Digital technology will radically change virtually every form of transportation, open new fields for innovation and transform how vehicles are manufactured.
Automakers are putting a firm foot on their transformation accelerator pedals, urged on by competition from high-tech companies such as Google and Apple. Connectivity on factory floors and freeways is also reinventing how vehicles are built as well as how drivers interact with their cars.
Intellias Inc. predicts that revenue from digital mobility services alone will reach more than $1.2 trillion by 2030, while worldwide car sales will actually start to decline during the same decade.
Nearly 45% of auto executives in a 2018 KMPG survey believed that today’s car owners no longer will want to own a personal vehicle by 2025.
Transportation officials in the United Kingdom estimate that since the mid-1990s the number of men aged 17-20 with a driver’s license dropped from more than 50% to less than 30%. A similar trend has been taking place in the United States where the number of 16-year-olds who applied for a license has dropped from more than 50% in the mid-1980s to about 16% today.
Digital technology is behind much of the change. Transportation trends include connectivity, electric vehicles (EVs), autonomous mobility services and smart manufacturing.
The global market for EVs is expected to continue on a steady growth curve throughout the 2020s. EVs, in fact, could account for more than half of all new vehicles sold by 2030. Growth will be driven by a combination of decreasing battery costs, new battery technologies, improved charging infrastructures, government regulations and incentives, as well as increasing customer acceptance.
Countries worldwide are setting ambitious EV sales targets. Europe has approved a ban on new gasoline car sales beginning 2035. By the end of 2022, EVs and hybrids already accounted for 43% of new-vehicle sales in the region.
The U.K. plans to spend more than $1 billion for EV infrastructure, more than $7.5 billion has been allocated in the U.S., and the European Union has committed nearly $300 million to set up 5,700 new charging points as well as 57 hydrogen refueling stations.
Three years ago, just 12% of all vehicles sold were equipped with embedded connectivity features that generated $1.5 billion in revenue. Those numbers are expected to grow exponentially in the coming decade.
Today’s rapidly expanding digital infrastructure also is contributing to the development of autonomous vehicles and supports a growing consumer interest in ride sharing. Not long ago, robo-taxis were considered a far-fetched science fiction scenario. Although safety concerns have somewhat dampened current interest in autonomous vehicles, the Boston Consulting Group predicts that 25% of all miles driven in the U.S. could be in shared, autonomous EVs by 2030.
Digital technology is fueling everything from high-risk “moonshot” projects such as urban air-mobility solutions and self-driving commuter shuttles to more grounded programs for fuel-management systems, as well as fleet- and smart-parking-management software.
In addition, robotics, artificial intelligence (A.I.) and other data-driven technologies are bringing sweeping changes to manufacturing plants around the world.
Pandemic-fueled changes in work habits and recent supply-chain problems have hurried a move to data-driven production processes supported by machine learning, A.I., time-sensitive networking and collaborative robotics.
“We are standing at the cusp of a fourth industrial revolution driven by exponential growth in IT technologies,” says Sudhanshu Gaur, a Hitachi America LTD vice president and chief architect. “There is a great opportunity for manufacturers to embrace these changes and unlock greater business value while bringing more flexibility and resiliency into their operations.”
Hitachi Astemo’s nearly 140 manufacturing plants around the world are benefiting from access to Astemo’s global IoT (Internet of Things) platform and services, Gaur notes.
Digital platforms have the ability to connect all aspects of manufacturing operations, including production, engineering, quality, inventory and supply chain management. Digital platforms introduce additional flexibility into the production process and allow companies to more quickly deal with disruptions due to volatility, uncertainty, complexity and ambiguity.
Fully automated plants are more efficient, but they also pose risks because tightly linked systems generally aren’t designed to handle unpredictability, complex situations and rare events. The gradual adoption of advanced digital technologies provides the best way forward, bringing necessary automation where needed, while upskilling the workforce to manage and leverage these complex systems.
The changeover to a digital platform in manufacturing comes with a price tag, although future savings can be substantial. While costs vary depending on location and a variety of other factors, the cost for a data-driven system at a medium-size U.S. manufacturing plant with 1,000 employees and annual sales of $200 million might total $20,000 in one-time implementation charges with annual running costs of $60,000 or more, according to industry estimates.
The cost for a much larger global enterprise with about 100 plants, 60,000 employees and annual sales of $10 billion to implement a fully digital platform could total $1 million or more in one-time charges with more than $3 million in annual running costs.
The successful implementation of smart manufacturing strategies involves different layers of the Industrial Internet of Things, including fog computing and edge intelligence, as well as 5G and cloud computing.
Source list: Accenture: Mobility as a Service; KMPG Global Automotive Executive Survey; University of Michigan: Recent Decreases in the Proportion of Persons with a Driver’s License; Los Angeles Times: Ridesharing Forces Automakers to Rethink How They Sell Cars; Global Data: Electric Vehicles, KMPG: Mobility 2030 - The Future of Mobility; Deloitte: Carsharing in Europe; McKinsey: How Shared Mobility Will Change the Automotive Industry; and BCG: By 2030, 25% of Miles Driven in U.S. Could be in Shared Self-Driving Electric Cars.
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