What’s the future of sustainable mobility? Will consumers own cars in the future? Those were a few tough topics tackled by experts at the first-ever Volkswagen Leadership Forum at the 2019 Canadian International Auto Show in Toronto, Ont., in February.
People won’t stop owning cars in the future, according to VW. “We will see different kinds of ownership models or shared economy, but I don’t think you’ll see ownership stop. People like their own private space,” said panelist Daniel Weissland, President & CEO, Volkswagen Group Canada.
“They say the only privacy I have is in my car. At home, I have to talk to my wife. At work, I have to talk to my employees and colleagues. For me, my car is my privacy. I think we will definitely see different models, but I don’t foresee owning a car is going completely away.”
But some disagreed. “I think the days of pure car ownership in an urban setting are counted. It will be possible, but it’ll be extremely expensive,” said Jean-François Tremblay, President & CEO, Jalon Montreal — Institute of Electrification and Intelligent Transportation. He pointed to the high cost of purchasing a parking spot in a property in Montreal and Toronto; it costs more than $40,000 for one parking spot in those cities. And that cost could drive more opportunities in the shared economy.
“We will not own cars. We will own access to mobility packages that will include public transportation at the core of it,” said Tremblay. “Come and live here and don’t bring your car. We will have cars for you to use depending on what you’re doing. How about you have a Volkswagen membership that gives you access to a cabriolet versus a seven-seater for a weekend if you’re a member? I think this is where we’re going. I think we will witness this transition.”
Panelist Yvonne Rene de Cotret, National Public Sector Transportation leader and co-leader of Canada’s Future of Mobility practice at Deloitte, also agreed. “We already know the younger generation has bought into the shared economy. They don’t see car ownership in the same light as an older generation does. The trend has already begun.”
“In city regions, the role of private cars is going to have to shift,” she added. How it shifts is anyone’s guess. “Nobody has a crystal ball. But progressive cities are being more deliberate to actually think about the role they want private cars to play in the context of the broader system itself. Cities clearly understand the pressure they’re under and governments are understanding they cannot keep operating the way they are financially. They are starting to take progressive steps. But it’s not just the government, it’s all players across the system including the private sector,” said Rene de Cotret.
We need to figure out how to make this very easy for consumers to get into — whether they’re buying an EV or it’s a ride-share model. Innovation is extremely important.
Innovators and strong leaders are also key to fostering change and disrupting the industries, said Weissland. “The greatest example is Elon Musk. What he did with the industry — coming out with electric engines. I remember the first days and everybody was laughing — what is this toy? It makes a funny noise! Nobody likes it. You don’t feel the real power of combustion engines. And now in California the number one premium brand is Tesla. We need to see some of those bold moves from the leaders who shake up the industry and drive suitable mobility. We need to move ourselves out of the comfort zone sometimes,” he said.
“I think conventional OEMs are not designed to bring innovation at the pace we need in order to drive costs down,” added Tremblay. “I think innovation at the cost level will come from new players. I think Rivian is interesting. They’re pretty public about how much it costs to build the company so far. Prices are going to be driven down by those start-ups that can be profitable at low volumes. We need them because there’s a lot of questions that are unanswered.”
And that opens up opportunities for the auto sector struggling with challenges moving forward. “You see partnerships forging between traditional auto OEMs and ride-sharing and car-sharing services, trying to figure out how these shifts are going to happen. How do we remain viable entities? I don’t think anybody knows when it’ll happen, but the trend is
happening. Being proactive and planning with strategies and continuously playing out those scenarios is going to be very important for everyone to remain financially sustainable and pragmatic,” said de Cotret.
Consumers are also part of the equation. “We need to figure out how to make this very easy for consumers to get into — whether they’re buying an EV or it’s a ride-share model. Innovation is extremely important. Having innovation hubs to stimulate those young companies through different ideas to make that consumer experience super simple so people want to get into that car or the transition isn’t very hard,” said Rob Barrosa, COO, Electrify Canada.
“I think we’re going towards an integrated mobility market whereby we will be moving cars like ants are moving. They will never really stop,” said Tremblay. But only time will tell.
