Asia's population is expected to grow by more than 700 million by 2030,[1] and rising urbanisation will put pressure on the region’s public transportation systems. Current mobility systems cannot meet future demand without exacerbating traffic congestion and pollution issues.

The good news is consumers and governments are acting to address the situation. We see this happening in Southeast Asia (SEA), as outlined in The Future of Sustainable Transportation.

Transportation companies will have to pivot themselves towards creating a greener and more sustainable future or risk being left behind. What’s key to note here is that new “battlefields” will arise, and this means mobility players will have to leverage existing competitive advantages and future aspirations to align themselves to the following four archetypes we predict may emerge in the next decade:

Archetype #1: End-to-end service/solution providers 

The introduction of Autonomous Vehicles (AVs) and Electric Vehicles (EVs) are helping countries transition towards a more sustainable, emission-free future. In fact, almost 58 per cent[2] of global passenger vehicle sales in 2040 are expected to come from electric vehicles.

But executing the end-to-end vehicle integration for both AVs and EVs is no easy task. Only a handful of providers will have both the financial and technological capabilities to help meet growing demand.

Take automobile giants like Nissan and BMW. Having launched their second fully electric car in 2020, Nissan are planning to develop seven more models by the end of 2023. It has also set itself a target of selling one million electrified cars[3] a year by then.

BMW, for its part, is dramatically ramping up its electric car offering as part of its new ‘Power of Choice’ sustainability plan, which promises to roll out more than seven million[4] plug-in hybrid and pure-electric vehicles by the end of 2030.

And while Original Equipment Manufacturers (OEMs) have long dominated the scene, tech giants are slowly catching up. Apple, for instance, has joined the race for the nearly US$802 billion[5] electric vehicle market. With prototypes allegedly planned for production in 2024, the Apple car[6] is believed to boast assisted-driving capabilities that would let a user input their destination and be driven there with “little or no other engagement”.

Internet behemoth Google also set the automobile scene alight earlier in 2018 when it launched Waymo One[7], its first self-driving taxi service featuring its first self-driving car, Waymo. As the only self-driving commercial service that operates without safety backup drivers in the vehicle, it uses smart technology and data gathered from its advanced suite of sensors to power its cars.

Archetype #2: Platform providers and connectors

Scaling up current technology for widespread adoption is another area of contention. There will be competition among platform providers and connectors to see who the dominant platform will be, in combining the right hardware and software across mobility and technology dimensions.  

This will determine the key mobility partners that will shape industry standards and drive innovation in the non-electric two‐wheel vehicle market. Aside from significant investments, this will require scale and knowledge of unique business models within the transport sphere.

This is a space where SEA can take the lead, as it is home to some of the leading platform providers across the world. Given their existing infrastructure and industry know-how, ride-hailing apps like Grab and Gojek are poised for success.

In 2020 alone, Grab accounted for almost 72 per cent of SEA’s ride-hailing and nearly 50 per cent of the online food delivery market. It also recorded about 23 per cent of digital wallet payments[8].

Gojek, on the other hand, looks set for rapid market expansion after announcing a multi-billion dollar merger with e-commerce leader Tokopedia to form GoTo Group, a one-stop entity for online shopping, courier services, ride-hailing, and food delivery, among other services.[9]

Archetype #3: Specialised solution providers

In the race for sustainability, having an innovative edge will be what sets companies apart from their competitors. As emerging supporting infrastructure accelerate the adoption of electric vehicles, increasing technological advancement in the automotive sector is anticipated to bring new opportunities for the market.

Cross-company collaborations and inter-platform partnerships can help grow brand presence. Earlier this year, Panasonic, which supplies battery cells to electric car company Tesla, announced it was renewing its partnership[10] after sales and share prices soared. Meanwhile, Swiss electrical engineering company ABB recently announced a tie-up[11] with Amazon Web Services to create a cloud-based EV fleet management platform that it hopes will hasten the electrification of fleets. 

Having market leadership in specific critical technologies and components can enable high-margin supplier niches. These include parts like batteries, connectivity solutions and EV designs. With its ambitious plan to establish itself as a major producer of lithium-ion batteries, Indonesia[12] can lead the way. After all, it has already garnered the attention of Tesla and other large South Korean and Chinese firms.

Archetype #4: Product makers

Mobility players will also have to anticipate the rising demand within for components like vehicle bodies and charging pods. While the industry is expected to start as a niche sector, widespread adoption of sustainability technologies is expected to commoditise this industry in the long run. Manufacturing hubs within SEA will have to strategically reposition themselves to stay relevant in the industry value chain.

Thailand, as one of SEA’s largest automobile manufacturers, has taken the lead in this race with an ambition to only sell zero-emission vehicles in the country from 2035[13]. Earlier this month, Foxconn[14], the world’s largest contract electronics maker, signed a memorandum of understanding to establish an electric vehicle-making platform in Thailand.

Meanwhile, Indonesia is ramping up plans to become a one-stop EV developer[15]. This includes activities from upstream development, which include the mining of raw materials for use in EV batteries, to downstream activities like the manufacturing of batteries and vehicle bodies.

A connected mobility ecosystem

The future of transport is green. While the shift to sustainable transportation has been discussed and debated for decades, the movement is finally gaining momentum, led by the rise of electric vehicles, government-led initiatives, and industry-initiated frameworks.

All these will reshape SEA cities landscape and create new modes of citizen-led transportation experiences and possibilities, as well as a more connected mobility ecosystem than before – one that is cleaner, safer, and for the future.

END

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. This document may refer to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied.

Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture

[1] Global poultry trends: Asia's Population to Grow by 700 Million

(https://www.thepoultrysite.com/articles/global-poultry-trends-asias-population-to-grow-by-700-million#:~:text=GLOBAL%20POULTRY%20TRENDS%3A%20Asia's%20Population%20to%20Grow%20by%20700%20Million,-Egg%20layers%20Production&text=With%20Asia's%20human%20population%20forecast,per%2Dcapita%20egg%20consumption%20levels)

[2] The future of cars is electric – but how soon is this future?

(https://pv-magazine-usa.com/2020/05/19/the-future-of-cars-is-electric-but-how-soon-is-this-future/)

[3] Nissan's aggressive EV plans include Singapore

(https://www.businesstimes.com.sg/hub/bt-motoring/nissans-aggressive-ev-plans-include-singapore)

[4] More than 7 million vehicles with all-electric plug-in hybrid systems by the year 2030 (https://discover.bmw.ie/more-than-seven-million-vehicles-with-all-electric-or-plug-in-hybrid-drive-systems-by-the-year-2030/)

[5] Electric Vehicle Market to Reach $802.81 Billion, Globally, by 2027: Allied Market Research

(https://www.globenewswire.com/news-release/2020/06/08/2045017/0/en/Electric-Vehicle-Market-to-Reach-802-81-Billion-Globally-by-2027-Allied-Market-Research.html)

[6] Apple and Hyundai-Kia pushing toward deal on Apple Car

(https://www.cnbc.com/2021/02/03/apple-and-hyundai-kia-driving-towards-deal-on-apple-car.html)

[7] Riding in Waymo One, the Google spinoff’s first self-driving taxi service (https://www.theverge.com/2018/12/5/18126103/waymo-one-self-driving-taxi-service-ride-safety-alphabet-cost-app)

[8] Southeast Asian ride-hailing app Grab lands $40 billion SPAC deal for U.S. listing

(https://fortune.com/2021/04/13/southeast-asian-ride-hailing-app-grab-lands-40-billion-spac-deal-u-s-listing/)

[9] Gojek and Tokopedia merge to form GoTo Group

(https://techcrunch.com/2021/05/16/gojek-and-tokopedia-merge-to-form-goto-group/)

[10] Tesla strikes new Panasonic battery deal as sales and shares soar

(https://asia.nikkei.com/Business/Technology/Tesla-strikes-new-Panasonic-battery-deal-as-sales-and-shares-soar)

[11] ABB and AWS team up to create an EV-fleet management platform

(https://techcrunch.com/2021/03/29/abb-and-aws-team-up-to-create-an-ev-fleet-management-platform/)

[12] Indonesian state companies set up EV battery developer

(https://asia.nikkei.com/Business/Automobiles/Indonesian-state-companies-set-up-EV-battery-developer)

[13] Thailand Lays Out Bold EV Plan, Wants All Electric Cars by 2035

(https://www.bloomberg.com/news/articles/2021-04-22/thailand-lays-out-bold-ev-plan-wants-all-electric-cars-by-2035)

[14] Foxconn Teams Up With Thai State Conglomerate On Electric Vehicle Production Platform

(https://www.forbes.com/sites/ralphjennings/2021/06/02/foxconn-teams-up-with-thai-state-conglomerate-on-electric-vehicle-production-platform/?sh=25e79eb22591)

[15] Indonesia aims to start electric vehicle production in 2022

(https://www.reuters.com/article/us-indonesia-electric-idUSKCN1UD1OG)

Jurgen Coppens

Managing Director – Strategy & Consulting, Sustainability Lead, Southeast Asia

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