It was only a few years ago when the automotive industry started using the acronym C.A.S.E. to describe emerging trends—Connectivity, Autonomous, Sharing/Subscription and Electrification—which now signify the future of transportation and mobility. Creating a heightened sense of excitement and anticipation, each pillar of this new tenet represents an advanced technology, but not so advanced that we are unable to identify with it. This is key—forward-thinking and modern but not too futuristic that it seems implausible or ridiculous.
Embracing this avant-garde viewpoint, OEMs started calling themselves mobility companies rather than car manufacturers. Rideshare services via companies such as Uber and Lyft were exploding, car sharing was taking off in selected areas, and new micro-mobility players—such as electric scooter rental companies Lime and Bird—were becoming household names in various cities (sometimes for the better, sometimes for the worse). Innovative last-mile delivery solutions were actively being pursued to support the growth in e-commerce. And, at a commercial vehicle conference, I learned a new term—“curbside optimization”—about the management of space to accommodate the various needs of the curb and sidewalk in major metropolitan areas.
The pandemic continues to adversely impact the majority of Americans with its one-two punch, having quickly spiraled out of control from a public health threat into an economic crisis with unprecedented levels of unemployment. Our way of life is in flux as we’re increasingly realizing we may be living with this threat for the indefinite future. Escalent has been conducting research to keep a close tab on how consumer behavior and sentiment continues to change alongside this quickly-evolving situation, and the insights we have uncovered help inform the path forward, for at least the near-term.
A majority (75%) of adults are not completely comfortable going into many public places, including a vehicle dealership, and people are least comfortable with taking public transit or using rideshare in fear of contracting the disease. Given the difficulty of “flattening the curve” in the US, there is heightened consumer focus on the cleaning and sanitizing protocols businesses are implementing to keep us safe. Americans are flocking to e-commerce, whether to buy essential items such as groceries or to acquire a vehicle. We uncovered in our findings that consumers who intend to purchase a vehicle within the next 12 months want half of the purchase process to be online. Talk about a big shift for the future of mobility and dealers that are still in the midst of going digital due to the pandemic.
Given this new consumer mindset and associated behaviors, how does C.A.S.E., or the future of mobility, look in a post-COVID-19 world?
Does the “S” (Sharing/Subscription) in C.A.S.E. go away temporarily or permanently? Do we see a sustainable spike in consumers walking and biking for the first and last mile rather than using rideshare or micro-mobility? Do we see an acceleration or deceleration of electrification and autonomous development? Do we see an influx of first-time vehicle buyers?
With three-quarters of people not completely comfortable using rideshare right now, how long this rideshare hiatus lasts will largely depend on how well companies such as Uber and Lyft regain the trust of their customers and employees. Similarly, micro-mobility companies will need to be diligent in identifying and executing new cleaning and sanitizing processes, at least in the near-term.
Regarding electrification and autonomous development, we don’t foresee electric vehicle (EV) players making a U-turn and permanently parking their plans for growing their market. However, given the negative impact COVID-19 has had on the supply chain and production, the penetration of electric vehicles, at least in the US, will likely stagnate. This may trigger a reprioritization of investment away from efforts dedicated to the improvement of EV technology and infrastructure, as least in the near-to-mid-terms. As future autonomous vehicles will likely be electric, this could have a ripple effect on investments earmarked for the development of advanced technologies designed for highly automated and autonomous vehicles. This could push the window for widespread adoption of AVs past the 10- to 20-year mark.
The future of mobility has always been about uncertainty and risk, and COVID-19 has amplified the challenges associated with managing these dynamics. The task at hand is to convert the uncertainty caused by the pandemic to a level of acceptable risk in order to move forward and continue innovating. The economy will not recover unless consumers spend money, and consumers won’t spend unless they feel safe. Therefore, it’s critical for industry players to seize the opportunity the pandemic has unexpectedly presented to critically rethink their strategies for the next generation of mobility.
Additionally, business leaders need to avoid falling into the trap of thinking that COVID-19 will only accelerate current mobility and demographic trends. What was believed to take place or evolve may no longer be the case. It is even more important now to understand the specific aspects consumers will value in this new environment and how this value system may change over time as the situation continues to evolve.
COVID-19 may require us to follow a detour to reach our desired destination. But, I am confident the future of mobility will fulfill its promise to deliver choice, convenience, safety, sustainability, and, of course, profitability for its players.
Escalent’s automotive team works with mobility companies of all kinds to craft winning strategies and find success as they navigate disruption and business transformation. If you would like to learn more about how we can help you come out on top in good times and bad, please send us a note.
Escalent interviewed a US-based sample of 1,432 consumers aged 18 and older on May 20–31, 2020. Respondents were recruited from the Dynata panel of US adults and interviewed online. Quotas were put in place to achieve a sample of age, gender, income and ethnicity that matches the demographics of the US population. The sample for this research comes from an opt-in online panel. As such, any reported margins of error or significance tests are estimated and rely on the same statistical assumptions as data collected from a random probability sample. Escalent will supply the exact wording of any survey question upon request.