Trends in mobility and transportation 2024

Our vehicles are changing shape, we can see that. But how quickly the systems behind them change as our mobility increasingly become electric, digital, connected and autonomous may not be as obvious. The shift is taking place in all modes of transport. Read about seven strong trends in mobility and transport right now.

Seven strong trends in mobility and transportation

To save the climate, we need to phase out fossil fuels to move people and goods. This is happening now, and mainly through electrification. At the same time, more and more cities are pushing for changed urban travel and delivery patterns to protect the urban space and experience, especially in Europe.

But the transition is just as much driven by rapid technological development in many areas, not least in artificial intelligence, AI, the Internet of Things and software, but also in production. Add to that increased demands for sustainable materials and swift innovation in mobility services and systems around the world. The pressure for change is great.

Europe has long been dominant in automotive. The industry accounted for 7 per cent of GDP and 10 per cent of European exports in 2022, according to McKinsey. There are signs that the drama is now intensifying in the mobility and transport sector, one of the largest sectors of the world economy. China has grown into the world's largest market for passenger cars, and one in four cars sold there in 2023 was fully electric. Chinese electric cars are now being launched on a broad front in Europe. 

What is basically going on, and why? What are the dominant trends? Where are we going? How is this reflected in the Gothenburg region, which is one of four or five regions in the world with a complete industrial cluster in vehicle manufacturing and transport?

The development can be summarised in seven trends.

1. Electric vehicles are becoming the norm – in most modes of transport
2. Well-designed, connected driver experience increasingly important
3. The cloud to guarantee safe autonomous driving
4. Mobility and transport as a service is growing
5. Society and customers are pushing sustainability
6. Cities play a key role – protecting urban space and environment
7. Fierce global competition and new players

1. Electric vehicles are becoming the norm – in most modes of transport
 

Reduced reduction obligations, abolished electric car bonuses and high interest rates caused private electric car sales to slow down in Sweden in 2023. Is electrification really happening? 

Yes, new EV sales grew strongly on all continents in 2023, and Bloomberg expects 21 percent growth in 2024. McKinsey predicts that global demand will increase sixfold from 2021 to 2030, reaching the level of 40 million electric cars annually. In the EU, battery-powered cars (including plug-in hybrids) will soon account for most of all new registrations, according to The Economist. In the Nordic countries, the share of sales of fully battery-powered vehicles, BEV, is highest in Europe.

The passenger car manufacturer Volvo Cars has produced its last diesel car in Sweden and is aiming for full electrification. In 2030, at least 90 percent of the cars sold will be rechargeable, and fully or partially powered by electricity. Of last year's record sales, of just over 700,000 cars, 38 per cent were electric. The company is owned by the Chinese Geely Group, which has a large part of its R&D operations in Gothenburg, including R&D for the electric car brands Polestar and Zeekr, as well as the hybrid brand Lynk&Co. 

The trend is not limited to passenger cars. Electrification is happening in all modes of transport, albeit in different ways, and at different paces. 

The Volvo Group, the world's largest manufacturer of heavy-duty trucks, had delivered 5,000 fully electric trucks by the end of 2023. In that segment, the company had a 70 percent market share in Europe. Batteries can power most heavy-duty vehicles, while long-haul operations will also require fuel cells, according to Volvo, which sees that the internal combustion engine will continue to play a role in heavy-duty vehicles, powered by renewable fuels. Volvo also sees great potential in buses, construction equipment and marine operations. Bloomberg estimates that the global sales volume of electric (fully or partially) commercial vehicles will double in 2024 compared to 2023. 

In the air, regional aviation is most suitable for electrification. The acclaimed start-up company Heart Aerospace from Gothenburg has raised more than SEK 1 billion to develop a hybrid-electric plane for 30 passengers. There are confirmed orders from the US for 250 aircraft, and preliminary orders for even more worldwide. 

Shorter journeys over water are now starting to be operated by electric ferries, but long-haul sea transportation is difficult to electrify. Stena Line plans to order a battery-powered passenger ferry that will operate between Gothenburg and Frederikshavn by 2030. However, the number of e-bikes is growing steadily in Europe, and the annual volume sold is now just over 5 million. In Germany and the Netherlands, more e-bikes are sold than regular ones. A leading Nordic supplier is Ecoride, which manufactures theirs in Gothenburg. 

In Gothenburg, a considerable number of electric vehicles are being developed. In 2024, sales will begin on several car models that have been designed for electric drive from the ground up. To test and research the new technology, the Swedish Electric Transport Laboratory, SEEL, owned by Research Institutes of Sweden, Rise, and Chalmers University of Technology, was recently inaugurated. 

In total, the automotive and mobility sector employs 51,000 people in the region. Staff are being trained to meet the skills transition that is taking place, but the need for recruitment is great. The Volvo Group and Volvo Cars are Sweden's two largest private employers.

2. Well-designed, connected driver experience increasingly important

Moving around should be easy, safe, and comfortable. People are placing increasing demands on the experience in a car or during other transport, as the opportunities grow with new technology and new services. 

The ability to create, or contribute to, these experiences is becoming increasingly important – and connectivity is a hygiene factor. This applies both to competition between suppliers and between modes of transport. Good design, autonomous safety, best software, and smart use of AI are some keys to success in the automotive world. Drivers, for example, control more and more with their voice.

Experienced vehicle developers such as the Volvo companies have in-depth design expertise, but this also applies to Polestar and Zeekr, which are designed in Gothenburg. All of them are considered premium brands. At the same time, good design today is just as much about app development, interaction design and UX. The software that services the car is seen by many as the most important competitive tool going forward, and Volvo Cars is building large software centers of its own. Volvo Cars and Polestar have chosen to use Google's Android Auto as their digital platform, while Tesla uses its own where no third-party apps are allowed.
Thanks to telecom giant Ericsson and operator Telia, Sweden has been a pioneer in 5G and telematics. That is why the Swedish automotive industry is at the forefront of advanced and secure connectivity of cars. Virtually all new electric cars today are connected.

This makes today's cars more and more like computers on wheels. Over-the-air software updates give the cars the right performance and new features remotely. Thanks to connectivity, the navigation assist is based on the real-time situation and provides the best AI-calculated route and speed at every moment. All kinds of cloud services create extra benefits for users, who expect a seamless transition between smartphones and cars.

This development has led major global companies such as Nvidia and Luminar to establish in Gothenburg. New Gothenburg providers of mobility services have also grown large. WirelessCar early on built the Volvo on Call system. Today, the firm also is improving the car as a working and living room for Polestar, but also for most of the Volkswagen-owned brands, and for Mercedes, Subaru and Nissan. Smart Eye delivers AI-based tools to monitor how the driver is feeling by reading head and eye movements. WirelessCar serves over 13 million connected cars worldwide, and Smart Eye just over 1 million. Volvo Cars has around 2 million connected cars in the field.

Connectivity of commercial vehicles is at least as valuable and useful, especially as the vehicles are usually owned by operators responsible for entire fleets. Over the past ten years, the Volvo Group has delivered more than 2 million trucks, 700,000 construction equipment and 80,000 buses, most of which are connected. 

3. The cloud to guarantee safe autonomous driving

When will fully self-driving vehicles enter regular traffic? The answer has long been "in a few years". One explanation is that the step from someone other than the driver being responsible for safety is enormous. That step is extremely complex to take. But if you get rid of the human factor, Vision Zero looms: zero deaths in traffic.

Here, different manufacturers, startups and authorities bet differently. In fact, philosophies also shift between continents. There are indications that Europe will require extremely robust centralised security systems, and that functions currently built into vehicles will be moved to the cloud, in part, or in the long term. In the future, Euro-NCAP is predicted to require connected safety in order to classify vehicles as safe.

This is one reason why vehicle manufacturers are investing heavily in collecting data from the entire fleet in central data hubs. Data from the vehicles' sensors is recorded and can be used in large new software test centers, where traffic can be played back and different situations be simulated. Add weather information, GPS signals, imagery and other satellite data, and data from roads and other infrastructure – IoT plus AI. As you begin to grasp the complexity, you also realize that it should be possible to create security systems that can truly achieve a zero-vision goal. Vehicles that cannot crash. Carmenta Automotive and Nira Dynamics are examples of suppliers in this field.

Once there, vehicles may be designed in a simpler way. Lighter, without crash zones. But that situation is quite far in the future. For a long time, we are expected to live in a mobility world where different security systems live in parallel, and vehicles and drivers have different abilities to benefit from the cloud. Which is a true security challenge in itself.

For cloud-based safety to work securely, cybersecurity must also reach a much higher level than is the case today. Every computer, and every connected vehicle, is a potential security risk. Privacy issues become central. 

On the other hand, self-parking vehicles are basically already here. At low speeds, the safety challenge is not so great. CPac Systems, a company based in Mölndal, has developed similar systems for automatic docking of boats in collaboration with Volvo Penta. 

Geely-based Zeekr in Gothenburg is also at the forefront. It has developed the Zeekr M-vision concept, which demonstrates what autonomous, shared mobility could look like in a few years' time. A single electric platform can become the basis of a robot taxi, self-driving logistics vehicles and many other types of vehicles.

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4. Mobility and transport as a service is growing

Subscription services are gaining ground in all modes of transport. People don't have to invest in their own vehicles. The large fleets of electric scooters and bicycles available for hire are the clearest example.

Car sharing and sharing services are another dynamic area that is growing in importance. Here, the digital apps become the central experience, and the benefits the platforms offer. Mobility services are driving digitalisation, and electric propulsion fits in like a glove. Some believe that on-demand car subscriptions will grow at the expense of leasing going forward. Lynk & Co is a growing car brand that is developed in Gothenburg, Sweden, and primarily built around car sharing.  

Multimobility is another strong trend, services that offer combinations of different modes of transport. Also known as intermodular mobility. Points is an app where you book and pay for all transports, regardless of whether you travel individually or by public transport. The trend is driven by major rail operators such as Iryo, Renfe and SNCF, but also by tech companies such as Uber, Lyko, German Freenow and Dutch Gaiyo. With political pressure, this type of business model may have the potential to displace privately owned cars.

On the heavy vehicle side, service development is very much about increased transport efficiency and reduced emissions, but also maintenance, insurance and financing. Here, too, electrification is a game-changer, along with large data centers, AI and digital platforms that enable new energy services and new digital and autonomous solutions. 

The Volvo Group's service sales accounted for just under a quarter of sales, or SEK 127 billion, in 2023. The company expects to be able to increase its service revenue by more than 50 percent over the life cycle of its products with electric vehicles. 

Logistics innovator Einride offers systems to reduce both transport costs and carbon dioxide emissions with fully electric freight vehicles, and has major transport clients as customers. Boeing-owned Jeppesen's flight route planning system was also created in Gothenburg.

5. Society and customers are pushing sustainability 

Climate change has created tremendous pressure on vehicle manufacturers and logistics companies to change, both from politicians and customers. The EU's climate policy, most recently Fit for 55, is making the pressure for change particularly strong in Europe, but the United States is also investing heavily in the climate transition. 

The Gothenburg companies see the situation as a competitive opportunity. Huge sums of money are being invested in research and development, in technology-based startups and new production and energy supply facilities. 

Zero-emission vehicles and charging infrastructure are just step one. Both Volvo Groups and battery supplier Novo Energy are examples of companies that secure fossil-free electricity for their large factories and facilities. To be able to offer products that are carbon neutral across the entire life cycle, automotive companies need to work along the entire supply chain. To find suitable suppliers and to design vehicles more sustainably from the ground up. 

Polestar is investing heavily in developing a completely carbon-neutral car by 2030. Basically, it concerns thousands of products in each vehicle – materials, electronics and processes along the entire value chain that eventually need to be carbon neutral. Investments in green steel in Northern Sweden are important for the automotive industry. But the challenges are enormous, not least on the electronics side.

Battery-powered vehicles also offer new business opportunities, thanks to the fact that fleets of electric vehicles have become interesting as energy storage. With the help of vehicle-to-grid technology, V2G, stationary vehicle batteries can contribute to increased capacity and flexibility in the local electricity grids. This can give rise to entirely new revenue streams. That's why both Volvo Cars and Polestar are involved in several real-life projects with new car models.

Customers are increasingly demanding green transport. In e-commerce, you are now able to choose who will ship and deliver the goods, especially the last-mile delivery. Here, logistics companies compete with high-profile startups that invest in smart apps with frequent updates, exciting micro-vehicles and often zero emissions. In Gothenburg, Velove delivers entirely with the help of e-cargo bikes. Gordon coordinates flows of chilled deliveries.

6. Cities play a key role – protecting urban space and environment

Both emissions and traffic problems are greatest in our large cities. But in urban environments, changes in the way travel and transport goods can also have a major impact on the climate and noise. Removing heavy traffic from urban areas creates a better quality of life for residents and a more attractive environment for visitors.

The EU has recognised the key role of big cities in the digital and green transitions and is putting them at the heart of several major initiatives. Within the EU and the UK there are about 300 cities with over 250,000 inhabitants, of which 22 have a population of over a million. Many now severely restrict car traffic through no-go zones – such as Rome, Paris and several Spanish cities – or congestion charges such as in Stockholm, Gothenburg, London and Milan. Copenhagen has banned fossil-fuel cars in the city centre. Others subsidize public transport.

New solutions are already being tested in exciting pilot projects across Europe. Often, they don't lead to lasting results. Lack of business models and conditions that create sustainable business for small pioneers is common. Smart, innovative collaboration with the business community that also aims at economic sustainability is the key to lasting change, according to analyses. 

Thanks to proven track record of private-public partnerships, Gothenburg has been selected by the EU to act as a mentor for other European cities in the Intelligent Cities Challenge initiative. Gothenburg currently has the highest number of electric buses in public transport in the Nordic region, thanks in part to good collaboration through the ElectriCity project.

Efficient public transport and electrification are necessary. But that's not enough, the City of Gothenburg has stated. The number of miles driven by motor vehicles needs to decrease by approximately 25 percent in Gothenburg by 2030, despite the city’s growth.

Therefore, major investments are being made to facilitate and increase biking and other micromobility, including through the EU project Move21. Gothenburg Green City Zone is another major local initiative with the goal of creating a sustainable transport system in the city by 2030. Both initiatives will promote the rapid scale-up of new solutions in other cities as well.

7. Fierce global competition and new players

Sustainable mobility must become a driving force for the green transition. And it’s on its way to becoming so.  But the journey there is likely to be dramatic. New types of vehicles, and new types of mobility, will gain ground at the expense of passenger cars.

Chinese automakers are currently investing large sums to significantly increase their sales in Europe. One reason is Chinese overcapacity of batteries, which has led to global pricing pressure. China has surpassed Japan in car exports, and China's BYD overtook Tesla as the world's largest supplier of electric cars this year. But Indian manufacturers are also starting to gear up towards an increased share of exports, but mainly to countries outside Europe. 

Within a couple of years, it is expected that you will no longer have to pay extra for battery power. In the long term, electric vehicles are expected to be cheaper to produce, thanks to fewer components, megacasting technology and smart platform thinking. At the same time, more sustainable materials will drive up costs, as will all the advanced technology that is built into vehicles, and systems around them. It paves the way for cheaper, simpler cars in parallel with more advanced systems, which entire fleets take advantage of.

Europe has long dominated the global car market, and in particular the premium segment. But in the shift to electric power, European manufacturers are being challenged. The EU is also considering tariffs on Chinese cars. High demands on customer satisfaction, economies of scale, sustainability over the life cycle, and capital speak in Europe's favour – but the nature of the competition is partly shifting. When it comes to input products and battery production, Europe lags far behind Asia, and China in particular. In software, AI and other types of tech, both the US and China are far ahead.

Today, 13 million Europeans work in the automotive industry, representing 7 per cent of all jobs in the EU. Consolidation and alliances will be important to share large development costs, as well as continued profitability from vehicles powered by internal combustion engines. Some players will be winners, others losers. 

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