year vehicles automakers see 2021 ev next

techsuch May 9, 2021 0 Comments

What’s next for the automotive industry in 2021?Will 2021 be the year of the self-driving car? Not Likely. Priorities will bemuch more immediate than that, writes Alyssa AltmanThe onslaught of Covid-19 saw automakers suffer a difficult first half of2020, slightly lifted by a more buoyant Q3. Global shutdowns halted productionand supply chains were disrupted. Unfortunately, a difficult 2020 has bledinto a challenged, yet opportunistic 2021. And in a cruel twist of déjà vu,many markets—namely the UK and EU—are back in prolonged periods of lockdownswhich will likely see Q1 auto sales compromised. Even with the severe cost-cutting across OEMs seen last year, and despite an encouraging roll-out of thevaccine in the UK, Covid-related risks remain worryingly high and the autoindustry is unlikely to see a rebound this year, or even next few years, backto pre-pandemic sales numbers.Countries like China which have bounced back from the virus quicker than theirWestern neighbours will see the pendulum of supply versus demand swing back infavour of the East where automakers with bigger shares in the Chinese marketwill profit from the region’s relatively fast recovery and growth.However, despite the gloom, the auto industry is far from stagnant. The nextdecade will be one of its biggest yet. 2020 gave automakers the opportunity toreposition themselves as they emerge from the crisis on a new path towardselectrification and connectivity.Hard global CO2 emission targets are in play, and automakers must double downif they want to be in with a chance of getting even close to reaching them.Subsequently, 2021 will be the year electric vehicles (EVs) take centre stage.They’ll be pushed out into market, perhaps even with a discount, to drivesales and further contribute to reducing emissions.2021 will see a continuation of trends that have been bubbling even beforeCOVID. From ramping up EV investment to digital playing an ever-increasingrole in the vehicle purchase journey, sustainability and customer experiencewill be the standout priorities for automakers this year.The GMC Hummer EV will help make 2021 a pivotal year for electrification## The electric revolutionWith lofty global zero emissions goals, it will be the decade of the EV, and2021 is a critical year in that step change. We will see every major OEM beginor increase marketing EVs across their vehicle line-up, with many scaling andrecalibrating their business models to sell EVs at scale. Both new and oldautomakers will launch much-awaited vehicles in 2021. There are many fromsport cars to SUVs: Audi e-Tron GT, BMW iX3, Mustang Mach-E, GMC Hummer EVSUT, Lucid Air, Polestar 2 (Volvo), Nissan Ariya, and Mercedes-Benz EQC toname a few. Whilst it is unlikely this immediate roll-out will cause Tesla’scrown to slip, more competitively priced EVs in the market will likely have aknock-on effect in the years to come.As for the EV start-up market, focus will be on delivery vans and buses whichwill prove revolutionary if achieved at scale. For example, companies like theUK’s Arrival, backed by Hyundai and BlackRock, will continue to build volumeorders in the EV B2B space. Last year saw Amazon reveal its first electricvan, developed by EV start-up Rivian, which claims to “raise the bar for next-generation delivery” vehicles. Whilst roll-out isn’t largely expected until2022—the delivery giant aims to have 10,000 vehicles on the road by next yearand ten times that by 2030—its mere promise will see significant movement inthis space over the course of the next year. As we start 2021, Rivian is closeto raising funds with a US$25bn valuation.## Digital experienceAs consumer buying behaviour continues to shift, and COVID-relatedrestrictions remain at least for the first half of 2021, improved customerexperience will become absolutely critical in 2021. Subsequently, furtherinvestment will be made in digital. Online sales tools will improve and becomeembedded in the process, and although the models behind them won’t changequite yet, they will begin to evolve and identify gaps in the current customerexperience. Digital leaders like Daimler offer single sign-on to streamlinethe customer experience for both current and prospective customers. Most ofthe automakers are focusing on accelerating their connectivity and voice-activated capabilities to improve the in-car, shopping and service experience.To do this, not only are they implementing the technology, but they are alsobuilding data platforms to activate on the data and be able to make faster andsmarter decisions on how to elevate and evolve the customer experience.Daimler is aiming to take 25% of sales online by 2025. Volvo is aiming for 50%over the same time period## Self-driving and autonomous vehiclesWhilst not a major area of focus for automakers in 2021 as they prioritiseefforts to new and upcoming legislation on emissions, developing and marketingclimate-friendly products, and recouping their losses, self-driving andautonomous vehicles will likely continue to be a hot topic of conversation,and still make for the occasional headline.Self-driving and autonomous vehicles will be a test-and-learn endeavour butwill not be where all, or even most, of 2021 budgets go. The immediate need inthe economy and post-pandemic for the creation of jobs and solid cash flowwill require a focus on what OEMs can bring to fruition at scale in the next18 months. EVs are that opportunity.In the interim, it will be the big tech giants—Google, Apple andMicrosoft—that continue to work on autonomous vehicles and partner withautomakers to bring these to a reality in the near(ish) future. Tesla willalso lead the charge given it already has an EV platform to fuel the business.As autonomous vehicles won’t be a reality for a while, we’ll see targetgeographies where these technology players, Tesla and the OEMs will continueto evolve the technology, targeting roll out in the next few years. But 2021will be a year more of chatter than market realisation.Additionally, companies like Uber and Lyft have business models thatultimately rely on autonomous, so we may see them build momentum this year,but it will be cautionary until the technology and rules of the road work withthe needs of autonomous vehicles.We’ll also likely see new designs for autonomous vehicles, at least at CES,that take the frame of what we know as how automobiles look inside and out,and place focus more on the experience itself. In 2021, dreams of what itcould be like to be in an autonomous vehicle will be refined and begin tobuild a reality for consumers, realised through technology.## ConnectivityA big focus for automakers this year, in addition to building an EV platform,will be connected vehicles and how they can provide a more robust and2021-like experience for consumers who are increasingly demanding of such.Recent research shows that expectations for vehicles pre-fitted with connectedtech is now mainstream, with almost all people surveyed (93%) desiring atleast one connected feature in their next vehicle, cameras and navigationcoming out top. The look-and-feel of the car and how it improves and engageswith consumers’ digital lives is what will create the most brand loyalcustomers.## StreamliningUnfortunately, the process of streamlining businesses is most probably farfrom over for automakers. With a difficult year behind them, and perhaps alsoa difficult year ahead, they urgently need to decrease the complexity of theirbusiness and increase profitability; reducing the numbers of derivatives whichare not profitable, minimising their ‘nice-to-have’ projects and increasingthe speed of change to make a difference. The alternative outlook isunfavourable.Ultimately, 2021 will be a year of meticulous focus: focus on building thefuture of the auto industry, with EVs and connectivity being the primary areasfor growth and transformation along with targeting operating approach andcosts.* * *About the author: Alyssa Altman is Global Transportation & Mobility Lead atPublicis Sapient

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