Car industry has been growing ever since the invention of combustion engines. Everyone wants a car! Or not any longer? We live in an age when the very concept of cars – electric vehicles, autonomous driving – and also customers’ needs change. Cars as we know them will probably soon end up on the waste dump of history.
When in 2012 Elon Musk came with the Tesla Model S all-electric car with the Autopilot function which was capable of controlling the vehicle under certain conditions, Volkswagen said that it’s a great technology, but maybe for the year 2035. In less than two years, this traditional car manufacturer – together with BMW, Mercedes, General Motors – also entered the race for a price competitive electric car.
The question is whether it will be enough for traditional car makers and whether they won’t end up like other market leaders that ceased to exist almost overnight – such as Kodak or Sony. China today holds all the trump cards. If we all started driving electric cars overnight, 30 per cent of the value chain of the car industry will immediately flow to China. Today, China is practically the only battery manufacturer and they are the key element of electric mobility. Car maker BYD whose portfolio concentrates more and more on electricity, is the third larges car producer in the world today. As part of its five-year plan, China has announced that by 2020 five million electric cars will be driving on its roads – and it is likely to fulfil this goal. To be able to buy a car with a combustion engine today in Beijing, you have to be drawn in a state lottery – your chance is 1:200 and you can’t even drive your car every day; whereas if you buy an electric car, the Chinese government reimburses a quarter of the price.
Electric cars of the near future will most likely be autonomous. You can come across the first cars of this kind today, although mostly still in testing. Behind the doors of high-tech labs a technology potentially accessible by masses is being designed. The symbol of this revolution was the moment when Intel bought Israeli start-up company Mobileye and its system of driving assistance for astronomic 15 billion US dollars. The current value of the firm is much higher; a company with only one thousand employees has the same value as the gigantic French concern PSA.
Traditional carmakers can expect a Darwinian struggle for survival. Whoever lags behind, closes. To make matters worse, consumers’ preferences have completely changed. Less and less people bellow 24 years of age get a driving licence; a car is no longer a symbol of freedom, but a burden. In large cities thanks to the car-sharing systems – for example Uber, Lyft, or Chinese Didi Chung – you can get anywhere and without any hassle. These companies are not some “average alternative taxi service” – they have their own extensive research programme to develop software and hardware whose aim is to develop an autonomous driving compatible with their network and management of transportation in large cities. The head of Didi Chung openly says they would like to take over the management of transport in Chinese cities; i.e. to privatize public management in the name of higher efficiency.