OTA functionality assumed to work with C2/WiFi
C3 (5G) penetration expected with uptake of L4 AD
or active 5G push by telcos (after 2028)
•
•
•
•
Development is supported by governmental policy
~90% of low price cars to be connected by 2026
C2 (3G/4G) standard in mid-/high-class cars today
OTA expected to work with C2/WiFi – already at
55% of new car sales in 2022
Electric
•
•
•
•
Restrictive ICE regulation in EU (ICE ban by 2035)
TCO parity of BEV vs. ICE for most cars by 2025
Sufficient BEV raw materials & production capacity
Sufficient ramp-up of charging infrastructure
despite some delays in 2025-2030
•
No ICE ban at national level for next 15 years, but
incentive programs for BEVs planned until 2032
Production capacity sufficient for moderate demand
Charging infrastructure in the central US insufficient
ZEV states lead with higher BEV shares
•
•
•
•
•
No ICE ban at national level for next 15 years
Strong demand for segments with TCO parity
Sufficient BEV raw materials & production capacity
Charging infrastructure in rural areas insufficient
High volume A-segment for urban mobility
•
•
•
•
Uniform EU regulations with the UNECE
2x PEP cycles until prices at mass adoption level
L3 adoption first in premium vehicle segments
L4 adoption first at scale for robo-taxis/shuttles in
large cities where infrastructure build-out pays off
•
•
•
•
Different L4 regulations at state-level next 5-10 yrs
2x PEP cycles until prices at mass adoption level
L3 adoption first in premium vehicle segments
L4 adoption first at scale for robo-taxis/shuttles in
large cities where infrastructure build-out pays off
•
Supportive nationwide regulation for L4 with policy
to reach 20% L4 new vehicle sales by 2030
L3 adoption first in premium vehicle segments
L4 adoption in taxis delayed given lower cost
advantage due to lower driver wages than in EU/US
•
Rising cost for private car ownership (higher
vehicle prices/energy prices/taxation)
Higher public transport funds improve its offering
Regulation increasingly incentivizing shared modes
•
Rising cost for private car ownership (higher
vehicle prices/energy prices/taxation)
Cities will increasingly push for shared modes
(higher parking fees, city tolls, restricted lanes)
Limited improvement/funding for public transport
•
•
•
•
Automated
Smart
Mobility
•
•
•
•
•
•
•
Digital Auto Report 2023 Volume 2
Strategy&
•
•
Moderate increase of private car ownership cost
Growing population share of first-time car owners
Massive push of mega cities for shared modes
Ongoing massive invest for urban public transport
C1 = Minimum connectivity (eCall with SIM card at 2G), C2 = Advanced connectivity (infotainment/OTA at 3G/4G), C3 = Ultimate connectivity (next gen streaming/AD at 5G – incl. V2X)
OTA = Over-The-Air, AD = Automated Driving, ICE = Internal Combustion Engine, BEV = Battery Electric Vehicle, ZEV = Zero Emissions Vehicle, TCO = Total cost of ownership, PEP =
Product Engineering Process
14
Total car parc growth strongest in China; almost every new car
to be electric by 2035 in Europe; automation push in China
Total vehicle parc and technology penetration of new car sales (in million, %)
New LV Sales
(million)
Total LV Parc
(million)
Advanced
connectivity
352
15.4
52%
359
366
15.4
15.8
70%
81%
300
323
16.5
16.1
55%
359
387
30.7
418
33.1
70%
85%
94%
40%
58%
364
28.9
75%
17.1
93%
(C2-3, % new LV sales)
Electric
vehicles
32%
66%
96%
17%
41%
58%
81%
(BEV, % new LV sales)
Automated
driving
(L4/L5, % new LV sales)
Digital Auto Report 2023 Volume 2
Strategy&
0%
1%
7%
0%
3%
9%
3%
2025
2030
2035
2025
2030
2035
2025
C2 = Advanced connectivity (infotainment/OTA at 3G/4G), C3 = Ultimate connectivity (next gen streaming/AD at 5G – incl. V2X)
LV = Light Vehicles = Cars + Light Commercial Vehicles < 6t GVW BEV = Battery Electric Vehicle L4/5 = Level 4/5 automated driving
Source: PwC Autofacts® Mobility Demand Model, Strategy&
18%
2030
36%
2035
16
Significant growth in connectivity levels are expected in key
regions; a quarter of the car parc in China will be C3 by 2035
Total vehicle parc and connected car share (in million units, %)
352
6% 0%
359
13%
1%
366
300
323
3%
0%
16%
2%
23%
21%
14%
44%
359
364
387
15%
2%
18%
7%
19%
38%
51%
57%
73%
69%
52%
42%
2030
Non-Connected
C1
2035
C2
2025
2030
2035
18%
54%
36%
10%
11%
2030
2035
62%
7%
26%
17%
2025
25%
32%
14%
418
2025
C3
C0 = Not connected, C1 = Minimum connectivity (eCall with SIM card at 2G), C2 = Advanced connectivity (infotainment/OTA at 3G/4G), C3 = Ultimate connectivity (next gen streaming/AD at 5G – incl. V2X
Source: PwC Autofacts® Mobility Demand Model, Strategy&
Digital Auto Report 2023 Volume 2
Strategy&
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.
16
BEVs will represent >90% of new car sales in Europe and
>80% in China; followed by the US with ~60% by 2035
New vehicle sales by powertrain (in million units scaled to 100%)
15.4
15.4
15.8
16.5
16.1
0%
1%
2%
0%
17%
2%
0%
32%
12%
17.1
28.9
30.7
33.1
2%
0%
0%
0%
40%
41%
1%
81%
8%
2%
57%
38%
26%
81%
9%
96%
56%
58%
58%
66%
9%
51%
33%
5%
14%
2030
2035
1% 1%
2025
ICE (incl. HEV)
2030
PHEV
2035
BEV
2025
2030
2035
2025
FCEV
ICE = Internal Combustion Engine HEV = Hybrid Electric Vehicle PHEV = Plug-in Hybrid Electric Vehicle BEC = Battery Electric Vehicle FCEV = Fuel Cell Electrc Vehicles
Source: PwC Autofacts® Mobility Demand Model, Strategy&
Digital Auto Report 2023 Volume 2
Strategy&
Firm regulatory push by the EU will promote mass adoption of BEVs in the
region. At the same time, China and the US are also heavily incentivizing the
sale and local production of BEVs. Government policies and growing
consumer acceptance will continue to play a key role in the electrified future.
17
Market diffusion of BEVs likely to move from the premium
towards volume and entry segments
Global eMobility diffusion across vehicle classes
5
Premium city
BEV
6
Electrification
Global revenue1
in %
in bn USD
Green
rocket
75%
3
4
Volume
Mass
BEV
• Premium to lead electrification
• Technological and commercial
advancement to grow BEV share further
~267
• By 2030, the volume segment expected
to be a strong driver for BEV sales and
reach brink of large-scale diffusion
• From 2030 onwards, majority of vehicles
forecasted to be electric
~92
50%
~27
1
2
Entry
BEV
Rational
green
33%
~44
A/B
C/D
Passenger car segment
Digital Auto Report 2023 Volume 2
Strategy&
E/F
2022
BEV
2030
ICE
ICE = Internal Combustion Engine BEV = Battery Electric Vehicle
1) Powertrain revenue (incl. battery)
Source: Strategy& Powertrain Study 2023
2022
Comments
~378
Allrounder
BEV
Entry
Vehicle price class
Premium
2030 powertrain portfolio
~114
2030
• Gap between premium and entry
electrification expected to persist
beyond 2030, owing to price sensitivity
• From 2030 onwards, cost decreases
anticipated to facilitate electrification
20
Europe and US show moderate automated driving adoption;
China’s forecast very optimistic based on government’s plans
New vehicle sales by SAE level (in million units scaled to 100%)
15.4
15.4
1% 0%
5% 1%
15.8
7%
10%
16.5
16.1
1% 0%
3%
5%
17.1
28.9
30.7
9%
3%
12%
18%
14%
33.1
36%
36%
99%
99%
93%
82%
93%
77%
85%
48%
46%
17%
2025
L0-2
2030
L3
2035
2025
2030
2035
2025
2030
2035
L4-5
SAE = Society of Automotive Engineers AD = Automated Driving
Source: PwC Autofacts® Mobility Demand Model, Strategy&
Digital Auto Report 2023 Volume 2
Strategy&
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.
19
OEM revenues allocated to AD features expected to reach $81
bn by ‘35; L4 revenues to quickly outperform L3 once available
Automated driving – market outlook
Revenue potential1) (AD features value contribution to total vehicle sales based on
bottom-up estimation, in bn USD)
∑ $81bn
27
18
13
11
3
8
13
6
9
6
8
2
22
15
• The forecast reflects the additional
revenues of OEMs through new ADAS
components (sensors, actuators, computers,
wiring harness, HMI, ...) in the vehicles
• Revenue potential based on bottom-up /
supply-side development (not top-down
government targets)
20
13
Comments
4
9
34
10
7
• Strong increase of L3 applications expected
in North America, China and EU, beginning
2026
• Push of L4 applications expected with
increased use of highway pilots and valet
parking in China and EU
18
2025
L0-L2
Digital Auto Report 2023 Volume 2
Strategy&
L3
2030
2035
PC L4
AD = Automated Driving OEM = Original Equipment Manufacturer
Source: Strategy&
HMI = Human Machine Interface
22
Mobility behaviors vary greatly by region – US car dominated,
Germany and China more walking, biking & public transport
Trips by mobility mode (in million trips per day, scaled to %)
261
13%
1% 0%
54%
257
228
13%
1% 0%
54%
12%
2% 1%
1,171
1,256
1,344
5% 1%
2%
5% 1%
2%
5%
2% 2%
1,029
1,193
1,384
26%
28%
30%
0% 5%
0% 5%
0% 6%
37%
34%
31%
8%
8%
9%
24%
24%
24%
2025
2030
2035
53%
87%
87%
87%
21%
21%
21%
11%
11%
10%
2% 3%
2% 3%
1% 3%
2025
2030
2035
2025
2030
2035
Public transport
Mobility-as-a-Service
Vehicle-as-a-Service
Private vehicle
[e.g. bus, train]
[e.g. taxi, hailing, robo]
[e.g. sharing, rental,
subscription]
[e.g. own vehicle]
Micro (walk)
Micro (bike)
Source: PwC Autofacts® Mobility Demand Model, Strategy&
Digital Auto Report 2023 Volume 2
Strategy&
The most frequently used mobility modes vary across the analyzed markets –
while the Americans predominantly use private vehicles, Germans and
Chinese also often take the public transport, or walk and ride bikes for a fair
share of their trips.
21
Without fundamental change of market conditions, new modes
MaaS and VaaS will stay below 5% in overall mobility mix
Distance travelled by mobility mode (in billion person-kilometer travelled per day scaled to %)
3.1
20%
1% 0%
72%
3.1
2.8
20%
2% 0%
71%
20%
18.8
20.2
21.6
5% 1%
1%
5% 1%
2%
4% 1%
2%
16.4
17.8
20.7
59%
60%
60%
1% 3%
1% 3%
1% 4%
33%
32%
31%
2% 2%
92%
70%
92%
92%
3% 3%
3% 3%
3% 3%
0% 0%
0% 0%
0% 0%
3% 1%
3% 1%
3% 1%
2025
2030
2035
2025
2030
2035
2025
2030
2035
Public transport
Mobility-as-a-Service
Vehicle-as-a-Service
Private vehicle
[e.g. bus, train]
[e.g. taxi, hailing, robo]
[e.g. sharing, rental,
subscription]
[e.g. own vehicle]
Micro (walk)
Micro (bike)
Source: PwC Autofacts® Mobility Demand Model, Strategy&
Digital Auto Report 2023 Volume 2
Strategy&
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.
22
In such a conservative base scenario, MaaS and VaaS revenues
will grow moderately to $264bn in DE, US and China by ‘35
Mobility-as-a-Service (MaaS) and Vehicle-as-a-Service (VaaS) market outlook
Total revenue potential (in bn USD)
∑ $264bn
Comments
• Outlook reflects the revenue potential of Mobility-as-aService (e.g. (robo)-taxi, ride hailing) and of Vehicle-as-aService (e.g. sharing, rental, subscription)
5
6
23
16
12
5
11
9
14
151
119
119
75
60
44
59
84
67
82
88
90
75
81
82
6
7
8
2030
2035
2025
Mobility-as-a-Service
Vehicle-as-a-Service
[e.g. taxi, hailing, robo]
[e.g. sharing, rental, subscription]
Digital Auto Report 2023 Volume 2
Strategy&
MaaS = Mobility-as-a-Service VaaS = Vehicle-as-a-Service
Source: Strategy&
• Market size is driven by expected kilometer traveled per
mode and corresponding service price per kilometer
• German and US market both with relevant share of VaaS
(requiring active driving by the customer), while China with
significantly higher share of passive mode MaaS at
relative lower prices (given lower driver cost & cultural habits)
• Growth of MaaS segment driven by better integration of
multi-modal offerings and expected moderate uptake of
robo-taxis after 2030 allowing decreasing km-prices
• Growth of VaaS segment driven by increasingly attractive
car subscriptions and more flexible booking options in
“super apps” offering different service options in one place
• Stronger uptake in revenues expected once robo-taxis are
deployed at scale for majority of trips / use cases after 2035
25
Smart mobility ecosystem evolution prompts societal trade-off
discussions that are essential for a sustainable transformation
Trade-offs regarding smart mobility vision
Progressive view
User
Multimodal mobility incl. convenient, fast travel within and
between major cities to reduce individual carbon
footprints, promote efficiency, accessibility and equity
Efficient public transport complemented by smart cargo
solutions to enable people-centered cities with a focus on
green spaces, clean air and minimal noise
New jobs, e.g., in battery production, resulting from new
technologies and better job accessibility for the
underprivileged, previously deterred by high commute costs
Decentralized market power to engage diverse players,
promoting tailored local mobility solutions and
competition, with an emphasis on digital sovereignty
Openness to new technology, despite
risks and setbacks, to achieve rapid learning
effects for long-term improvement
87% of mobility
trips by car in the
US
Multimodal mobility vs.
private car ownership
43 megacities are
expected by 2030
City
Economy
$264 bn. MaaS &
VaaS market in DE
/ US / CN by 2035
New opportunities vs.
status quo
Risk of job losses in the combustion engines and supplies sector
from lower ICE vehicle sales and employment cutbacks due to
advanced automation, e.g. due to automated driving
Business
Decentralized vs.
centralized power
Technology
Openness vs.
skepticism
Space and infrastructure requirements to meet traditional
driving preferences and allow personal car ownership to
fulfil desire for personal freedom
Car-centric cities with infrastructure to support BEVs and
autonomous options incl. multiple lanes and parking spaces
to preserve individual mobility
Human vs.
car centric city
35% expect AI to
harm their career in
next 5 years
Conservative view
84% in GE, 71% in US,
19% in CN feeling
not comfortable using
a fully autonomous car
Power concentration of few major players to provide
technology and mobility solutions, achieving cost
efficiency via economies of scale
Concerns related to surveillance, data
privacy, cybersecurity, and automated driving
accidents, due to immature tech, e.g.,robo-taxis
Overcoming societal status-quo orientation requires a concerted effort in effective regulatory
frameworks & incentives as well as ongoing stakeholder dialogues and communication
Digital Auto Report 2023 Volume 2
Strategy&
ICE = Internal Combustion Engine
Source: Strategy& research, Digital Auto Report 2023 Vol1 / Vol2, UN report
26
In summary, there are very specific strategic priorities for each
mobility player group to stay competitive in the future
Recommendations for mobility value creation
Automotive OEMs
Automotive suppliers
Mobility service providers
Customer
experience
and activation
Own the digital experience
Define brand defining moments along
customer journey and use digital
technologies for differentiation
Provide modular platforms
Design modular vehicle platforms
ensuring easy adaption to different
mobility use cases and clients
Increase loyalty and asset utilization
Consider memberships (e.g. UberOne)
to create ‘stickiness’ and focus on asset
utilization over differentiation
Opportunity
and value
creation
Orchestrate e-Mobility & AD services
Build proprietary platforms integrating
battery and charging solutions; test AD
monetization via various schemes
(one-off, on-demand, subscription)
Become AD enabler at the right time
Capture momentum from 5G
penetration and China’s recent pushes
to position as AD enabler
Prepare for the AD era
Be ready to add AD fleet (-components)
e.g. robo-taxis/shuttles to the service
offering when the time is right
Partnering
and tech
capabilities
Bridge technology capability gaps
Count on best-in-class tech capabilities
of partners to balance cost and
customer satisfaction; but go multipartner to avoid dependencies
Enable ecosystem as integrator
Integrate own mobility products into
other platforms for scale (e.g. white
label) and support integration of
different ecosystems (-solutions)
Collaborate for MaaS success
Partner with MaaS platform provider to
optimize customer-centric offerings
and include public transport
Digital Auto Report 2023 Volume 2
Strategy&
AD = Automated Driving MaaS = Mobility-as-a-Service
Source: Strategy&
27
Network contacts
Jörg Krings
Dr. Andreas Gissler
Jonas Seyfferth
Hartmut Güthner
Dr. Jörn Neuhausen
Thilo Bühnen
joerg.krings@
strategyand.de.pwc.com
andreas.gissler@
strategyand.de.pwc.com
jonas.seyfferth@
strategyand.de.pwc.com
hartmut.guethner@
strategyand.de.pwc.com
joern.neuhausen@
strategyand.de.pwc.com
thilo.buehnen@
pwc.ch
Automotive Europe
Digital Transformation
Connected and Smart Mobility
Automated Driving
Alternative Powertrains
Mobility Venturing
Contributors
Leonardo Amico
Tobias Karl
Kunal Arora
Tobias Killmeier
Nicola Becht
Kolja Lichtenthäler
Karolina Blinova
Tym Pieglowski
Akshay Singh
Steven Jiang
Milos Bartosek
Steven van Arsdale
Jørgen Frost Bø
Dr. Philipp Rose
akshay.singh@
pwc.com
steven.jiang@
strategyand.cn.pwc.com
milos.bartosek@
pwc.com
steven.james.van.arsdale@
pwc.com
Sin It Foong
Ashley L Zhang
Nisella Guo
Malien Zehnpfenning
Automotive US
Automotive China
Infrastructure Deals
PwC Autofacts® Lead Analyst
Carl Heselschwerdt
© 2023 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Mentions of Strategy& refer to the
global team of practical strategists that is integrated within the PwC network of firms. For more about Strategy&, see www.strategyand.pwc.com. No reproduction is permitted in whole or part without written permission of PwC.
Disclaimer: This content is for general purposes only, and should not be used as a substitute for consultation with professional advisors.
Digital Auto Report 2023 Volume 2
Strategy&
18