As EnerTech’s Founder and Managing Director, a venture capital firm focused on investing in innovative mobility technologies, and a co-founder of the California Mobility Center, which provides mobility start-ups and industry leaders with access to programs that accelerate commercialization, I have witnessed first-hand the shifts in the mobility sector over the last 30 years, and its increasing pace. This article shares my viewpoint on the transformation and how it will impact the near-term future of mobility.
What is mobility?
An internet search of ‘mobility’ will frequently produce a generic definition - "the movement of people or goods from point A to point B." Other search results state that the last significant development in mobility was the creation of the Internal Combustion Engine (ICE) in 1860. Some reference the emerging disruptive dimensions of mobility: autonomous driving, electrification, connected vehicles, and shared mobility. While these are all accurate, in my opinion, they do not address the massive shifts currently taking place across multiple industries. This article aims to provide readers with a better understanding of the current and future mobility industry.
What industries are involved in this shift?
The industries below strive to create a seamless, delightful total customer experience with zero-emission vehicles. However, none of the individual sectors can manifest that experience alone; it requires a closely integrated collaboration.
Transportation: A fundamental element of mobility is the transportation industry, most notably the ongoing electrification of the transportation system. Technologies underlying the electrification shift have been available for years and continue to advance. So why hasn’t the market shift happened before? It was unclear whether the market would be willing to pay for the next generation of transportation and all its related costs. Without a doubt, Tesla was and continues to be the market disrupter. While proving itself as a viable long-term business that can withstand competition, Tesla also led the charge on the acceptance of electric vehicles (EVs), not just because they are safer for the environment than ICE-powered vehicles but because they are fundamentally more enjoyable automobiles to drive.
Technology: Advances in digital technology overall, the continuous reduction in the cost of batteries, and new advanced manufacturing techniques are aligning to create the “perfect storm” of technology advancement. These advances, combined with the market interest, have contributed to changing the wait-and-see attitude of well-established, legacy automotive companies to join the evolution. This decision is monumental as it involves trillions of dollars of investment from multiple industries to make this broad future a reality.
Electrification: Another critical component is the new power source: electricity. Many assume the electric grid is ready to support the necessary charging infrastructure. Still, the simple answer is that the grid is nowhere near prepared to handle that expansion. Massive investments are required to enhance, strengthen, and digitize the grid. The hurdles in innovating electrification are complex because the power industry, another trillion-dollar industry, will also need to make an enormous shift. The shift required will move from a network dominated primarily by large, centralized power plants to one with a large percentage of smaller distributed energy resources (DERs). For example, an EV will become a DER once the technology advances further.
The digital grid is the future by embracing the convergence of power and information, providing higher grid reliability and improved energy economics. The digital grid enables increased customer involvement by supporting grid edge penetration of renewables and DERs. The tipping point for the grid inversion may well be the EV market – from both charging and eventually V2X (vehicle to everything) capability perspectives.
The electric industry is evolving to become the fuel supplier of choice. The increase in load and power supply on the edge of the traditional network creates several challenges and opportunities. Who wins? Who loses? Who decides?
Communications: The following trends significantly impact the demands, quantity, and quality of communication networks: self-driving vehicles, AI-powered car infotainment systems, vehicle-to-vehicle (V2V) and vehicle-to-cloud (V2C) connectivity, blockchain-powered maintenance and repair authentication, and AI-powered maintenance. Innovators could further optimize these features through real-time, low latency communications.
Smart City: The infrastructure investment incurred to support various levels of autonomous driving and the digital grid provides a substantial foundation to enable smart city-related applications: intelligent traffic management, advanced micro-mobility, and smart data (for maintenance and alternative revenue sources). With these related industry advances being designed and implemented on their own merits, it puts the city in an enviable position to ride the coattails of these improvements, leaving only smart city-related improvements to be funded by the municipality. I believe a win-win dynamic is possible – to use the advantages of new technology to help with the “day-to-day” management of city infrastructure.
The intersection and overlap of these industries form my definition of the MOBILITY SECTOR.
Who can be involved, and how can they benefit?
All these industry shifts expose shortcomings in the existing marketplace, creating opportunities for entrepreneurs, corporate innovation executives, and investors emerging with new ideas, technologies, and business models. Innovative solutions frequently widen the gaps left by the shortcomings and create opportunities for those individuals who move quickly and understand risk. The future of the mobility industry possesses all these features and more.
If these changes do not feel relevant to you or your business, one only needs to look within
their community for proof that this transformation is happening:
Fleet owner/operators: what are the key factors that must be understood and addressed to enable a fleet to transition to a whole ZEV fleet?
Dealerships: will they be faced with selling both ICE and ZEVs? Is the customer experience for both the same? Who funds and owns the onsite charging needed to support the ZEV?
Workforce: What skills are needed to support the evolution of advanced manufacturing? Can the existing workforce undergo a skills expansion?
The transformation of the mobility sector and its impact on all the industries and markets it touches provide the ideal space for innovation and value creation.