• News
  • Guides
  • Reviews
  • Media
  • About
  • News
  • Guides
  • Reviews
  • Media
  • About
Sign up Now (For Free)

Sign up for our newsletter and receive the latest automotive news in your inbox!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.
Thanks for subscribing!
News
Read Now
  • All News
  • Automakers
  • Automobiles
  • Auto Shows
  • Business
  • EVs & Environment
  • Guides
  • Lawsuits/Legal
  • Regulatory
  • Ride-Sharing
  • Safety & Recalls
  • Technology
Recent
  • Automakers Scrambling to Ensure They Qualify for New EV Tax Credit
  • Rivian Adding Second Shift to Hit 25K Production Goal
  • With Auto Thefts Up 8%, Trucks Most Stolen Models
  • The End Comes for the Mercedes-Benz Metris
  • GM Loses Appeal of Conspiracy Lawsuit Against FCA
  • National Average for Gas Drops Below $4 a Gallon
  • Worker Killed at GM’s Orion Assembly Plant
  • Heritage Edition Bronco: A Horse of a Different Color
  • First Look: 2023 GMC Canyon
  • Automakers Cheer as Biden Signs $52B CHIP Bill
Editor’s Choice
    Reviews
    Read Now
    • All Reviews
    • Classic Cars
    • Concept Cars
    • Convertibles
    • Coupes
    • Crossovers/CUVs
    • Diesel
    • Hot hatches
    • Hybrids
    • Luxury Vehicles
    • Minivans
    • Muscle Cars
    • Pickups
    • Sedans
    • Sports Cars
    • Super Cars
    • SUVs
    Recent Reviews
    • A Week With: 2022 Hyundai Ioniq 5 Limited AWD
    • A Week With: 2022 Mercedes Sprinter 2500 Cargo Van
    • A Week With: 2022 Toyota RAV4 Prime XSE AWD
    • A Week With: 2023 Kia Sportage Hybrid EX AWD
    • A Week With: 2022 Volkswagen Golf GTI 2.0 Autobahn
    • A Week With: 2022 Infiniti QX60 Luxe AWD
    • First Drive: 2023 Genesis G90
    • A Week With: 2022 BMW M4 Competition xDrive Convertible
    • A Week With: 2022 Jaguar F-Pace R Dynamic S
    • A Week With: Genesis GV70 3.5T AWD Sport Prestige
    Editor’s Choice
      Guides
      Car Warranty
      • Endurance Warranty Reviews
      • BMW Extended Warranty
      • Extended Warranty For Cars Over 100k Miles
      • Extended Car Warranty Cost
      • Subaru Extended Warranty
      • CarShield Reviews
      • CarShield Cost
      • Aftermarket Car Warranty
      • CARCHEX Warranty Reviews
      • Reputable Extended Car Warranty Companies
      • Used Car Warranty Companies
      • Best Car Warranty
      • Is CarShield A Scam?
      • Mercedes Extended Warranty
      • CarShield Plans
      Insurance
      • How To Identify A Car Insurance Company
      • Geico Mechanical Breakdown Insurance
      • How Far Back Does A Car Insurance Company Look
      • Mechanical Breakdown Insurance For Used Cars
      • State Farm Mechanical Breakdown Insurance
      • Mechanical Breakdown Insurance From Progressive
      • Dollar A Day Insurance
      • Auto Insurance For SSI Recipients
      • Car Insurance Rates After A Suspended License
      • Auto Insurance For Salvage Vehicles
      • Average Cost of Dodge Ram 1500 Car Insurance
      • Car Insurance Florida
      • Full Coverage Auto Insurance
      • GrubHub Insurance
      • Amazon Delivery Auto Insurance
      Shipping
      • Car Shipping Companies
      • uShip Reviews
      • Auto Shipping From California To Hawaii
      • Montway Auto Transport Reviews
      • Cheap Car Shipping
      • Easy Auto Ship Reviews
      • Auto Shipping Miami
      • Auto Shipping To Alaska
      • Car Shipping Cost
      • Auto Shipping Hawaii
      • Auto Shipping Puerto Rico
      • Sherpa Auto Transport Reviews
      • Auto Shipping Atlanta
      • Auto Shipping Boston
      • Auto Shipping. Chicago
      About
      • About Us
      • Contact Us
      • Terms of Use
      • Privacy Policy
      • Affiliate Disclosure
      • Sitemap
      TheDetroitBureau.com

      More than just “another” place to find news, reviews, spy shots, commentary, features, and guides about the auto industry. TheDetroitBureau doesn’t stop with the press releases or confuse a few lines of opinion with insightful, in-depth reporting.

      Contact Us

      Like what you see? Have some ideas for making The Detroit Bureau.com even better? Let us know, we’d love to hear your voice.

        Media
        Listen Now
        • Headlight News: All Episodes
        More from TheDetroitBureau
        • Guides
        • Latest News
        • Auto Reviews
        • Podcasts
        Headlight News

        TheDetroitBureau.com’s Headlight News offers a look at the past week’s top automotive news stories, as well as what’s coming up in the week ahead. Check out the week’s top story and our latest review…along with a dive into the past with this week in automotive history.

        home > news > Automakers > Traditional Automakers Could Be Left Out in the Cold By the Rise of Electric and Autonomous Vehicles

        Traditional Automakers Could Be Left Out in the Cold By the Rise of Electric and Autonomous Vehicles

        Ride-sharing services could turn car manufacturing into a low-profit commodity business, says new study.

        Paul A. Eisenstein
        Paul A. Eisenstein , Publisher & Editor-in-Chief
        Jan. 11, 2018
        Waymo is already testing autonomous ride-sharing vehicles and will soon add fully driverless ones.

        A century of growth seems likely to come to a screeching halt for the global auto industry, and that spells potentially serious trouble for major automakers, according to a new study – though the report also anticipates big opportunities for ride-sharing services.

        It is widely expected that the auto industry will go through more radical changes in the coming decade or so than it has since Henry Ford fired up his first moving assembly line. Among other things, the report by the Boston Consulting Group, or BCG, anticipates that electrified vehicles will soon become commonplace, while millions of motorists in the U.S. and abroad will switch from owning a car to relying on ride-sharing services like Lyft and Uber.

        /about/subscribe
        The Future is Now!

        So, while global auto sales will continue to grow to around 108 million annually, “We will (then) reach a plateau around 2029 or 2030,” forecast Thomas Dauner, the head of the auto practice at BCG. “An industry that has been growing over the past century will stop.”

        That alone might spell big trouble for traditional automakers – OEMs in industry parlance. But that’s only the beginning of the challenges that could threaten their very survival, the new report warns.

        (A substation on every corner? Mass EV charging presents unique challenges. Click Here for the story.)

        Toyota CEO Akio Toyoda introduces the e-Palette, a driverless shuttle set to go into pilot use during the 2020 Tokyo Olympics.

        The study looked at the various changes that are widely forecast to change the way people travel by car, notably the coming of electrified vehicles, the debut of autonomous and fully driverless cars, and the emergence of ride-sharing as a significant alternative to private vehicle ownership.

        Today, only about 3% of the new vehicles sold worldwide use some form of battery propulsion, from hybrids to fully electrified powertrains, but BCG anticipates that will reach 67% by 2035. The “tipping point,” said Dauner, will come early in the 2020s as the price of batteries drops to the point when those vehicles will be competitive with models using conventional, internal combustion engines.

        That overlaps with the debut of self-driving vehicles that are expected to account for around one in four of the vehicles on the road by 2035. Robocabs alone will make up about 9% of vehicle sales by then, forecast BCG.

        Fully driverless vehicles operated by ride-sharing services are expected to become commonplace in the world’s cities by then. And because they will slash operating costs they’ll become cheaper to use than owning and operating a vehicle for many consumers, said Dauner.

        So, in many cases, motorists will cut back on the number of vehicles in the household fleet – today averaging about 2.4 cars per household in the U.S. – or abandon ownership entirely. By 2035, “about 20%” of the miles that Americans travel by automobile will be in driverless ride-sharing vehicles, forecast the BCG study.

        GM's new car-sharing service, Maven, is expanding its operations in New York City by adding 80 vehicles.

        A lot of money is at play as a result of this transformation. Today, the car-based mobility industry generates revenues of around $3.7 trillion annually worldwide, a figure expected to grow to $5.8 trillion by 2035.

        (Click Here for more about BCG’s prediction that 50% of vehicles will be electrified by 2030.)

        But sales of conventional new vehicles will actually tumble over the coming two decades, the study noted, as will a number of other traditional lines of business such as aftermarket sales and service. That reflects the fact that electric vehicles will need less repairs and services like oil changes.

        Sales of electrified vehicles will surge, but so will other new areas of business, especially for on-demand mobility. By 2035, “mobility on demand,” a fancy way of saying ride-sharing services, will generate an estimated $76 billion annually, or about 25% more income than the manufacturing of traditional vehicles.

        Meanwhile, the companies that produce autonomous and electrified vehicle components – firms like NVIDIA, Delphi, Waymo and Continental – will be generating as much or more revenues than the carmakers that today dominate the business.

        Unless they can rethink their business equation, OEMs such as General Motors, Volkswagen and Toyota could find themselves commoditized and struggling for every penny.

        A few manufacturers have recognized the challenges they face, Dauner noted. GM, for one, is trying to build a new business model that takes into account autonomous and electrified vehicles. The Detroit giant has even set up its own sharing service, Maven. Volkswagen and Daimler AG, the parent of Mercedes-Benz, have also been looking for ways to maintain control as new technologies come to market and motorists by the millions shift to ride-sharing services.

        “They are making some very serious strategic decisions,” said Dauner.

        Automakers aren’t the only ones who have to rethink mobility in the years ahead, the new study emphasizes. Governments around the world will have to decide what role they play in determining transportation policy.

        (To see more about GM’s strategies for ride-sharing and driverless tech, Click Here.)

        “The question is whether they will be fast enough or bold enough” to adapt to the coming changes, said Dauner.

        How to Care for Your Car

        Cheap Car Warranty

        Editor's Choice

        Best Extended Car Warranty

        Editor's Choice
        Recently Published
        General Motors Chair and CEO Mary Barra confirmed during her 2022 CES keynote address that Chevrolet will launch the Chevrolet Equinox EV in the 2024 model year.

        Automakers Scrambling to Ensure They Qualify for New EV Tax Credit

        Yesterday
        Rivian line at Normal plant

        Rivian Adding Second Shift to Hit 25K Production Goal

        Yesterday
        Car thief NICB

        With Auto Thefts Up 8%, Trucks Most Stolen Models

        Yesterday

        One response to “Traditional Automakers Could Be Left Out in the Cold By the Rise of Electric and Autonomous Vehicles”

        1. veh says:
          January 12, 2018 at 2:46 pm

          Nope. Too many variables at this point to predict anything

          Reply

        Leave a Reply Cancel reply

        Your email address will not be published. Required fields are marked *

        Share this article:
        © The Detroit Bureau 2022
        • Guides
        • Privacy Policy
        • Terms of Use
        • Affiliate Disclosure
        • Contact Us
        • Sitemap
        Follow Us: