Welcome to the Roaring Twenties 2.0

Green technologies and services advisor Jack Smith explores some of the seismic changes in mobility that will take hold over the next decade, and what it means for SMEs in the supply chain.

Posted on 22 January 2020

 

Green technologies and services advisor Jack Smith explores some of the seismic changes in mobility that will take hold over the next decade, and what it means for SMEs in the supply chain.

Welcome to the 2020s. It’s now been 100 years since the beginning of the Roaring Twenties, when Henry Ford’s moving assembly line revolutionised mobility for the masses. A century later, we once again find ourselves at the crossroads of a ground-breaking shift in mobility. This time there are three main junctures: electric vehicles (EVs), mobility-as-a-service (MaaS), and connected and autonomous mobility (CAM). Here’s what to watch out for over the next few years.

Uptake of EVs to accelerate

The UK has made steady progress with EVs, with over 226,000 ultra-low emission vehicles now on the road across the country. More than 4,000 of these were registered in Greater Manchester, which has 400+ public charge points in place and counting. Driven by the government’s Road to Zero strategy, forecasts predict that 69 per cent of passenger car sales and 57 per cent of light commercial vehicle sales will be battery electric or plug-in hybrid vehicles by 2030.

Globally, the cliché of “if you can’t beat them, join them” has rung true for major oil players such as Shell and BP, who have turned their attention to investing and acquiring specialist businesses in the EV charging infrastructure, renewable energy, smart grid technology and battery storage sectors. Their deep pockets will no doubt drive the growth of EVs and the infrastructure needed to a new level.

More locally, the current proposals for a Greater Manchester Clean Air Zone will see the most polluting commercial vehicles charged a daily penalty to drive within the city region, further strengthening the business case for going electric. Transport for Greater Manchester (TfGM) plans to upgrade and expand its existing GMEV network of charge points with an estimated £58 million of investment, enabling fast and rapid charging at strategic locations across the city region.

Understanding the total costs of ownership is the key to EVs becoming mainstream. The running costs of an EV are already significantly cheaper than petrol or diesel on a per mile basis, and with the addition of smart charging and vehicle-to-grid technology it will become possible in future to monetise EVs when idle. Initial purchase prices are set to fall further due to advances in battery technology, which currently accounts for around 40 per cent of the cost of an EV. Battery costs have declined by 70 per cent over the past 7 years and are expected to halve again by 2030.

From a consumer point of view, there needs to be a change in mindset around taking your vehicle to a forecourt and refuelling it periodically. In future, infrastructure for ‘refuelling’ will become a diverse mix of en-route and destination charging. This will include rapid charging at forecourts and motorway services, but also slower ‘trickle’ options for when a car may be parked for longer periods, such as car parks, workplaces, supermarkets, hotels and restaurants, as well as home charging, on-street lamp post charging and kerbside charging.

Vehicle ownership to decrease

Despite the rise of EVs, vehicle ownership is decreasing. It is expected that half of car owners today will no longer want to own a personal vehicle by 2025. According to a study commissioned by the Department for Transport, the percentage of people holding a UK driving licence has been falling since the mid-1990s, particularly amongst younger people.

This change signals a consumer demand for ‘mobility-as-a-service’ (MaaS) – an alternative to ownership visible in services like Uber. Multi-modal MaaS aggregation is already on the rise, with companies such as Whim offering all-inclusive bundles to access public transport, taxis, car and bike rental services through a single membership.

In Greater Manchester, we’ve already seen the rise and demise of schemes such as Mobike. However, thanks to the Made to Move GM plan we can expect to see a mix of docked and dock-less bikes available in the city in the coming years, as well as the provision of e-scooters from innovative companies operating in other cities such as Lime, Lyft and JUMP by Uber.

Other emerging mobility offers include car subscription services, with traditional leasing agreements shifting towards flexible monthly contract bundles. For example, Manchester start-up Zoom EV offers bundled support to access shared EVs, insurance policies, discounted and pre-booked parking, home charging and green energy tariffs.

Rise of Connected and Autonomous Vehicles

In 2019, Zenzic, a government-backed organisation leading the shift to a self-driving future, launched its UK Connected and Automated Mobility Roadmap to 2030. The roadmap sets out a vision for the UK to become a world-leader in changing the way people and goods move around. Whilst CAM could increase the number of vehicles on the road, it will improve safety – over 85 per cent of road incidents are attributable to human error. Data-driven connected vehicles will also ease congestion and pollution while improving public transport access and productivity. The Department for Transport predicts that CAM has the potential to save up to 225 hours a year per driver.

Greater Manchester has taken advantage of funding and used its expertise in academic institutions to become a living laboratory for CAM. Project Synergy will operate connected autonomous cars in a platoon formation from Stockport railway station directly to the arrivals terminal at Manchester Airport. NAVYA, French market leader in innovative mobility solutions, registered the first sale of its NAVYA AUTONOM Shuttle to the University of Salford, which now offers a course in Automotive and Autonomous Vehicle Technology and is testing its vehicle on the roads around Media City.

Where’s the value for green tech SMEs?

The shift towards electrification offers significant growth and diversification opportunities for SMEs, particularly due to the low barrier to entry for those looking to install and maintain charging infrastructure. Meanwhile, opportunities within the MaaS and CAM ecosystem lie in monetising data, unstranding assets, collaborating across sectors and building beneficial partnerships. In Greater Manchester we are positioned to excel in these sectors.

Here at GC Business Growth Hub, we can support your business to understand the market and make informed growth or diversification strategies in the mobility sector. With our expert knowledge, we support Greater Manchester SMEs to capitalise on market opportunities, understand current and future business strategies, broker support for skills and knowledge gaps, identify sales opportunities, help develop marketing plans and boost your business profile.

Contact our Green Technologies and Services Team to learn more.

 

Posted under General Interest on 22 January 2020