$5 trillion economic value at stake: digitization of road transportation

$5 Trillion Economic Value at Stake: Digitization of Road Transportation Andreas Mai Former Director Smart Connected Vehicles, Cisco Systems November 2016

$1,254

$1,251

$895

$884

$790

V@S [$ Billion]

Self-Driven-Vehicle

Connected Vehicle

Mobility-as-a-Service

Intelligent Transportation System

Advanced Driving Assistance System

Five key value drivers of the ‘Digitization of Transportation’ – ADAS and ITS account for half of the global V@S

$5.0 Trillion

Global – Digitization of Transportation: Total V@S 2017-26 & 7% Discount by Vehicle Type [USD Billion]

Source: Digitization of Road Transportation V@S Model, Andreas Mai, 2016

For cars, highest V@S with ADAS and Mobility-as-a-Service – For trucks, ITS and connected fleet drive most of the V@S

$5.0 Trillion $3.4 Trillion V@S by Vehicle Type Global – Digitization of Transportation: Total V@S 2017 – 26 Discounted @ 7% by Vehicle Type [USD Billion]

$1,254 $342 $912

$1,251 $784

$467

$895 $0

$895

$884 $386 $498

$790 $128 $662

All Vehicles All Trucks All Cars

Self-Driven-Vehicle

Connected Vehicle

Mobility-as-a-Service

Intelligent Transportation System Advanced Driving Assistance System

$1.6 Trillion


$5,470

$4,057

$1,915 $3,199

$3,170

$5,074

Cost Reduction Gross Margin Increase

Cost Avoidance Gross Margin Reduction

Cost Increase Net Impact

V@S Model integrates over 450 effects and the resulting creation and migration of values between stakeholders Global – Digitization of Transportation Value Creation, Migration & V@S by Value Type 2017-26 [USD Billion]

•  Crashes (Society) •  Congestion •  Parking space

•  MaaS cost/ Mile •  Insurance (Owner) •  Crashes (Owner)

•  New MaaS business •  People mobility GDP •  L2-5 system (Auto)

•  L2-L5 system (Owner)

•  More SDV VMT •  Data services

•  Taxi price/ share •  Insurance •  Repairs (Dealer)

Value Creation Value Migration V@S

$ 11.4 Trillion $ 6.4 Trillion $ 5.0 Trillion


The V@S of Mobility-as-a Service and self-driven vehicles increases over 70% for each 1% point penetration

$48

$86

$291

$555

$685

$0 $500 $1,000 $1,500 $2,000

Connected

ADAS

ITS

SDV

MaaS

1% 5%

7%

70%

23%

77%

Penetration

Global – Digitization of Transportation: Annual V@S Uplift of 1% Point Vehicle Penetration [% and $ Billion]

$5.1

$1.7

V@S [$ Trillion]

Higher

33%


($599)

($65) ($54) ($24)

Half of the V@S is societal – biggest winners are owner, insurer & auto; drivers & car rental are likely losers Global – Digitization of Transportation: Winners & Losers V@S 2017 – 2026 @ 7% Discount [USD Billion]

$1,128

$638

$566 $324 $235 $206 $152

V@S [$ Billion]

Oil

MSP

NewCo

ITS

Auto

Insurer

Owner

$2.5

$2.5

V@S [$ Trillion]

$5.0 Trillion

Society

Winners & Losers

$3.2 Trillion Losers $0.7 Trillion

Driver

Rental Medical Legal

Winners


Significant global societal benefits over the next decade

1 Million 19 Million 12 Million

250 Billion Hours = 140 Million Work Years = 30 Million Years = 400,000 Lifetimes

Global – Digitization of Transportation: Societal Value 2017 – 2026

+185,000 +3.0 Million +2 Million

+ 1% Point Penetration

+100 Billion Hours


Autopilot Assisted

North America: Unlocking the Hidden Value of Driving Time

Connected

2,400

880

80 Value $3,360

Work

Media

Rest 0 56%

Shop

1 @ 1.25 vehicle occupancy 2 Congestion, traffic light stops, looking for parking

113 Traffic Inefficiencies 2

2015

580 Hours Driving Time per Vehicle per Year 1

Value of Driving Time


Globally: Saving 5.8 Million tanker trucks of fuel – plus 1,500 supertankers of emissions

Emissions Avoided 480 Million Metric Tons = 1,500 Supertankers

Fuel Saved 200 Billion Liters = 5.8 Million Tanker Trucks

2.0 x

Equator

Global – Digitization of Transportation: Societal Environmental Value 2017 – 2026


SDV increase net fuel consumption by 60 Billion Liters for each 1 percent point higher penetration: Driving EVs?

-

8

(126)

54

4

Connected

ADAS

SDV

ITS

MaaS 1% Point

0%

7%

22%

- 76%

76%

Penetration

= 60 Billion Liters More Fuel (– 30% of Savings)

Global – Digitization of Transportation: Impact of 1% Point Penetration on Fuel 2017–26 [%/ Billion Liters]

47% Empty Miles: Case for Electrification?

More Fuel Consumption Less Fuel Consumption


At 10% of global car population, MaaS has the potential to make 1.7 billion people mobile, especially in Asia & Africa

344.3 458.9 606.2

788.0 995.4

72.3 100.6

139.0

187.3

247.2

0 200 400 600 800

1,000 1,200 1,400 1,600 1,800

0.6% 0.8% 1.1% 1.5% 2.0% 2.7% 3.5% 4.5% 5.9% 7.6% 9.5%

Africa Middle East Latin America Asia Pac Eastern Europe & CIS Western Europe North America

Sensitivity Analysis: Estimated Impact of Global MaaS Fleet on MaaS Members by Region [# MM]

Current V@S Model

2026

Mobility-as-a-Service Fleet in Percent of Total Car Population

MaaS Members [# MM]


MaaS is set to shift new car sales from personal owners in mature markets to emerging markets and fleets

-25 -20 -15 -10

-5 0 5

10 15 20 25 30

0.6% 0.8% 1.1% 1.5% 2.0% 2.7% 3.5% 4.5% 5.9% 7.6% 9.5%

North America

Western Europe

Eastern Europe & CIS

Asia Pac

Latin America

Middle East

Africa

World

Sensitivity Analysis: Estimated Impact of Global MaaS Fleet on Cars Shed/ Sold by Region [# MM]

Current V@S Model

2026

Mobility-as-a-Service Fleet in Percent of Total Car Population

MaaS Fleet Sold [# ‘000]

Cars Shed [# ‘000]


Over 60 Million jobs created for society, fleet owners, ITS and insurers make up for lost jobs of drivers and others

(10.0)

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Other Losers Drivers Other Winners Oil ITS Insurer Owner Society

Global – Digitization of Transportation: Job Creation & Migration by Stakeholder [Million Jobs]

2)

1)

1) Rental, Medical, Legal Industry 2) Auto, MSP, New


15%

19%

20%

24%

25%

33%

41%

45%

31%

22%

33%

28%

25%

20%

22%

17%

13%

17%

25%

27%

17%

19%

15%

19%

19%

15%

11%

12%

18%

21%

11%

15%

22%

26%

11%

9%

16%

8%

10%

4%

Western Europe

North America

Eastern Europe

Latin America

World

Asia Pac

Middle East

Africa

ADAS ITS Connected MaaS SDV

V@S per vehicle type varies across the globe = different digitization of transportation priorities for regions & countries Global – Digitization of Transportation: Total V@S 2017 – 2026 @ 7% Discount by Region & Vehicle Type [%]

$5.0 Trillion

$1,812

$1,480

$928

$389 $465

V@S

Rest of World

Latin America

North America

Western Europe

Asia Pac

1) Eastern Europe & CIS, Africa, Middle East

1)


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Digitization of Road Transportation Global Value at Stake

Regional Comparison Different Priorities

Regional Strategies Value for Money

Stakeholder Strategies Winners and Losers

$5 trillion economic value at stake: digitization of road transportation

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