The future mobility market, those providing self-driving smart electric vehicles and shared mobility, is likely to expand 50 times to reach US$1.5 trillion in market size by 2030, compared to today's US$30 billion. Investors could benefit from companies in the electrification, autonomous driving, Internet of Cars (IoC) and shared mobility categories, according to a BofA Merrill Lynch Global Research report.
There are over 1.2 billion cars on the roads today, and the transport sector is generating around US$7 trillion in vehicle sales, supplies, and services. But the current market condition is highly inefficient, with 95% of cars parked at any one point and cars costing up to US$8,500 per year to own and operate. In addition, vehicles account for 1.2 million deaths annually and generate 23% of C02 emissions globally.
With world population expected to reach 9.7 billion and around 70% of people living in cities by 2050, the mobility market will face further strains. The rising financial, social and environmental costs of transportation are unsustainable and demand a fundamental rethink of mobility.
The convergent trends of electrification, autonomous driving, the Internet of Cars and the sharing economy will drive a fundamental shift from today's car-centric travel to a platform-centric model, whereby transport becomes a utility available to users anytime and anywhere, says the report.
The future mobility industry, including an integrated, on-demand electric fleet of self-driving taxis, can generate US$3.8 trillion of total positive impact in the next ten years and lead 59% decline in vehicle demand, 87% fewer accidents, 54% fewer parking spots, and 85% lower emissions, predicts BofA Merrill.
This trend will have significant ramifications for commodities, with electric vehicles having the potential to bring peak oil demand forward to 2030. The effects will also be felt in insurance, with autonomous driving able to reduce motor premiums by 60% by 2040. Around 5.7 billion square kilometers of land, currently used for car parking and other car infrastructures, will be able to be reclaimed in the U.S. and put to better use.
On the other hand, the coming car revolution could result in job disintermediation, with over 70 professions such as drivers and valet parking staff, as well as businesses including taxi companies and car rental firms, at risk of being made obsolete.
For investors, this brings numerous investment opportunities including companies operating in the sensors, semiconductors, radar, cameras, precision mapping, artificial intelligence, vehicle-compute hardware, batteries and storage, and infotainment sectors, as well as ride-hailing and car-sharing platforms.