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5 Ways the Car Industry Will Transform by 2050

Did you ever wonder what driving will be like in 2050? All indications are that it will be radically different from today. Indeed, most analysts believe that the car industry is on the cusp of a fundamental reorganization not witnessed since the birth of the automobile at the beginning of the 20th Century. So what sort of changes are we likely to see and what are the implications for our daily lives?

Mercedes F 015 Autonomous Concept Car
Mercedes F 015 Autonomous Concept Car

1. Fewer combustion engines

Let’s get the most obvious change out of the way first. Due to increasingly stringent emissions standards, the industry will transition away from producing classic internal combustion engines powered by petrol and diesel, and move towards battery electric, hybrid, hydrogen and bio-fuel powertrains. In the UK, for example, 50% of all new car sales will need to be ultra-low emission by 2030. The EU legislation has not yet been finalized, but is likely to be similar. A car is considered to be ultra-low emission if it produces less than 75g of carbon per kilometer. For comparison, a new one-liter Ford Fiesta EcoBoost petrol emits 114g per kilometer, which illustrates that a car would need to be at least hybrid to meet this requirement.

2. Fewer private cars

Environmental targets and government legislation mean that manufacturers will not just need to cut emissions, but that there will also need to be an overall reduction in the number of vehicles on the road. So how can car companies survive and maintain profitability in a world of fewer cars? They will need to move away from the existing business model of selling cars to individuals, towards selling access to a network of vehicles.

3. Networks of fully-autonomous vehicles

So let’s say you commute from a suburb to a city-center office each day by train, but the station is a little bit too far from your house to make walking a practical option. In 2050, you will use an App to locate the closest vehicle to your home, which will then autonomously drive to your address. You can then either take control of the vehicle and drive it to the train station or enable autonomous driving and catch up on some work or sleep en route. Once you have reached the station, the car will drive on to meet the next customer.

Mobility Vehicle: the Renault EZ-GO concept
Mobility Vehicle: the Renault EZ-GO concept

4. Much fewer parked cars

Such an autonomous ride-hailing service would be cheaper than owning a car for the user and would enable vehicles to be in use for a much greater percentage of their life span. While today, the average car is parked 95% of the time, this business model could reverse those figures, enabling car firms to extract more revenue from fewer vehicles by keeping them on the road more often. Less need for parking spaces would mean that roads could be widened with extra lanes to help reduce congestion.  

This model will be especially important for the viability of battery electric vehicles, which create 57% more carbon emissions than standard cars during production, but are much more efficient to run thereafter. In fact, studies indicate that over the entire life cycle of an electric vehicle, 46% of the total carbon footprint is generated at the factory. Thus, by keeping vehicles on the road more often, the carbon footprint per kilometer will significantly drop. In total, McKinsey predicts that by 2030, 80% of the car industry’s profits will stem from ACES (automated, electric, connected and shared) vehicles and services.

5. New business model

Successful firms in the tech industry will need to move away from just manufacturing cars, towards providing the physical and digital infrastructure to make smart mobility possible. Some of the biggest players in the auto industry in future will be more akin to tech firms or service providers rather than classic vehicle manufacturers. Most of the largest firms in the car industry are already making plans to prepare for this transition. This is illustrated by the fact that in 2016, half of all investment in research and development in the automotive industry globally was directed towards advanced driver assistance systems (ADAS). Here, the traditional players are joined by tech giants like Google’s parent company Alphabet in the race to develop safe and reliable self-driving vehicles.

Of course, all of this does not mean that nobody will own their own cars in future, or that petrol cars will be completely abolished. However, a growing distinction is likely to emerge between “mobility”, which will be strictly about travelling from A to B, and “driving”, which is likely to become more of a niche leisure pursuit for car enthusiasts. Sitting in traffic jams will hopefully be resigned to the dustbin of history, but just as there are still people who enjoy listening to vinyl in the digital age, there will always be those who occasionally enjoy driving a roaring V-12 in the age of mobility.

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