PEAK CAR? Mårten Levenstam Vice President. Vice President. Product Planning October 8th September 2nd 2014

Transcription

1 Energy Efficient Transportation, Volvo Car, M. Levenstam 1 PEAK CAR? Mårten Levenstam Vice President ENERGY Product Planning EFFICIENT TRANSPORTATION September 2nd 2014 Mårten Levenstam Vice President Product Planning October 8th 2013

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8 Energy Efficient Transportation, Volvo Car, M. Levenstam 8 SO FAR NO INDICATIONS OF PEAK CAR IN SWEDEN Not so interesting to debate, more important is how we would like our future to be Source: Bil Sweden

9 Energy Efficient Transportation, Volvo Car, M. Levenstam 9 WE NEED TO HAVE A GLOBAL PERSPECTIVE, NOT A EUROPEAN One of the largest migrations in history, not geographic but demographic The world is moving in the right direction Income per capita is improving Health is improving People are migrating into the middle class The change is not without problems We need to participate in the shaping of our future Source: Gapminder Forecast of future new car registrations Source: Polk

10 Energy Efficient Transportation, Volvo Car, M. Levenstam 10 CARS ARE GETTING BIGGER, CLEANER, SAFER & CHEAPER The industry excels in rationalization and is extremely competitive

11 CAR GET CHEAPER, PUBLIC TRANSPORTATION MORE EXPENSIVE 345 SL Monthly tickets for a car in 1973, only 100 required in VW 1303 (1973) SEK 4.1 m 50 hp 10.5 l/100 km SEK 345 SL Cards SL Monthly ticket (1972) 352 SEK 50 SEK 4.70 SEK / single ticket Dacia Sandero (2014) SEK 4.1 m 75 hp 5.8 l/100 km 100 SL Cards SL Monthly ticket (2014) 790 SEK SEK / single ticket Energy Efficient Transportation, Volvo Car, M. Levenstam Source: Spårvagnsmuseet, SL, Dacia Web page, Klassiker, SCB 11

12 Energy Efficient Transportation, Volvo Car, M. Levenstam 12 WHAT MAKES THE CAR INDUSTRY SPECIAL? What is driving the car development? Society, Customers or Companies?

13 Energy Efficient Transportation, Volvo Car, M. Levenstam 13 THE PROFIT MARGINS IN AUTO INDUSTRY ARE VERY SMALL An example of almost perfect competition Typical Automotive OEM value chain.

14 INFLATION IN MANY DIMENSION IS DRIVEN BY COMPETITION No one wants to be big, but everyone tries to avoid being smallest Many attributes of cars are growing, an inflation Size is one prime example, all cars are growing But, size is actually troublesome it drives cost and weight Why this development? All players are trying to avoid being the smallest Result of this is size inflation Source: blogs.automotive.com/car-sizes-through-the-years-infographic html Source: JATO Energy Efficient Transportation, Volvo Car, M. Levenstam Source: blogs.automotive.com/car-sizes-through-the-years-infographic html 14

15 CAR INDUSTRY GAVE UP TAIL-FINS, V8 S AND CHROME A pragmatic non-emotional business driven development Energy Efficient Transportation, Volvo Car, M. Levenstam 15

16 Energy Efficient Transportation, Volvo Car, M. Levenstam 16 CO 2 IS A COMPETITION, NOT A GREEN MARKET Majority of customers focus on money not on CO2

17 GAME THEORY IS NEEDED TO UNDERSTAND WHAT S GOING ON Due to competition one can not just look at one self In a competition one need to put one self in the shoes of the competitor Nash equilibrium No player has anything to gain by changing only their own strategy unilaterally Why have CO 2 emission been lowered? Coordination Game Two stable Nash equilibriums Do not care about CO 2 Care about CO 2 All players need to agree on which strategy to focus on - Coordination An announcement of legislation moved all players from Do not care to Care about CO 2 Source: ICCT European Vehicle Market Statistics Energy Efficient Transportation, Volvo Car, M. Levenstam 17

18 WHAT HAS HAPPENED THE LAST YEARS? CO 2 is reduced, but cars are getting bigger, better and more powerful CO 2 is reduced significantly, but not through downsizing Source: ICCT European Vehicle Market Statistics Energy Efficient Transportation, Volvo Car, M. Levenstam 18

19 ALTERNATIVE FUELS MARKET IS DRIVEN BY INCENTIVES Swedish ethanol market disappeared when taxation changed Consistency over time and a long term commitment is needed Huge investments in Products and Infrastructure If incentives are introduced they need to have a long term plan Both in terms of entry and exit from market The regulators actually steer the market, huge responsibility Source: ICCT European Vehicle Market Statistics Energy Efficient Transportation, Volvo Car, M. Levenstam 19

20 A UNILATERAL CHANGE IN STRATEGY AT WRONG TIME IS COSTLY 2 Examples of good products at wrong time. Estimated loss: 4.7 Billion AUDI A2, 1999 SMART, 1998 Source: Euro Autos: The 10 most loss making cars of modern times (or what happens when it all goes wrong), Bernstein Research Energy Efficient Transportation, Volvo Car, M. Levenstam 20

21 Continued urbanisation Growing number of megacities Air quality major health issue Traffic accidents huge global health problem Desire for constant connectivity Desire for individual mobility Transition to sustainable fuels/energy Energy Efficient Transportation, Volvo Car, M. Levenstam 21

22 AUTONOMOUS DRIVE WILL CHANGE THE FUTURE OF CARS Self driving cars will have huge impact on how we look upon cars Energy Efficient Transportation, Volvo Car, M. Levenstam 22

23 Energy Efficient Transportation, Volvo Car, M. Levenstam 23 The technology Camera Radar Laser Map data Cloud connection Traffic Control Centre

24 Energy Efficient Transportation, Volvo Car, M. Levenstam 24 The pilot 100 Volvo cars to selected leasing customers between Autonomous Driving (driver not supervising the drive) at selected roads Approx. 50 km around Gothenburg Autonomous parking