How will the car industry change by 2050?
Over the next decades we will witness a tremendous shake-up that will alter our approach to travel.
The switch from combustion engines to electric vehicles has already started. In the long run I expect that passenger cars will use only electric drivetrains.
The arrival of the first self-driving taxis will take place over the next three to four years. They will be the front runners of self-driving cars, as in the beginning, it is likely that the cost of the self-driving systems will be pretty high and we will need a defined area of operations.
Will the industry become less male dominated too?
Yes, of course. We have many female customers and I think the automotive industry is getting more attractive for women. In the long run we will have a much higher share of females in management positions.
What about the future for car companies?
We strongly believe in the future for cars. They might be electric and also autonomous, but they are still cars. In the end, you need a lot of experience to build a car and a lot of know-how. No one from the big tech companies has an interest in building a car, so I do not see our core business at risk.
Do you see a point when humans will no longer drive?
For a lot of people driving is fun and we make sure that this will continue. But for example negotiating through the traffic jams on your morning commute does not really belong to the fun part. This is where autonomous driving comes in. Instead of driving you can read your emails, or the newspaper, or give video conferences. So we will come to a point where you do not have to drive, but you can, if you want. This will change the way we experience mobility completely, especially in cities. Cities will be the place autonomous driving will happen in the first step, because that is where we will have very precise maps first.
Can we sleep in self-driving cars during a ride?
To sleep in your car you will need an autonomous car that can reach the autonomous driving level four – where it can perform all important safety critical driving functions – or level five – where it is equal to a human driver in all situations. Then it won't matter what you do as a passenger. And if you fall asleep, that's fine, it would just show how comfortable and relaxed the driving experience would be.
Will the car of 2050 still come with a plug?
Already today, we are preparing inductive charging for our upcoming electric cars. An electric car fitted with this technology merely has to be positioned over a charging coil in the ground to start the charging process fully automatically, with no need for cable contact. For some use cases, like fast charging systems, plugs might still make sense in 2050. But in that case I wouldn't expect that you would still have to plug in your car manually. By 2050 this should happen automatically.
That might be difficult for anyone who doesn't have off-street parking.
Absolutely. Setting up the charging infrastructures is a big challenge not only for the automotive industry but also for network providers and energy utility companies.
We can provide electric vehicles, but it's very important that the charging infrastructure across Europe is growing accordingly. This is one of the reasons we set up the IONITY joint venture together with VW, BMW and the Ford Motor Company, to build over 400 charging stations on the highways of Europe. In addition, we need similar efforts on behalf of the network providers and energy utility companies.
Recently, Shell invested to buy the electricity firm First Utility. What will these changes mean for the oil companies?
From my perspective it is a good opportunity for the oil companies to build up charging infrastructure because it is such a perfect fit for them to shift from selling gas and petrol to selling electricity. It would be an investment to secure their business. Petrol stations have many sources of revenue and charging could be an additional one.
What will we miss in 2050 looking back?
Nothing. The overall objective is to make travel more attractive to the customer. Autonomous driving means that we will have more time for ourselves, which we can spend for other things and not idling in a traffic jam. There will still be cars in 2050 where you can drive personally and we will make sure that you will enjoy the drive. Even traffic will not necessarily increase, because we're already working with cities to integrate our mobility solutions with public transport. For example we work on a ride sharing concept called moovel Flex Pilot, where we offer pooled and shared transportation, providing an ideal enhancement for public transport.
Isn't it strange to hear a car company talking about public transport?
Well, this is part of our strategy. We see ourselves as a mobility services provider operating around the world's cities and this will be one part of our business. The other part is of course still developing, producing and selling cars.
But we will also have an attractive offering for the customers who just want to buy mobility, not a car. That's the reason why we invented car2go, the biggest free-floating car fleet worldwide, and invested in mytaxi, the leading ride hailing company in Europe. We want to build a comprehensive mobility offering because we believe that this will be a big part of the future.
How will this switch take place?
We see our mobility offering as an ideal starting point for the future business of self-driving taxis. If you look at the situation today the availability and the cost of the drivers are the biggest challenges in the taxi business. With self-driving taxis you could address both topics in one go.
What is the time period for this public switch in mobility?
This switch is already happening right now. Our strategy is that we have to be as flexible as possible. Nobody can predict what the share of electric vehicles will be in five years' time. It will be different in different regions of China, Europe and especially the US.
It is the same with autonomous driving, no one can predict for sure, when it will take off.
But there is a famous saying, that the best way to predict the future is to shape it. With the innovations we will bring on the road in the next years, I am convinced that we will have an impact on the future development of the car industry and on mobility overall.
Just as an example, until 2022, we will launch at least 10 fully electric cars; in 2021 we will start the shared self-driving taxi services.
Does that mean selling fewer cars?
No, car sales are still growing. But we want to fully participate in this new market. And we are in a perfect position to do so. We have the car, we have the autonomous driving functionality, we have fleet management, we have the mobility solutions with mytaxi and moovel, we also have Daimler Financial Services as an asset provider. We actually cover the whole value chain to offer mobility services.
Wilko Stark has been Vice President of the Daimler and Mercedes-Benz Cars Strategy since 2013 and Head of CASE at Daimler since mid of 2017. Wilko's responsibility is to ensure Mercedes-Benz Cars' core business profitability and competitiveness by setting up an outstanding product and technology portfolio as well as pushing forward each CASE dimension (Connected, Autonomous, Service and Electric) and their intelligent combination into new, innovative and customer-oriented business models. He started his professional career at the Boston Consulting Group, where he spent eight years mostly serving clients from the automotive industry.