Technology-driven disruption in the automotive industry

Mobility plays a key role in the strongly needed sustainable transition. As new approaches are shaping the industry and consumer behaviours, players in the auto industry need to venture out into new product offers as well.
COVID-19, among other factors, led to automotive sales being at a historic low in the first half of 2020. However, another shift caused the faster revival of the auto industry: consumers preferred personal mobility once more, resulting in increased demand for vehicles.

Additionally, several key trends are currently shaping the automotive industry and will most likely continue to do so: digitalisation (digital retail, internet of things, vehicle subscription, increasing automation, etc.), used cars, circular economy concepts, electric mobility, and numerous more.

Many of the abovementioned trends are technology-driven and linked to sustainability pressure from various stakeholders. And while sharing economy approaches may have received a blow in popularity due to COVID-19, they are still viewed as one of the solutions for our climate crisis fuelled by overconsumption.
Therefore, new vehicle ownership models are increasingly popular, like leasing and vehicle subscription. To meet future demand, this should not only cover premium versions but also include affordable variations that are more accessible.

Another essential topic is the zero-emission car, such as electric vehicles. Powered by batteries, they do not cause any emissions during their use time. However, their reliance on accommodating infrastructure will slow down the speed of adoption in many areas.
Another central issue still remains unsolved: the (unethical) sourcing of materials needed for the batteries powering these vehicles. Nonetheless, government subsidies provide incentives for many consumers to buy electric and hybrid vehicles, resulting in higher sales.
Consequently, the entire value chain of automotives is being scrutinized: not only end-of-life vehicle waste is an issue, but more and more circular economy concepts are playing a part. In addition to carbon-neutral manufacturing, reusing and recycling materials is also shaping processes, often supported by digital solutions.

Actors in the auto industry, therefore, have a plethora of issues to solve related to sustainability – changing customer demands, increasing legislative pressure, and complex supply chains – while ensuring profitability.

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