Every industry, every household and every person will feel the effects of climate change and population growth in the coming years. But the car industry will change more significantly than any other. The way we build, buy, own and use cars is going to change more than at any time since Henry Ford first rolled out his original Model T in 1908. What’s driving those changes?
1. Electrification
In many ways, this is already a “mission: accomplished”. Most of Europe’s carmakers have begun the transformation to electric motoring, and BMW, Volkswagen and Mercedes are arguably ahead of the pack. Mercedes, for example, is going to pump some €40 billion into the switch to electric power between 2022 and 2030. From 2025, they will launch only fully electric models, and will gradually wind down investment in and development of combustion engines and hybrids.
BMW is also investing heavily and is working on a new Neue Klasse. The name is a tribute to the 1500 saloon that turned around BMW’s fortunes in the 1960s. Eventually, the design would morph into the 1602 and 2002, and the original 3 Series. The 21st-century Neue Klasse isn’t a single model: it’s a malleable battery and software platform that BMW CEO Oliver Zipse says will be “capable of covering all market segments and variants from high-volume series through to exclusive high-performance M models”.
The industry assumes that, by 2026 or 2027, the cost of building, and therefore selling, an electric car will have come down to match that of a conventional petrol or diesel car — and most major European car brands aim to be selling a majority of battery-powered models by then.
There are still some significant bumps in the road ahead, though, including rising energy prices. Charging points will also continue to be an issue. In an open letter, the European Automobile Manufacturers’ Association (ACEA), environmental think tank Transport & Environment (T&E) and the European Consumer Organisation (BEUC) called on EU climate, transport, industry and energy commissioners to demand that one million charging points be installed by 2024, and three million by 2029.
According to the EU’s own figures, there are currently just 199,825 public charging points across the bloc — and most of those are hogged by only a few countries. Fully 25 per cent of the chargers are to be found in the Netherlands. And only 28,500 public charging points are “fast chargers”, with a charging speed of more than 22kW.
2. Automation
“Autonomous driving is really going to change our industry like nothing else before,” said Herbert Diess, CEO of Volkswagen AG, speaking to journalists at the September IAA Mobility motor show in Munich. Diess said the shift towards electrified cars was “kind of easy” in comparison. “The real game changer is software and autonomous driving.”
Considering the torturous path towards electric motoring, that’s quite the statement. It’s impossible to argue with Diess’s logic, though. If autonomous driving — robotic cars that drive themselves and that can come and pick you up wherever and whenever you need them to — can really be made to work, it will completely change our relationship with cars, particuarly how we own and buy them.
“We have a trend in society where people, younger people especially, are less willing to commit to purchasing a car,” Klaus Zellmer, board member for sales and aftersales at VW, told Business Spotlight. “Why would they purchase a car, they ask, and deal with all the consequences of that — such as resale value, insurance, tax and so on — when they can let us take care of all that? ‘You give me a car and I pay for it when I need it’ — that is the societal trend.”
According to Zellmer and Diess, by 2030, VW expects that 15 per cent of its business will be based around “mobility as a service”. While that phrase can include anything from on-street car hire and even electric scooters, it also means — indeed, relies upon — autonomous cars. “For many, a car is a commodity that gets you from A to B,” says Zellmer. “More and more, we are seeing that kind of buyer out there. That lessens the importance of the brand, and it all becomes much more price-sensitive. The last time you caught a bus, did you notice which company made the bus?”
Zellmer says autonomous driving will also allow us to do different things inside the car. “You can talk with your family, you can play games or watch a movie, you can work, you can even sleep. So we have to create this environment that differentiates our car of the future from other cars, and that gives you the sense of something that you might even call a mobile home. And I think that’s where the new competitive environment will be.”
Of course, that all assumes that robotic cars can be made to work, and that is far from certain. Apart from the technological, legal and even moral barriers to doing so, there are suspicions surrounding the constant publicity about autonomous cars. A recent scientific paper, “The Attachments of ‘Autonomous’ Vehicles”, by Chris Tennant and Jack Stilgoe at University College London, quoted one interviewee as saying: “We have people in the industry who want to pump up the value of their companies, both big well-established companies and start-ups, ... one company goes out and makes an aggressive claim, and all the competitors have to make sure they’re not perceived to be left behind, so they’ve got to match it.” In other words, a lot of the hype surrounding self-driving cars is arguably just that — hype and nothing more.
3. A lithium shortage
We’ve seen this year how badly the shortage of computer chips can affect car production. Worse could be yet to come. There are warnings that, by 2022, we could be facing a serious shortage of lithium, a key mineral component not just of car batteries, but of the batteries in everything from phones to laptops. The solution? Building cars with smaller batteries and shorter ranges helps, but that leaves consumers spending more time at charging points. Recycling existing batteries is arguably the better option.
Take Renault’s factory in the towns of Flins and Aubergenville, just to the west of Paris. It’s been a car factory since 1952, and has made such familiar Renault products as the 4 and the 5 models, the Twingo and the Clio. Today, it builds the Clio, the all-electric Zoe and the Micra, for Renault’s partner company Nissan.
Not for much longer, though. The entire Flins site is itself soon to be recycled, and turned from a place that assembles cars into one that disassembles them. Renault says that Flins will become a “Re-factory”, where old cars will be taken apart, and their components, right down to the very raw materials, will be used. The idea is that by 2030, the work at Flins will be not only CO2-neutral, it will be CO2-negative, as the work there will trigger reductions in emissions in other parts of the car supply chain, especially in the extraction of raw materials.
“With the Re-factory, Flins will become a European reference in the circular economy. Re-factory will enable [Renault] to respond to the challenges facing mobility and automotive industry players today — and even more so tomorrow,” said Luca de Meo, chief executive of Renault. “This plant, with an objective of a negative CO2 balance by 2030, is fully in line with the Group’s global strategy by combining circular economy, reduction of emissions, development of skills and the creation of new value-generating activities.”
4. Recycling the whole car
Recycling battery components would be good, but what about the rest of the car? The race is on to create a car that can not only be fully recycled, but that is entirely — or as much as possible — made from recycled materials. It’s trickier than it sounds. If you’re going to maintain modern safety standards, it’s difficult to use recycled steel and aluminium for major load-bearing structural components. But the plan is eventually to build cars that are entirely “circular” — which can be recycled over and over again.
To show how this can be done, Mini recently collaborated — not for the first time — with legendary British fashion designer Paul Smith to create a Mini that used as many recycled and environmentally friendly components as possible. The finished car isn’t even painted — aside from a thin transparent film sprayed on to protect against corrosion — and comes complete with grinding marks and imperfections that are normally painted over. Even the wheel-arch extensions and exterior components have been attached with screw heads and bolt heads left exposed. Smith is a keen cycler, and the look of the Mini was apparently inspired by the mechanical simplicity of bicycles.
Some of the exterior plastic trim has been 3D-printed using recycled plastic salvaged from the sea. Meanwhile, the trim on the grille and the aerodynamic covers on the wheels are made from recycled Perspex, as is the huge panoramic sunroof.
Inside, almost all of the trim has been removed — aside from the dashboard itself, the dash top and the parcel shelf in the back. Everything else you see is the exposed steel of the car’s construction, albeit painted in Smith’s signature dark blue hue. The big screen that takes up the centre of a standard Mini’s dash has been deleted, and in its place is a simple mobile phone holder that connects your phone to the car and turns it into the Mini’s media centre.
The seats aren’t leather, but instead are a simple woven fabric. The floor mats are made from recycled rubber. The panels that cover the dash and door tops are made from recycled cork. According to Mini: “Due to cork’s recyclability and its status as a renewable raw material that actually ‘fixes’ carbon dioxide during its production, there is potential here for reducing greenhouse gases.”