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...but also on the players in the industry and their
profitability
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Autonomous
City regulation
Connectivity
Integrated view necessary Emission standards
to assess implications
3
Key change drivers reinforce each other—with large implications for the industry
Schematic
Copyright © 2017 by The Boston Consulting Group, Inc. All rights reserved.
AV adoption curve
Gov. incentives & bans Share of AVs Revenue pools
4
Car sales volume will stall—bringing decades of growth
to an end
New car sales Emergence of self-
(Global, in M units) driving, on-demand
mobility models
108
Global 104
financial
91
crisis
Chinese
market
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66
Oil opening up
crisis
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Total vehicle sales Vehicles for on-demand services New car sales Today
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
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SLIDESHARE Profit Pools_media presentation deck FINAL.pptx
30% 12%
14% 6% 11% 18%
1% 6% 2% 1% 5% 3% 4% 9%
2017 2025 2030 2035 2017 2025 2030 2035 2017 2025 2030 2035
Gasoline & diesel Human-driven cars Personal car
Hybrid & mild hybrid (HEV) Personal self-driving cars (L4/5) On-demand
Plug-in hybrid (PHEV) Self-driving taxis (L4/5) (from 2025 on: mainly self-driving)
Electric vehicle (BEV)
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Consumer EV adoption Hesitant Rapid
infrastructure expansion
Gas down, electricity up (gas: $1.50/ Constant (gas: 2.50 $/gallon; Gas up, electricity down (gas: $3.50/
Energy prices (gas, electricity)
CO2 emissions regulation (e.g., CAFE) Targets are relaxed Currently expected regulation Targets are tightened
AV legislative framework Worked out by 2027 Worked out by 2025 Worked out by 2021
competitive advantages
areas where incumbents
Profits, $billion
+2.9% p.a. 380
336
303
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26% 40%
226 17%
1%
Emerging profit pools (incl. AV & BEV component suppliers, BEV car sales, data & connectivity and on-demand mobility)
Classic profit pools (incl. classic component supply, ICE car sales, financing and aftermarket)
Source: BCG analysis 9
AV=autonomous vehicles; BEV=battery-powered electric vehicles; ICE=internal combustion engine
Today, the long-established car business is driving
industry profits
Profit pools – today (2017, in $B)
67 79 24 54 1 <0 1 <0
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SLIDESHARE Profit Pools_media presentation deck FINAL.pptx
'Classic' New car sales AV and BEV New car sales Data & On-demand
Financing Aftermarket
components (ICE & hybrids) components (BEV) Connectivity mobility
$226 billion
Source: BCG analysis 10
But future growth takes place in fields in which auto
players do not possess competitive advantages
Profit pools - future (2035, in $B)
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SLIDESHARE Profit Pools_media presentation deck FINAL.pptx
70 60 33 66 26 21 28 76
(+3) (-19) (+9) (+12) (+25) (+21) (+27) (+76)
'Classic' New car sales AV and BEV New car sales Data & On-demand
Financing Aftermarket
components (ICE & hybrids) components (BEV) Connectivity mobility
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Aftermarket business negatively affected by switch to electrified
New profit pools in data & connectivity emerge, taking off with self-
driving cars
12
Substantial investments will be
necessary to unlock growth areas
They include
• AV technology
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• Battery production capacity
13
Substantial industry wide investments required to unlock growth areas: >$900B
through 2030 (> $2.4T through 2035)
‘Classic’ New car sales AV and BEV New car sales Data and On-demand
Financing Aftermarket
components (ICE and hybrids) components (BEV) connectivity mobility
1. AV technology (R&D) 2. Battery prod. capacities 3. Charging infrastructure 4. Self-driving taxi fleet
Cumulated investment, in $B
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Cumulated investment, in $B Cumulated investment, in $B Cumulated investment, in $B
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~ -1%pt
~ +1%pt
16
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Broker autonomous on-demand rides
OEMs:
e.g., VW BMW Daimler GM ... Face stronger suppliers and risk losing the
customer interface
Suppliers Suppliers:
e.g., Bosch, Continental, Nvidia, LG, Delphi, ZF Electronics and software become crucial—
newcomers find themselves in strong
positions
Source: BCG analysis 17
Large option space for industry players still exists
Not exhaustive
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On-demand platform
On-demand fleet management (ops, financing)
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A report by BCG and the World Economic Forum
Michelle Andersen Philipp Sadek October 2017
Partner Associate
To request more information on this research, To request a media interview, please contact Eric To discuss the findings with a BCG expert, please
please contact BCG-Info@bcg.com. Gregoire at gregoire.eric@bcg.com. contact Irene Perzylo at perzylo.irene@bcg.com.
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