THE COWEN INSIGHT
We see a great deal of change in the early 2020s for the Mobility industry, leveraging technology to shift to a safe, green and connected ecosystem. We see the sector shifting to a software focused world versus hardware previously. Beyond auto, this report explores trends in a variety of forms of mobility including trucks, delivery robots, drones and electrified aircraft. In addition, we look at secondary impacts in areas like trucking, payments, package delivery, electricity demand, and reduced oil usage.
Changing Mobility Landscape Creates Ripple Effects in Multiple Industries
The comprehensive nature of the mobility industry means it naturally affects a myriad of other industries. On a more granular level, we believe the shifting forms of mobility directly affect the following industries and areas: semiconductors, software, sensors/connectors, telecom services/equipment, steel/aluminum demand, gasoline consumption, airlines, trucking/freight, payments, and restaurant delivery. Therefore, the scope of this report encapsulates a much larger market than the ~$3.5 trillion auto market given its broader focus on mobility.
Electric Vehicles Tracking to Be Cheaper than Internal Combustion Engines
Electric vehicle (EV) adoption continues to grow. We expect further declines of battery costs (currently ~30-35% of the cost of an EV, down from ~45-50% in 2017). This cost reduction paired with increases in costs around the internal combustion engine (ICE) to meet greenhouse gas and fuel efficiency requirements will lead to EVs being cheaper than ICE vehicles beginning around ‘23.
Consequently, we forecast EVs will account for ~3% of all vehicles sold globally in ‘20 and rising to ~9.5% in ‘25 (up from ~7.5% in our 2017 report) as traditional ICEs lose market share to hybrids and electrified solutions. While we expect a sharp acceleration of growth in EVs in the coming years, we note that our ’20 forecast still has ~98% of vehicles sold using some form of an ICE. This includes both hybrid solutions as well as plug-in hybrid electric vehicles (PHEVs). We do not envision the death of the ICE anytime soon. In fact we see 78% of vehicles sold in 2030 still have an ICE, many of which are partially electrified as hybrids.
Key Changes Relative Our 2017 Report: More Electrified Use Cases Coming to Fruition
While our 2017 report, Exploring the Future of Transportation,focused primarily on traditional transportation use cases such as on-road vehicles, our updated Primer explores the following new electrified use-cases: trucks, drones, delivery robots and electrified aircraft.
Advancements in the EV and AV spaces are paving the way for the aforementioned new mobility applications, many of which arose in response to COVID-19 and will likely play key roles in the dynamic e-commerce space. We also provide expanded battery and power electronics analyses given their importance in driving cost reduction
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