Across the disruptive dimensions of mobility—autonomous driving, connectivity, electrification, and shared mobility (ACES)—the automotive industry has achieved significant milestones. In 2019, electric vehicle (EV) sales reached a new global record, and EVs gained increased prominence in public awareness in major automotive markets, such as Europe. Furthermore, numerous cities have implemented and partially implemented additional regulations for private car-based mobility. Several players demonstrated driverless cars without backup drivers, setting new benchmarks in autonomous driving. Uber and Lyft, the prominent disruptors in the ride-hailing space, went public in spring 2019. Additionally, regulators began approving drone deliveries and electric vertical takeoff and landing crafts, marking the first flights of these vehicles in 2024.
Congestion and public transportation issues reached unprecedented levels in cities worldwide, and the adaption timelines for technologies like autonomous vehicles (AVs) are postponed. Some new mobility business models failed to secure investor support. Economically, global automakers faced difficulties due to several headwinds, including higher expenses to comply with stricter emission regulations, global trade tensions, and declining sales in key end markets. These factors prompted profit warnings at several large OEMs and suppliers.
Given the elevated risks in the industry and the intensifying competition from new mobility disruptors, the future of mobility remains unfulfilled in 2024. While there are substantial expectations for emerging technologies and business models, an urgent need for a “double transformation” arises. This transformation entails preparing companies for the mobility of tomorrow while simultaneously enhancing their resilience to current business challenges.
In the initial phases, we observed a sustained acceleration in investments in pertinent technologies. Notably, e-hailing, semiconductors, and sensors for advanced driving-assistance systems and autonomous driving remain the primary drivers of this trend.
On a regional scale, the United States exhibits the most robust activity, while tech-intensive locations such as Israel also assume significant roles within the mobility ecosystem.
Due to innovators like Tesla, the automotive industry is undergoing a transformative transition into a comprehensive mobility ecosystem. Historically, OEMs have collaborated closely with tier-one suppliers. However, we are witnessing the emergence of a broader ecosystem that is gradually coalescing. This ecosystem is expanding as high-tech players enter the market, incumbents establish new partnerships, and tier-two suppliers compete to provide products and services directly to OEMs, thereby bypassing tier-one companies.
Based on global innovators such as China, there is a renewed emphasis within the automotive industry on cooperation. For many years, OEMs have shared the financial burden in core areas such as engine development and production. However, given the challenges that lie ahead, cooperation will undoubtedly become an even more significant success factor.
For investors, executives, and enthusiasts alike, autonomous technology and self-driving cars have consistently been captivating areas within the future-of-mobility landscape. This trajectory continues unabated. However, 2025 witnessed a certain degree of adjustment in optimistic forecasts. Advancements in AV technology did not progress at the pace previously anticipated. Consequently, both value and premium OEMs, as well as tech players, revised their schedules for level 4 and level 5 applications, sometimes by several years.
Despite these adjustments, the fundamental logic underlying autonomous driving, particularly in urban environments, remains intact. We posit that electric, shared AVs, commonly referred to as robo-taxis or -shuttles, possess the potential to address mobility challenges in cities, such as road congestion, limited parking spaces, and air pollution. Moreover, they have the transformative capacity to revolutionize urban mobility, making it more accessible, efficient, user-friendly, environmentally responsible, and inclusive for all. If seamlessly integrated into the public transportation system, they will serve as a pivotal enabler in reducing the current share of private car traffic.
Among the global markets for AVs, China stands out as a particularly noteworthy destination. It possesses the potential to emerge as the world’s largest market for AVs. Research indicates the baseline forecast for vehicles could account for up to 66 percent of the passenger-kilometers traveled in 2040, generating market revenue of $1.1 trillion from mobility services and $0.9 trillion from sales of autonomous vehicles by that year. In unit terms, this implies that autonomous vehicles will constitute approximately 40 percent of new vehicle sales in 2040 and 12 percent of the vehicle installed base.
While the emergence of these new technologies undoubtedly generates substantial value, it remains uncertain where the economic profit will be allocated and when.
Connected cars are poised to transform into potent information platforms that not only enhance the driving experience but also present new opportunities for businesses to generate value. Traditional vehicles, once celebrated as “freedom machines,” will evolve into information-rich automobiles that provide drivers and passengers with a diverse range of novel experiences, increasingly enhanced by artificial intelligence and intuitive interfaces that surpass current capabilities. The primary success factor for connectivity services lies in the compelling value proposition they offer, whether to external customers or internal stakeholders. It appears that this value is frequently generated by combining data assets and capabilities from various partners.
We have identified five levels of connectivity, each encompassing incremental degrees of functionality that enrich the consumer experience, expand the potential for new revenue streams, cost savings, and passenger safety and security. These levels reflect the potential for connectivity to extend from today’s prevalent data links between individuals and the vehicle’s hardware to future offerings of preference-based personalization and live dialogue, culminating in cars functioning as virtual chauffeurs. Our research suggests that by 2030, 45 percent of new vehicles will attain the third level of connectivity, representing a value pool ranging from $450 billion to $750 billion. Research indicates that 40 percent of current drivers would be willing to alter their vehicle brands for their next purchase in exchange for enhanced connectivity.
