The changes we have seen over the past 10 years in urban consumer transportation preferences with the ascend of on-demand mobility services should have convinced OEM executive teams that significant transformations of their business are necessary. For some OEMs transformations will imply producing vehicles that are based on sophisticated technologies, such as self-driving cars. For others it wil imply the adoption of new business models. OEMs will start offering vehicle subscriptions and mobility services directly to consumers as a result of their transformation.
In my forthcoming book Transportation Transformation I define next-generation mobility as the intelligent movement of people and goods using automated (or autonomous), connected and electrified vehicles. Next-generation mobility is still in its infancy, but I predict it will unfold in three phases.
The automotive industry has survived many swings of feast and famine using a business model that is largely unchanged in a century. The industry has made a remarkable recovery in the decade since the Great Recession, with record sales and profits over the past five years. Yet despite this success, there is broad recognition something fundamental has changed and that focusing exclusively on the current business model is unwise.
In early November 2017, Waymo announced that while it will continue its tests in Washington, California, and Texas, it was ready…