The Future of MobilityImpacts of Evolving Vehicle Technology Transitions on Suppliers

January 21, 2020

Daron GiffordPartner, Plante Moran

About Plante Moran

2

95Years serving

clients(founded in

1924)

21Years on

FORTUNE’s Best Workplace list

39,000Professionals

worldwide

2,500+Manufacturing &

distribution clients

Wide Range of

Professional Services

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Transaction Advisory Services

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Wealth Management

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Investment Banking (PM Corporate Finance)

Real Estate Development (Plante Moran CRESA)3,200+In U.S.

Mobility

Intelligence

CenterResearch on

Critical Information for Mobility

Technologies to OEMs, Suppliers and New Entrants

Case Study: Disruptive Technology

3

4

2 Mobility – “sharing”

1 Autonomous

3 Electrification

4 Manufacturing the Vehicle

Where is the Automotive Industry Going? Integration of Technologies will Drive Mobility Futures

5

Mobility DriversEconomics Change the Transportation Business Model

Shared MobilityPrivate Vehicle Ownership

Today Future

New “Mobility”

Business Model

1. Extended Vehicle Life:

• Enabled by enhanced engineering,

advanced materials and manufacturing

• Metric – kilometers traveled

2. Vehicle Uptime (Availability):

• Enabled by rigorous preventative

maintenance discipline

• Metric – % availability (uptime)

3. Vehicle Utilization:

• Enabled by matching riders with

vehicles – right place, right time

• Metric – % of day vehicle is utilized

Vehicle Price Asset Efficiency

Buying Vehicles Buying Miles

6

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050

Veh

icle

Miles

Tra

vele

d (

Billio

ns)

Private - Autonomous Shared - AutonomousNon Autonomous

Vehicle Type Key

-

50

100

150

200

250

300

350

2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050

Veh

icle

Parc

(M

illio

ns)

-

5

10

15

20

25

2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050

Veh

icle

Sale

s (M

illio

ns)

Vehicle Miles Traveled Vehicles in Operation (VIO)

Annual New Vehicle Sales

Autonomous + MobilityProjections for U.S.Personal miles traveled drives volumes• Testing and prototyping environments are still growing rapidly – over 1,400 vehicles by 80+ companies in 36

states

• Lack of national policy is slowing progress for now, but private sector is pushing forward

7

Future Mobility Business ModelDramatic Reordering of the Automotive Value Chain

Manufacturing, MaaS, Mobility Operations and Energy Management will all be required

to enable the future mobility industry, as well as to be tightly integrated

Vehicle Manufacturing “Value Chain”(including Engineering)

MaaS and Mobility Operations

Ownership

& Financing

Vehicle

Owners• Fleets

• Private

• Fractional

Financing• Loans

• Leases

• Subscription

• Pay per mile

Insurance• Personal

• Vehicle

• Ride

Mobility Services Provider• Pay per ride/sharing

• Freight/package service

• Specialized mobility services

• Mobility technology broker/interface

Connectivity• V2V communications

• Telecommunications access

• Vehicle data – OTA updates, monitoring

• In-vehicle infotainment services

Mobility Operations Services• Vehicle maintenance and repair

• Vehicle staging – cleaning, charging,

storage

• Vehicle roadside assistance

• Passenger biometrics support

Mobility Infrastructure• Parking location, availability, price

• Traffic flow, route optimization

• Vehicle to infrastructure (SmartCity)

Energy

Manageme

nt

• Battery pack/

cell production

and raw

materials

• Battery

financing

• Charging

infrastructure

manufacturing

and installation

• Energy storage

and discharge:

• V2G

• 2nd use

batteries

• Battery

recycling

Key Vehicle Manufacturing Characteristics

• Utilitarian styled vehicles

• Common platform architectures

• Modular design for component replacement

• High volume production for cost efficiencies

• Electrified powertrains

• Autonomous capability

• Connected technology

Powertrain –

ICE and EVChassis Interiors Exteriors

Electronics &

AutonomousOther

Systems/components

8

Business Opportunities in MobilityFuture Revenue Streams

MaaS, Mobility Operations, Energy Management, and Manufacturing will increase enormously from

transportation shifts in autonomy, mobility, electrification and manufacturing of vehicles

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2017 2022 2027 2032 2037 2042 2047

Reven

ue (

$B

)

MaaS

(Operating, Ownership, Financing, Data)

$-

$100

$200

$300

$400

$500

2017 2022 2027 2032 2037 2042 2047

Reven

ue (

$B

)

Mobility Operations

$-

$100

$200

$300

$400

$500

$600

2017 2022 2027 2032 2037 2042 2047

Reven

ue (

$B

)

Energy

Management

Manufacturing

(including engineering)

$-

$100

$200

$300

$400

$500

$600

$700

2017 2022 2027 2032 2037 2042 2047

Reven

ue (

$B

)

9

By 2050, disruptive changes in the industry will drive significant shifts in how transportation is consumed

New Vehicle

Sales

$610B

Used Vehicle

Sales

$685B

Gas/Diesel/

Electricity

$254B

Insurance

$234B

Financing

$120B

Repair/

Maintenance

$72B

Public Transit/

Car Rental/Taxi

$119B

Mobility as a

Service (MaaS)*

$27B

Other

$271B

2017

$2.4

Trillion

New Vehicle

Sales

$625B

Used Vehicle

Sales

$679B

Gas/Diesel/

Electricity

$209B

Insurance

$253B

Financing

$119B

Repair/

Maintenance

$79B

Public Transit/

Car Rental/Taxi

$117B

Mobility as a

Service (MaaS)*

$176B

Other

$255B

2027

$2.5

Trillion

Minimal Change

New Vehicle

Sales

$867B

Used Vehicle

Sales

$165B

Gas/Diesel/

Electricity

$189B

Insurance

$173B

Financing

$153B

Repair/

Maintenance

$233B

Public Transit/

Car Rental/Taxi

$17B

Mobility as a

Service (MaaS)*

$3.4T

Other

$590B

2050

$5.7

Trillion

Large Growth

Shifts

*Mobility as a Service (MaaS) – only includes transportation revenue miles. Other mobility revenue streams included in Other.

Transportation Spending – U.S. ProjectionsRadical Redistributions in the Mobility Business Model Revenue

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Transportation MaaS Spending IncreasesDriven by Personal Consumption and Commercial Use

Mobility as a Service (MaaS) to experiences Massive GrowthAutonomy allows personal transportation to shift from private vehicle ownership to “buying

kilometers” for travel, in highly utilized shared fleet vehicles of multiple configurations (1-10+

passengers)

2017 2050

2017 2050

2017 2050

2017 2050

1% of Spend63% of

Spend

$610B

$867B

$685B

$165B

$72B

$233BRepair and Maintenance Cost IncreasesScheduled preventative maintenance will be required to support high vehicle utilization and service,

increased vehicle life longevity and expedited repairs

New Vehicle Sales and Production IncreaseHigher vehicle utilization accelerates vehicle life span, increasing vehicle turnover and resulting in

shorter replacement cycles of 3-4 years

Used Vehicle Sales DecreaseShared fleet vehicles are driven to the end of maximum useful life, then retired from operation;

eliminating much of the secondary market for resale

$27B $3.4T

11

Vehicle Technology - Electrification

Evolution of the Powertrain

• Converging disruptions (autonomy, sharing and powertrain efficiency) will increase the pace

of adoption of electrification

• Powertrain components will transition to EV specific technology over time, eliminating the

need for ICE products throughout the vehicle

Onboard charging

moduleDC/DC converter

Inverter

Traction motor

Battery

packFuel system

Air intake systemExhaust

system

Transmission

ICE Powertrain Components EV Powertrain Components

Market ShiftsInternal

combustion

engineTurbocharge

r

Gearbox

12

21.4 21.0

13.3

3.3

0.1 0.2

0.7

1.4

0.3 0.7

2.6

5.1

0.6 1.4

7.6 15.2

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2020 2025 2030 2035

Mill

ion

s

BEV / BEV Rex PHEV/HEV 48v PHEV/HEV 400V ICE

24.5 25.0

18.7

5.3

0.1 0.1

0.6

1.1

0.6 0.9

4.2

8.1

1.5 2.6 8.9

20.5

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2020 2025 2030 2035

Mill

ion

s

BEV / BEV Rex PHEV/HEV 48v PHEV/HEV 400V ICE

15.8 15.3 14.6 13.2

- 0.0 0.0 0.0

0.7 1.2 2.2 3.6

0.4 0.8 1.3 3.5

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2020 2025 2030 2035

Mill

ion

s

BEV / BEV Rex PHEV/HEV 48v PHEV/HEV 400V ICE

26.9 28.0 27.6 26.1

1.0 0.9 1.3 2.0 0.9 0.9 1.3 1.9 0.2 0.3 1.1

2.4

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2020 2025 2030 2035

Mill

ion

s

BEV / BEV Rex PHEV/HEV 48v PHEV/HEV 400V Nissan E-Power/Note ICE

China Production Volumes Europe Production Volumes

North America Production Volumes

Source: Plante Moran/AFS

ROW Production Volumes

(includes Japan, Korea)

Electrified Vehicle Production – by RegionChina and Europe lead the way

19%

19%

2020-2035

CAGR

BEV/ BEV Rex

PHEV/HEV 48V

PHEV/HEV 400V

17%

-10%

ICE

26.7M28.6M

32.4M

35M

25%

17%

2020-2035

CAGR

BEV/ BEV Rex

PHEV/HEV 48V

PHEV/HEV 400V

24%

-12%

ICE

22.5M 23.3M 24.1M 25M

16.9M 17.3M 18.1M 20.3M15%

12%

2020-2035

CAGR

BEV/ BEV Rex

PHEV/HEV 48V

PHEV/HEV 400V

1%

-1%

ICE

29M 30.2M 31.4M 32.4M

19%

5%

2020-2035

CAGR

BEV/ BEV Rex

PHEV/HEV 48V

PHEV/HEV 400V

5%

-0.2%

ICE

-0.2%Nissan E-Power/Note

Evolution of the Automobile Chassis

Changing Requirements to be Common, Modular

Skateboard

Skateboard

Skateboard

Pickup Application

SUV Application

Shuttle Bus Application

Electric Vehicle Skateboard ChassisICE Chassis

• Vehicle differentiation requirements for end customers decline

• Utilitarian applications provide broader, common customer experience through autonomous,

shared, electrified vehicles

Variable Skateboard

Applications

14

Evolution of the Interior Space

Shifting Expectations of the User Experience

• Interior focus still in the cockpit, but with more technology available

• Interior physical features highly streamlined

• Interior design is used to differentiate their vehicles in the market

2025 and Beyond“Autonomous and Shared”

2020 – 2025“Personalized and Connected”

2015 – 2020Current Interiors

2000 – 2015Traditional Interior of the Past

• Interior is the “3rd living space”

• Interior maximizes user enjoyment and satisfaction through their experiences inside – air, light, touch

2008 Chevrolet Trailblazer SS 2018 Chevrolet Equinox Mercedes-Benz F 015 Luxury in Motion Concept2018 Tesla Model 3 Featuring Next Gen Design / Technology

• Cockpit focus to layout of the interior

Evolution of the ExteriorDesign Changes Resulting from Mobility

Mercedes Benz Concept

Navya Autonomous Cab

SMART Pod Concept

Autonomous, shared, electrified vehicles will be more “utilitarian”

Utilitarian Design for Functionality

• Vehicle ownership will transfer from personal owners to fleet owners

and exterior differentiation could be less of a factor in vehicle

designs

• Emphasis will be on “interior” differentiation

• 3rd Living Space (home, work, vehicle)

Size Variations

• Vehicles transporting “one individual” could be smaller

• Multi-individual vehicles could be larger

Mixed Materials

• Increased safety resulting from Autonomy drives fewer collisions and

more safety

• Exterior materials shift to a variety of materials, including carbon

fiber and composite plastics - frequency of collisions dramatically

decreases

Today

Current State

Transportation

Model Vehicles produced

Value

Proposition to

Customer

Customers

Product

Design

Research

Development &

Engineering

Manufacturing

Future

Miles driven

Private owners “MaaS” fleet operators

Differentiated, personalized

products, Commodity product, convenience,

availability

Platform architectures requiring major

redesigns in 7-8 year development cycleSkateboard platforms requiring refresh

designs in 2-3 year development cycles

OEMs internal RD&E is duplicative and

costly; viewed as a market differentiator

OEMs depend on RD&E for innovation

with proven, capable suppliers

Manufacturing is core competency with

OEM control of end-to-end processes

OEMs focus on mobility and customer

experience. More responsibility of vehicle

manufacturing shifts to suppliers

Evolution of Manufacturing Business ModelManufacturing and Supply Relationships will Radically Change

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“Create Strategic Vision”

Plante Moran’s Structured Approach to Strategic Planning

“Plan and Implement”

Transitioning for TechnologyStrategies for Meeting the Mobility Future

Contact Information

Daron Gifford

Partner

Strategy and Automotive Industry Consulting Leader

daron.gifford@plantemoran.com

+1 248-223-3709

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