Mobility Investments in The Next Normal

McKinsey Center for Future Mobility
Mobility investments
in the next normal
A new survey looks at the impact of the COVID-19 pandemic
on consumer sentiment, which could influence future
mobility investments.
by Matias Garibaldi, Eric Hannon, Kersten Heineke, and Emily Shao
© 3alexd/Getty Images
March 2021
Mobility significantly decreased in many regions as the COVID-19 pandemic spread in 2020. With industry
stakeholders focused on keeping their businesses running, preserving margins, and protecting employees,
it sometimes seemed as if the sector was at a standstill. After all, companies that were struggling to survive
would likely gain little by investing in innovative technologies or mobility services. And with car sales
plummeting, few consumers appeared willing or able to purchase new vehicles.
This view of the mobility industry, however, fails to account for several important developments. Although
the COVID-19 pandemic has temporarily slowed growth, the mobility sector is undergoing a profound
transformation and opening new opportunities for players that are willing to invest in vehicle electrification,
autonomous driving, and other revolutionary products and services. What’s more, our recent consumer
survey of around 7,000 respondents worldwide, conducted in cooperation with the World Economic Forum,
has highlighted several trends that make it imperative for mobility players to act now if they want to emerge
stronger in the next normal.1 Here’s what we found.
Positive consumer sentiment could boost the mobility industry

While the COVID-19 pandemic has created challenges for both automotive manufacturing and sales, OEMs
could benefit from favorable consumer sentiment. Across regions, our survey revealed that the number
of respondents with a positive view of OEMs had increased since the pandemic began, with the greatest
growth occurring in Asia (Exhibit 1).
Web <2020>
<Mobility>
Exhibit <1> of <8>
Exhibit 1
Automotive consumers now view original-equipment manufacturers more
Automotive consumers now view original-equipment manufacturers more
favorably than they did before the COVID-19 pandemic.
favorably than they did before the COVID-19 pandemic.
Consumer opinions on automotive OEMs,1 % of respondents
Asia Europe North America

(n= 2,562) (n= 5,155) (n= 1,306)
Mostly negative 3 2 4 5 4 4
9 7 7 8
Slightly negative 11 12
50 48
Indifferent 60 +12 58 55 +7
percentage 67 percentage
points points
+7
percentage
points
25 25
21
Slightly positive 21
20
13
16 15
Mostly positive 7 12
4 5
Before After Before After Before After
COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19
Note: Figures may not sum to 100%, because of rounding.

Question: How would you rate your sentiment toward automotive manufacturers before and after COVID-19, given automotive manufacturers’ response to
1
COVID-19 (eg, manufacturing of medical equipment, furlough of employees, reduction of manufacturing capacity, safety of employees, government subsidies)?
Source: Global COVID-19 Automation Consumer Survey, a joint survey from McKinsey and the World Economic Forum, September 2020
1
The Global COVID-19 Automation Consumer Survey, a joint survey from McKinsey and the World Economic Forum, was conducted in August
and September 2020. It involved around 7,000 consumers from seven countries in Asia, Europe, and North America.
2 Mobility investments in the next normal

COVID-19 has increased interest in low-emissions transportation
The COVID-19 pandemic appears to have increased consumer awareness about the negative effects of
travel, including congested roads and heavy emissions. Annual global passenger plug-in electric vehicle
(EV) sales hit three million in 2020—a more than 40 percent year-on-year increase—with 46 percent of
fiscal-year sales coming from Europe, 39 percent from China, and 12 percent from North America.2 In our
survey, many respondents stated that they were now more interested in battery-electric vehicles (BEVs)
and partial-hybrid electric vehicles (PHEV) (Exhibit 2). Europe was the only region where interest in BEVs
and PHEVs declined. This trend is somewhat paradoxical, since Europe still has the highest EV sales, and
may be occurring because European respondents are becoming more concerned about vehicle ownership
in general. More than 55 percent of survey respondents from North America, which has lagged in EV sales
compared to Asia and Europe, expressed increased interest in these vehicles. More importantly, when
asked about the factors contributing to their interests, respondents across regions were most likely to cite
increased sustainability concerns and air-quality improvements.
Web <2020>
<Mobility>
Exhibit
Exhibit <2>2of <8>
The
TheCOVID-19
COVID-19pandemic
pandemichas hasincreased
increasedconsumer
consumerinterest
interestin
inbattery
batteryelectric
electric
vehicles
vehicles and
and partial-hybrid
partial-hybridelectric
electricvehicles.
vehicles.
Did COVID-19 change your interest in What are the top 3 reasons why you now
buying an electric/hybrid¹ vehicle? consider electric/hybrid¹ vehicles more?
% of respondents % of respondents
Significantly more 10 8 13 14
Ability to charge in private areas 16
28
21
Recent air-quality improvements 12 21 19
Slightly more 36
Insensitivity to gasoline prices 10
28 11 13
Lower cost of ownership 9
38
10
14
Increased purchasing power² 19
No change 37 9
Recent exposure to 16
27
electric-vehicle driving 12 14
6
33
Slightly less Increased sustainability concerns 22 18 20

17 17
Asia Europe North Asia Europe North

America America

¹Battery electric vehicles and partial-hybrid electric vehicles.
²Increased purchasing power through government incentives.
2
“EV tracker—full year 2020: EV sales hit 3 million (+40% YoY) despite pandemic, as December hits all-time high (+120% YoY),” Bernstein Research,
February 3, 2021, bernsteinresearch.com.
Mobility investments in the next normal 3

The shift in consumer sentiment could have implications for commercial transport. More than 70 percent
of survey respondents stated that delivery of goods should shift from vehicles with internal combustion
engines (ICE) to BEVs or H2EVs (also known as hydrogen fuel-cell plug-in hybrid electric vehicles) for long-
haul trucking and intracity transport (Exhibit 3). Surprisingly, more than 40 percent of respondents in all
regions stated that they were willing to pay a premium to enable this shift. Anecdotal evidence from online
retailers indicates that actions are still lagging sentiment, however, as the percentage of consumers willing
to pay to offset the carbon from their delivery appears to be lower.
Web <2020>
<Mobility>
Exhibit 3
Exhibit <3> of <8>
A majority
A majorityof
ofconsumers
consumers believe
believe that
that electric
electric vehicles
vehicles should
should handle
handle long-haul
long-haul
trucking and intracity delivery; many are willing to pay a premium for thethe
trucking and intracity delivery; many are willing to pay a premium for shift.
shift.
How important is it that long-haul If you believe that alternative-energy hauling
trucking switch to alternative energy?¹ is important, how much more would you pay?
% of respondents % of respondents
2 3 5 ≥10.0%
3 1
Extremely 2
17 17 11 >7.5%
important 15
33 15
>5.0%
>2.5%
27 24
24 Indifferent to the
Moderately 37 28 delivery method
important
of the product
38 0% I would choose
28 35 25 the product, but I
31 would not pay more
Slightly
important 36
21
29
28 21 25
Not at all 10
important 8
America America

¹Switch from internal-combustion to battery or hydrogen electric vehicles.
In another major shift, low-emissions manufacturing is becoming more vital. Of the survey respondents
who were considering an EV purchase, over half stated that it was a moderately or extremely important
consideration (Exhibit 4). This development suggests that changing consumer sentiment will affect not
only vehicle sales but also the entire supply chain. Many respondents were also interested in end-of-life
vehicle recycling.

Web <2020>
<Mobility>
Exhibit
Exhibit <4>4of <8>
Manypotential
Many potentialelectric-vehicle
electric-vehicle buyers valued
valued low-emissions
low-emissions manufacturing and
and end-of-vehicle-life recycling.
end-of-vehicle-life recycling.
How important is low-emissions manufacturing How important is end-of-vehicle-life recycling
to your electric-vehicle purchase? to your electric-vehicle purchase?
% of respondents¹ % of respondents¹
Extremely Extremely 16
important 20 important 22
26
37 34
Moderately
Moderately important 39
37 32
important
36
37
38
Slightly 31
Slightly important 37
34 29
important
23
20
Not at all Not at all 15
important 8 9 8 6
5 important
America America

Respondents restricted to those who were considering an electric-vehicle purchase.
1
Of the survey respondents who were

considering an electric-vehicle purchase,
over half stated that low-emissions
manufacturing was a moderately or
extremely important consideration.

The survey also showed that use of sustainable materials was an important consideration for
potential EV buyers (Exhibit 5). Use of a local manufacturer was also moderately to extremely important
to many respondents.
Web <2020>
<Mobility>
Exhibit 5
Exhibit <5> of <8>
Manypotential
Many potentialelectric-vehicle
electric-vehicle buyers
buyers were
were interested
interested in
in the
the use
use of
of sustainable
sustainable
materials and local manufacturing.
materials and local manufacturing.
How important is use of sustainable materials in How important is local manufacturing
manufacturing to your electric-vehicle purchase? to your electric-vehicle purchase?
% of respondents¹ % of respondents¹
Extremely 11 13
Extremely 19 20 19
important
important 30
Moderately
26
important 27
Moderately 30
39 35
important
39 Slightly
important 32
32
35
Slightly 30
important 34
25 Not at all
important 32 27
Not at all 15 16
9 7
important
America America

Respondents restricted to those who were considering an electric-vehicle purchase.
1
COVID-19 has increased interest in autonomous driving, but many

barriers remain
Our survey showed that the COVID-19 pandemic has made consumers more likely to use delivery
services, via traditional methods and autonomous technology. Similar trends were seen across regions,
and Exhibit 6 shows the results for North America, as an example. Both quarantine restrictions and the
desire to limit human contact are contributing to these results. The next normal has accelerated the interest
in autonomous technology, with the number of North American respondents stating that they would be
extremely or somewhat likely to take deliveries from autonomous vehicles (AVs) increasing from 18 percent
to 28 percent. There was a more modest uptick in the number who were willing to use AVs for people
transport. This shift in consumer sentiment and acceptance could unlock opportunities for AV players
to test, pilot, and deploy AV deliveries.

Web <2020>
<Mobility>
Exhibit <6> of <8>
Exhibit 6
The
TheCOVID-19
COVID-19pandemic
pandemichas
hasaccelerated
accelerated consumers’ interest in
consumers’ interest in autonomous-
autonomous-
vehicle delivery.
vehicle delivery.
Opinions on traditional delivery and autonomous-vehicle (AV) delivery,
% of North American respondents
Traditional delivery,¹ AV goods delivery,² AV people transportation,³

(n= 1,306) (n= 5,155) (n= 2,562)
Mostly unlikely
19 15
27
33
39
Slightly unlikely 12 14 40
+5 16
13
Neither likely 29 26 percentage 14

points 18
or unlikley
32 +9
32
percentage +6
points 24 percentage
27 26 points
23
Somewhat likely
18
13
12 9
17 18
Extremely likely 6 10 7 10
Before After Before After Before After
COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19

¹Question: How likely would you use traditional delivery of food and packages straight to your door? ²Question: How likely would you use a self-driving
robot/vehicle for delivery of food and packages? ³Question: How likely would you use a fully autonomous vehicle to transport you from point A to B?
Despite the growing acceptance

of autonomous vehicles, OEMs
and other stakeholders face many
barriers to adoption.

Despite the growing acceptance of AVs, OEMs and other stakeholders face many barriers to adoption.
Overall knowledge of this technology is still relatively low, with many respondents stating that they had
never heard of AVs or advanced driver-assistance systems (ADAS), or that they did not fully understand the
meaning of these terms (Exhibit 7).
Web <2020>
<Mobility>
Exhibit <7> of <8>
Exhibit 7
Most
Most people
people cannot
cannot differentiate between advanced
differentiate between advanceddriver-assistance
driver-assistancesystems
systems
and autonomous vehicles.
and autonomous vehicles.
Knowledge of advanced driver-assistance systems (ADAS) and autonomous vehicles (AVs),¹
% of respondents
AVs are more advanced than ADAS 10 9 11 10

ADAS are more advanced than AVs 4 4 5 4
I am familiar with ADAS and AVs 17 19 18

and use the terms interchangeably 18
I have heard of ADAS and AVs 34

but do not know what they mean 42 41 40
32
I have not heard of ADAS and AVs 27 26 27
Asia–Pacific Europe North America Total

¹Question: When thinking of advanced vehicles and autonomous features, which of the following statements are most representative?
(For Asia–Pacific, n = 1,308; for Europe, n = 2,554; for North America, n = 735; Total n = 4,597.)
The lack of consumer education contributes to the relatively low trust in AVs—something that is still
pronounced despite the increase in the number of people willing to use them. When we asked survey
respondents what kept them from using AVs, most stated that they did not believe the technology was
ready (Exhibit 8). Many others stated that they did not believe AV technology was safer than their own
driving. Overall, trust is so low that almost half of consumers would not trust OEMs, regulatory bodies, or
independent third parties to validate technology.

Web <2020>
<Mobility>
Exhibit
Exhibit <8>8of <8>
The
Themajor
majorfactors
factorspreventing
preventingthe
theadoption
adoption of
of autonomous vehicles include
autonomous vehicles include lack
lack
of trust in the technology and safety concerns.
of trust in the technology and safety concerns.
Key reasons you are not interested in purchasing a vehicle with advanced driver- Top 3 responses
assistance systems (ADAS) or a fully autonomous vehicle (AV),¹ % of respondents
I do not trust that the technology is ready to be used 19 20

23
I do not understand how it works 10 5

5
18
I do not think the technology is safer than my own driving 14 20
I am concerned about my data privacy 6 10
I am concerned about my vehicle being hacked 10 10
12
12
I am concerned about legal issues if there is a crash 17 12
11
I do not think the technology is convenient 9 7
6
Autonomous technology is too expensive 13 14
11
Other
Asia Europe North America

¹Question: What are the key reasons you are not interested in purchasing a vehicle with advanced driver-assistance or fully autonomous features?
Mobility has decreased during the pandemic, but our survey indicates that consumer interest in autonomous
driving and vehicle electrification has accelerated. Players along the mobility chain who want to thrive in
the next normal should consider pivoting their investments to these areas while simultaneously educating
consumers about their benefits. Such educational efforts will be particularly important for AVs, since public
trust remains low and many people are still reluctant to use these vehicles. In addition, the greater openness
of consumers toward autonomous-delivery solutions could make them more familiar with AV technology,
potentially opening more opportunities.
Matias Garibaldi is a consultant in McKinsey’s Seattle office, Eric Hannon and Kersten Heineke are partners in the Frankfurt
office, and Emily Shao is an associate partner in the Silicon Valley office.
Designed by McKinsey Global Publishing

Copyright © 2021 McKinsey & Company. All rights reserved.

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McKinsey Center for Future Mobility

by Matias Garibaldi, Eric Hannon, Kersten Heineke, and Emily Shao

Positive consumer sentiment could boost the mobility industry

Asia Europe North America

Note: Figures may not sum to 100%, because of rounding.

2 Mobility investments in the next normal

Slightly less Increased sustainability concerns 22 18 20

Asia Europe North Asia Europe North

Note: Figures may not sum to 100%, because of rounding.