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Fast and Furious

Why making money in the roboconomy is getting harder

OEMs, suppliers, and dealers will see their share of industry profits cut to just half, from a current 85% share, by 2030 as the digital auto revolution creates intense competition and squeezes margins. Chief executives will have to make tough choices between becoming “thin specialists” or going broad in the mobility market.

Yes, mobility is a $2.2 trillion opportunity, but it will halve today’s players’ share of profits

  • Yes, the future of mobility is a US$2.2 trillion opportunity — but ...
    • The digital auto revolution toward a shared/autonomous scenario is sparking intense competition, a margin squeeze, and high capital expenditure
    • Competition, technology, and scale will drive down the average cost-per-kilometer for using shared transport to <50% of today’s levels
    • That will reduce by 10% the amount that consumers spend on mobility by 2030
    • In the growing shared/autonomous/fleet-based segment of the market, OEMs, suppliers, and dealers in the U.S. and E.U. will see their share of industry profits cut in half from 85% in today’s owner/driver/retail model
    • Automotive markets in the U.S. and E.U. will contract as a result, forcing consolidation of OEMs and suppliers
  • All this will be propelled by unstoppable trends
    • By 2030, up to 37% of kilometers traveled will be done by shared and autonomous (and sometimes pooled) vehicles
    • Households buying premium vehicles in mature transport markets will spend ~$3,800 per annum on shared mobility
    • The full shared mobility market — shared fleets, vehicle pooling — will be worth about the same as today’s global e-commerce market
    • In 2030, shared mobility will be hypercompetitive and regional/local, involving OEMs, digital tech firms, city councils, utilities, transport authorities, logistics, and e-commerce fleets

Playing in this space requires a reconfiguration of OEMs’ strategies

  • OEMs need to fix their strategies and align with shareholders
    • Shared mobility is barely profitable today, and full autonomy will come by 2027 at the earliest
    • Large amounts of high-risk capital are required to fund growth of autonomous fleets and customer acquisition
    • OEM boards need to choose between:
      • (1) leaving the field to emerging “carriers” — fleet operators, mobility platform players — and becoming “thin specialists/design shops” and
      • (2) making a big commitment to penetrating the mobility market, finding new investors, and running a new diversification strategy
    • Whichever is chosen, OEMs will face a talent squeeze as software and Internet firms expand research and development by 15% year-on-year

01 Autonomous & electric & connected: By when?

Electric to grow strongly beginning in 2025, autonomous level 4/5 to become mainstream after 2028, niches such as robotaxis to proliferate sooner

02 Scale and impact of mobility … and growth of the roboconomy

Mobility choices for consumers continue to expand and multiply fast

03 Industry profits reshaped by the roboconomy

The roboconomy creates opportunity on three levels to earn money

04 Imperatives for the OEM — organizing for success in services

OEMs need to provide tightly coupled hardware and services to fulfill customer expectations

05 Outlook: Flying cars and tunnels on the horizon

The future may yet be very different as mobility takes new forms

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Jonas Seyfferth

Jonas Seyfferth

Director, Strategy& Germany