The future of mobility and transportation is rapidly evolving, as more companies join the rush to create sustainable and accessible modes of high-speed, electrical transport options for people and goods.
Technology is also fundamentally transforming how consumers interact with mobility. Transformation is being driven by three independent trends:
- the emergence of affordable electric vehicles
- the development of autonomous vehicles
- and the growth of modernized ride sharing.
When integrated, these trends create a transportation model that utilizes a fleet of autonomous, electric vehicles that are not privately owned to provide cheaper, safer, and “greener” travel to more consumers, more often. The potential economy-wide disruptions caused by this transportation system are enormous.
- How will car manufacturers adapt when vehicle sales plummet as shared, autonomous vehicles increase vehicle utilization and provide greater mobility with a fraction of the number of cars currently on the road?
- How will oil companies react to falling oil demand caused by the increased adoption of electric vehicles?
- What are the income inequality ramifications of significantly increased disposable income?
- How will governments deal with large increases in unemployment as autonomous cars replace professional human drivers?
Before disruption occurs, leaders must be prepared to usher communities and organisation through a phase of transformational change; but change is hard.
That said, there are a few pioneering brands that are a cut above the rest and driving massive transformation in the sector.
Lilium – accelerating the decarbonization of air travel
Lilium is a German company focused on developing electric vertical takeoff and landing vehicles (eVTOLs) that can be used to offer air taxi services. The company went public in September 2021 through a special purpose acquisition company (SPAC) deal, raising more than $800 million.
Using the Lilium Jet, an all-electric vertical take-off and landing jet, offering leading capacity, low noise and high performance with zero operating emissions,. Working with aerospace, technology and infrastructure leaders, and with planned launch networks announced in Germany, the United States and Brazil, Lilium’s 750+ strong team includes approximately 450 aerospace engineers and a leadership team responsible for delivering some of the most successful aircraft in aviation history. Founded in 2015, Lilium’s headquarters and manufacturing facilities are in Munich, Germany, with teams based across Europe and the U.S.
Daniel Wiegand (current co-founder and CEO) and his co-founders launched the company in 2015, designing and proving out a novel eVTOL jet architecture – and attracting some of best talent in the industry to help them achieve their mission. Since then, the company has gone from a start-up to a Nasdaq-listed company with over 800 employees and a dynamic, experienced, leadership team pulled from the best of aerospace and high-tech.
While Wiegand (the co-founder and CEO) is confident about the design of the company’s latest seven-seater aircraft, he is still struggling with the business model. Lilium has three main options. First, it can offer air mobility services to passengers, i.e., become a full-service B2C company. Second, it can become an original equipment manufacturer (OEM), selling its jets to other companies that offer mobility services (B2B option). Third, Lilium can choose a hybrid option, offering air mobility to end-users in certain markets while selling its jets to other air mobility service providers.
On June 1, 2022, Lilium announced Klaus Roewe, long-time Airbus executive, would be the company’s new CEO starting in August. While Lilium’s co-founder and the current CEO, Daniel Wiegand, will continue as Lilium’s Chief Engineer for Innovation and Future Programs and as a Board Director.
During his 30 years at Airbus, Klaus Roewe has spearheaded all phases of the life cycle of a commercial aircraft across Engineering, Manufacturing, Program management and Customer Support. He led Airbus’ most important business line, the A320 and A320neo programs, to unprecedented success during his tenure: improving aircraft performance, doubling EBIT, cutting unit costs, while increasing market share and FCF, making it the most successful large commercial aircraft program of all time.
Tesla – constantly disrupting the EV market
2021 was a banner year for Elon Musk. CEO of the electric vehicle manufacturer Tesla, the aerospace manufacturer SpaceX, and a few smaller startups, Musk became the richest person on Earth after Tesla reached a market capitalization of $1 trillion and SpaceX a private valuation of $100 billion. Both companies bet big on risky technologies. Now that they were leaders in booming industries, the task was to retain their lead.
Musk had proposed a round of big new bets for each company: Tesla was to work with partners to rapidly expand battery production with a focus on lithium-iron phosphate batteries, and SpaceX was to launch thousands more of its Starlink satellites aboard Starship, the largest launch system ever devised.
Meanwhile, Tesla faced litigation related to SEC complaints and safety concerns about its Autopilot driver-assistance system, and SpaceX’s growing Starlink constellation similarly raised safety concerns. For Musk, the question was: should he consolidate gains and fix the operational, legal, and political problems before launching new initiatives, or should he proceed full speed ahead?
GM – a bold EV vision
General Motors made a splash last year when it announced a bold plan to ramp up sales of electric vehicles and said it would stop making gasoline-powered vehicles by 2035.
But more than a year later, some other automakers appear better positioned to lead the industry’s transition to E.V.s. Tesla had global sales of more than 310,000 electric cars in the first quarter of this year, while G.M. is far behind unless it counts E.V.s made by its Chinese joint ventures. It sold fewer than 500 E.V.s in the United States in the quarter. Ford Motor has just started production of an electric F-150 pickup truck and has taken customer reservations for more than 200,000 of them.
Yet, G.M.’s chief executive, Mary T. Barra, is unconcerned. In her view, the G.M. strategy should enable the company to make more affordable E.V.s than most competitors, and eventually to win over many of the tens of millions of mainstream car buyers who are not yet shopping for electric vehicles.
Last year E.V.s accounted for about 3 percent of the 15 million cars and trucks sold in the United States. As that percentage grows, G.M. expects this cost advantage to allow it to overtake most of its rivals within a few years and to challenge Tesla for the lead in E.V. sales before the end of the decade.
“That’s the long game we are playing,” Ms. Barra said in an interview at G.M.’s sprawling technical center in Warren, north of Detroit. “And I’m here to win.”
The heart of the strategy is a battery pack design that G.M. has engineered over the last five years. Its packs, marketed under the name Ultium, are made up of Lego-like battery modules that can be combined in different sizes and used in any G.M. vehicle, from a compact car to a full-size pickup. Since the modules all use the same parts, G.M. believes it will reap great economies of scale that will drive down its costs and give it an advantage over other automakers.
While working on its Ultium design, G.M. also started building four factories with a partner, LG Electric, to churn out battery packs in mass quantities and at lower costs. It has also started retooling assembly plants to make vehicles with Ultium packs.
Ms. Barra noted that most E.V.s sold in the United States last year were luxury models purchased by people who owned at least two vehicles. G.M.’s current offerings are of that type. They include an electric GMC Hummer pickup that sells for about $110,000 and a luxury sport-utility vehicle, the Cadillac Lyriq.
“If you want E.V.s to get to 100 percent or even 50 percent of the market, there have to be affordable E.V.s,” she said. “You’ve got to provide entry models in that space.”
With G.M.’s E.V. strategy well underway, Ms. Barra is confident that the company has chosen the right path, and her biggest concern is executing it as quickly as possible. “I drive the organization crazy because I’m constantly challenging the organization on how can we go faster,” she said. “Every time I go to design and see a vehicle they’re working on, I’m like, ‘How fast can we get that out?’”
Porsche – Designing EV super cars
Porsche recently introduced its first fully-electric car – the Taycan – and much more is to follow in the coming years. The new 718 Cayman GT4 ePerformance testbed is the latest clue to the sports EVs in the works, developing a mammoth 986bhp from its 735kW motors in qualifying mode.
Porsche, like all other car makers, has CO2 targets to meet, so has been slowly expanding its range of hybrids and plug-in cars. By 2030, the car maker aims to be carbon neutral across the entire value chain and expects its output to be more than 80 percent pure electric.
Both current generations of Porsche’s two largest models – the Panamera and Cayenne – have both an e-Hybrid and a performance-orientated Turbo S e-Hybrid model, for example, and there are more to come in the following years. And, while hybridisation satisfies both Porsche’s performance car goals and its gradual reduction in CO2 output, the brand is investing heavily in battery-electric vehicles (BEVs). After years of teasing, concept cars and leaks, Porsche finally revealed the production version of its first EV in 2019: the Taycan (above).
It has also invested in Rimac, first buying a 10 per cent stake in the company – known for its Concept_One and Concept_Two cars – in June 2018, only to then increase that stake to 15.5 per cent just days after the Taycan’s September 2019 reveal. In late 2021, Bugatti-Rimac was created as the Croatian hypercar maker struck a joint venture with Rimac owning 55 per cent and Porsche AG 45 per cent.
The Taycan BEV is the vanguard of Porsche’s full-electric car plans. The Taycan is available in saloon, Sport Turismo and Cross Turismo bodystyles, combined in combination with four variants: base model, 4S, GTS, Turbo and Turbo S – stretching from around £74k all the way to £141k and beyond. These performance variants still claim between 250 and 280 miles of range in Europe (though the EPA in the USA says the Turbo S actually has around 190 miles), with four-second-or-less 0-62mph sprints.
The Sport and Cross Turismo models are spin-offs; think of them as wagon and off-road estate versions of the Taycan, designed to be more user-friendly for a wider range of potential customers.
When it comes to the Macan, Porsche confirmed that the next one will definitely be full-electric and it will use the Premium Platform Electric – an 800v battery-electric platform that’s been primarily developed by Porsche, but one that the wider VW Group has access to. Audi, for example, will be creating a range of cars to sit on the electric underpinnings in the coming years. Porsche confirmed that the next electric Macan will be built at its facility in Leipzig, too. Expect to see the all-electric Macan later in 2023.
What about an electric Porsche hypercar? Porsche has been lacking an ultimate halo car since the hybrid-powered 918 Spyder, and it’s something the brand is keen to get back into. So long as it has real-world applications; Porsche isn’t about to churn out a biblically-powerful hypercar for the sake of it, but experiments are being conducted behind closed doors with a focus on improving the chemistry of the batteries.
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- Lilium – Images and Information – https://lilium.com/company
- NYTimes – https://www.nytimes.com/2022/05/12/business/general-motors-mary-barra-electric-cars.html
- Harvard Business Review – EV Cars – https://www.hbs.edu/faculty/Pages/item.aspx?num=62046
- Cars Magazine – Porsche’s electric car plans explained in full – https://www.carmagazine.co.uk/electric/porsche/