DIGITAL AUTO REPORT 2020 - NAVIGATING THROUGH A POST-PANDEMIC WORLD - PWC

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DIGITAL AUTO REPORT 2020 - NAVIGATING THROUGH A POST-PANDEMIC WORLD - PWC
Digital Auto Report 2020
Navigating through
a post-pandemic world
DIGITAL AUTO REPORT 2020 - NAVIGATING THROUGH A POST-PANDEMIC WORLD - PWC
Volume 1

                                                              Anticipating post-pandemic
                                                              market dynamics
                                                              • Market outlook – penetration of technologies and mobility types
                                                              • Technology – shifting gears in connected, electric, automated

Digital Auto Report                                           • Customers – changing mobility preferences: shared no more?
                                                              • Regulation – slowdown or acceleration of key policies?

2020 – Volume 1                                               Volume 2

                                                              Rethinking business models and
                                                              investments
                  ✓ Ninth annual Digital Auto Report,         • New business opportunities – hype or reality?
                      developed by Strategy& and PwC
                                                              • Economic value – market growth and unit economics
                  ✓ Global consumer survey with a focus       • Investment strategy – OEMs vs. VCs vs. Tech players
                      on the US, EU and Asia                  • OEM survival guide for a post-crisis market reality
                      (n = 3,000)
                  ✓ Quantitative market outlook until 2035    Volume 3
                      based on regional structural analysis   Building a software-enabled
                  ✓ Interviews and survey with >60 industry   automotive company
                      executives at OEMs and suppliers,
                      leading academics                       • Capabilities of a software-enabled company
                      and industry analysts                   • Deep dive on automated software development and testing
Strategy& | PwC                                               • Capability build-up strategy – a platform approach
                                                                                                                                  2
DIGITAL AUTO REPORT 2020 - NAVIGATING THROUGH A POST-PANDEMIC WORLD - PWC
The mobility ecosystem is transforming into a fragmented
future w/different adoption patterns and use cases by region
Executive summary – Volume 1
• With adjusted technology expectations and changing post-pandemic customer preferences, CASE evolves. Consumers do not expect fully
  automated cars before early 2030s. Shared mobility growth is slowing down, relevance of seamless mobility remains high

• Total vehicle parc expected to shrink in Europe (-0.5% p.a.) while growing in the US (+1.1% p.a.) and China (+3.9% p.a.) until 2035, driven
  by 1) mobility growth (highest in China), 2) customer preferences for sharing (lowest in US) and 3) vehicle disposal rate

• Regulatory requirements are driving basic connectivity in EU and US (>85% penetration of new cars in 2020), while China is still at 44%.
  Total connected vehicle parc will pass 50% mark in Europe by 2025; in US as early as 2023 and in China latest by 2029

• EU and China are leading the e-mobility transformation with expected new car BEV share of 17% and 19% by 2025.
  US significantly lower with 5% by 2025 given fewer government incentives and attractive ICE alternative in terms of TCO

• Automated driving will emerge in a broad spectrum of use cases with specific requirements that are difficult to scale. While e.g. L4 pilot projects
  with people movers are running today, L4 share of new vehicles is expected to reach 17% by 2035 in EU (vs. 16% in China)

• Shifts in individual mobility patterns require a new segmentation in terms of private vs. shared and active vs. passive driving – each with
  multiple use cases at different automation levels. Shared-active (e.g. rental, subscription) expected to grow strongest in EU (10% of total person
  kilometers by 2025), while shared-passive (e.g. ride-hailing) is expected to grow significantly more in China (10% vs. 1-3% in US and EU)

• The increasing proliferation of use cases and business models requires many players to re-evaluate their CASE strategies
  with a fact-based view on available technology, value pool sizes and unit economics as well as investment requirements and right to win
  (→ covered in our next report volume No 2)

Strategy& | PwC            Note: Please refer to respective section for detailed assumptions and sources behind stated propositions                     3
With adjusted technology
expectations and changing
post-pandemic customer                                                                   Connected      Electric

preferences, CASE evolves”

S for Shared becomes
Smart (Mobility)*
                                                                                         Automated   Smart Mobility
*Smart Mobility describes a transportation ecosystem where stakeholders use data and
connectivity to move people and goods sustainably and efficiently.
Shared mobility remains as a sub-segment and an important value pool in this ecosystem
focusing on people transport with passenger vehicles.

Strategy& | PwC                   Source: Strategy&                                                                   4
Triggered by the effects of the COVID-19 pandemic,
many players will have to reevaluate their CASE strategies

      Consumer                          Technology            Connected                  Automated

COVID-19 postpones             COVID-19 shatters old       COVID-19 digitizes         COVID-19 modifies
consumer spend during          industries and will lead    society and increases      competition: Big Tech
lock-downs. Demand             to market shakeout.         acceptance and             benefits, asset-heavy
recovery expected with         Digital and remote          demand for digital – and   OEMs struggle to keep
preference for EV              tech is on the rise         connected – services       up required R&D invest

      Regulation                        Economics              Smart mobility            Electric

COVID-19 imposes               COVID-19 cuts topline,      COVID-19 reverses          COVID-19 cools down
new norms for work             accelerating saving needs   preference for mobility    economies, leads
environments,                  of OEMs and suppliers       modes – own vehicles       governments to subsidize
consumer interactions          as liquidity becomes        regain preference          EVs and increases EV
and international trade        critical to survive         against shared             market demand

Strategy& | PwC     Source: Strategy&                                                                      5
The acceleration of technology penetration will occur at
varying times and speeds globally, as local mobility transforms
Key considerations to anticipate tipping point of exponential technology adoption
                      Technology                            Consumer                                 Regulation                                Economics                   Expected tipping points
                  • Connected service               • “Digitally savvy” share of             • Scope and timing of                     • Indirect value capture by
                    content and UX                    population                               enforced connectivity                     OEM
                                                                                               requirements
                  • Vehicle system/EE               • “Freemium” segment                                                               • Effective end consumer
                    architecture                      services                               • Scope of data privacy                     pricing                      earlier        2030            later
 Connected        • Network infrastructure
                                                                                               restrictions

                  • Battery and powertrain          • Premium/early adopter                  • Emission target levels                  • Superior total cost of
                    performance                       segment size                                                                       ownership (TCO) of BEV
                                                                                             • BEV/PHEV incentives                       vs. ICE in relevant number
                  • EV manufacturability            • “Rational green” segment
                    and production capacity           size                                   • Diesel/ICE                                of segments
                                                                                               bans/restrictions in cities             • Additional
                  • Charging infrastructure                                                                                                                           earlier        2030            later
    Electric                                                                                                                             revenues/savings from
                                                                                                                                         V2G/V2X charging

                  • ADAS capability by use          • Premium/early adopter                  • Scope and timing of                     • Superior TCO vs. non-AV
                    case                              segment size                             enforced ADAS safety                      in first commercial cases
                                                                                               features
                  • Data processing                 • Technology openness                                                              • Additional value capture
                                                                                             • Geographic range and                      from riders
                  • Driver UI                                                                  quantity of AV test drive/                                             earlier        2030            later
 Automated        • Network and traffic                                                        vehicle approvals
                    infrastructure
                  • Smartphone penetration          • Intermodal openness                    • Private car restrictions/               • Superior TCO vs. own
                                                                                               taxes                                     vehicle
                  • Access and fleet                • People/traffic density
                    availability                      “Frequent user” segment                • Passenger transport                     • Dynamic pricing for opt.
                                                      size                                     regulation                                use and availability         earlier        2030            later
    Smart
   Mobility
                                  ADAS = Advanced Driver Assistance Systems; EE = Electric/electronics, V2G = Vehicle to grid, TCO = Total cost of ownership
                                  Note: A tipping point is defined as the start of exponential growth within a segment of the mobility transformation
Strategy& | PwC                   Source: Expert interviews, PwC AutoFacts®, Strategy&                                                                                                                       6
Total car parc growth strongest in China with high penetration
of connected and electric; automation relevant after 2025
Total vehicle parc and technology penetration (in million, %)

                                                                                                                                                                          Assumptions
      New LV sales                                                                                            332                                             350
                          302         308        294        281           281         289         310                                             302
      (million)                                                                                                                       250                      34         • Total vehicle parc driven by
                                                                                                                                197                31                       − Growing economic mobility
                           14          17         17         17            13          16          17          18                                                             demand after COVID-19
      Total LV parc
                                                                                                                                 22    28
      (million)                                                                                                                                                             − Build-up of new mobility fleets
                                                                                                                                                                              with high annual mileage
                                                                                                                                                                            − Disposal of outdated vehicles
                          86%       100% 100% 100%                        87%        100% 100% 100%                                   91%       100% 100%
        Connected                                                                                                               44%                                       • Basic connectivity with high
                                                                                                                                                                            penetration due to regulation in
(eCall, % new LV sales)                                                                                                                                                     US/EU; share with over-the-air
                                                                                                                                                                            (OTA) capability significantly lower
                                                                                                                                                                          • BEV with strong growth in EU/
                                                            67%                                                                                              55%
                                                                                                                                                 33%                        China due to government
          Electric                   17%
                                                34%
                                                                                                             14%                      19%                                   subsidies and earlier “total cost of
                          4%                                               2%         5%          8%                             4%
(BEV, % new LV sales)
                                                                                                                                                                            ownership” parity (vs. ICE) than in
                                                                                                                                                                            the US
                                                                                                                                                                          • Delay of automated vehicle
                                                                                                                                                             16%            penetration at L4/L5 due to
          Automated                              7%         15%                                                                                                             technical challenges and
                          0%          0%                                   0%         0%          1%          2%                 0%   0%          3%
                                                                                                                                                                            investment cuts; L3 with first
(L4/L5, % new LV sales)   2020       2025       2030       2035          2020        2025        2030        2035              2020   2025       2030        2035           useful applications before 2025

Strategy& | PwC                 Source: PwC AutoFacts®, Strategy&   LV = Light Vehicles = Cars + Light Commercial Vehicles < 6t GVW   BEV = Battery Electric Vehicle   ICE = Internal Combustion Engine       7
Connectivity will rapidly penetrate total car parc; OEMs need to
leverage platforms for scale, while maintaining distinct UX
Total vehicle parc and connected car share (in million, %)

                                                                                                                                    350
                                                                                      332
                  302        308                                               310                                    302
                                        294        281           281    289
                  26%                                                                                  250
                            50%                                  32%                                                                72%
                                                                                                 197   35%           56%
                                        78%                             72%                      16%
                                                                               96%    97%
                                                   93%

                  2020      2025        2030      2035           2020   2025   2030   2035      2020   2025          2030          2035

                  Connected Vehicles    Non-Connected Vehicles                                              Source: PwC AutoFacts®, Strategy&

                                       Total vehicle parc expected to shrink in Europe (-0.5% p.a.) while
                                       growing in the US (+1.1% p.a.) and China (+3.9% p.a.) until 2035
                                       – connectivity penetration >50% after 2025 in Europe and US.
Strategy& | PwC                                                                                                                                 8
The shift from conventional to electric powertrains is under-
way; China and Europe head-to-head in market penetration
New vehicle sales by powertrain (in million, %)

                                       17         17                                                 18                                               34
                               17                                                       17           1%
                                       1%         4%                        16                                                          31            5%
                              17%                                           5%          8%          14%
                  14                                                               7%          8%                       28
                                                                13                                  10%
                                       34%
                  4%     3%   9%                                                                                                       33%
                                                                2%     5%                                              19%
                                                                                                           22                                        55%
                                                  67%                                                      4%     1%   6%
                                       10%                                                                                             7%

                                                                            88%         83%         75%
                  93%         74%                               93%                                                                                   9%
                                       55%                                                                 95%         74%
                                                                                                                                       60%
                                                  11%
                                                                                                                                                     32%
                                                  17%

                  2020        2025    2030        2035          2020        2025        2030        2035   2020        2025           2030           2035

                  FCEV        BEV    PHEV     ICE (incl. HEV)                                                                Source: PwC AutoFacts®, Strategy&

                                             Tightening CO2 emission targets in the EU and new
                                             national guidelines in China accelerate BEV penetration
                                             in these regions significantly faster than in the US.
Strategy& | PwC                                                                                                                                                  9
Automated driving will not arrive with a big bang: Various
useful functions and features will pave the way for L4
New vehicle sales by SAE level (in million, %)

                                                17                                     18                                                                    34
                              17        17                                17
                                               1%                                      2%                                                                    1%
                              4%        7%                         16           1%                                                             31
                                               14%                       10%          13%                                                            3%     15%
                                                                   5%                                                          28
                   14                   13%                                                                                                   8%
                                                            13                                                                 1%
                                                14%                                                                                                         18%
                                                                                                                         22

                          96%
                                                                  94%    88%          84%                                      99%            89%
                  100%                  78%                100%
                                               68%                                                                                                          66%
                                                                                                                        100%

                  2020    2025          2030   2035        2020   2025   2030        2035                               2020   2025          2030           2035

                  L0-2   L3        L4    L5                                     SAE = Society of Automotive Engineers               Source: PwC AutoFacts®, Strategy&

                                    Before deploying L4 passenger vehicles at scale, players will push the
                                    next years for specific automated driving applications in transport /
                                    fleets and logistics / industrial areas to recover investments.
Strategy& | PwC                                                                                                                                                     10
Transformation of mobility refocused towards shared active
and passive modes due to COVID-19 and slower automation
Market penetration by mobility mode (in ‘000 trillion person-kilometer, %)

                  4.7           5.1            5.3             5.4                           5.3          6.1        6.4         6.7         8.5         10.4         12.2          13.8
                  6%                                                                         2%           2%         2%          2%                                                  2%
                         2%    10%             16%
                                                                                                   1%           1%          1%          1%   9%     2%   10% 2%       11%
                                                                                                                                                                             2%
                                                                                                                                                                                    12%
                                      3%                      21%
                                               5%
                                                               7%

                  92%                                                                       97%          97%         97%         97%
                               87%                                                                                                           89%         88%          87%           86%
                                               79%
                                                              72%

                  2020         2025            2030           2035                          2020         2025        2030        2035        2020        2025        2030           2035

                  Shared active                      Shared passive                      Private active / passive
                  [e.g. car sharing, rental]         [e.g. ride hailing, (robo-) taxi]   [e.g. own vehicle]                                                 Source: PwC AutoFacts®, Strategy&

                                         Global market remains difficult to address with one mobility
                                         service given high proliferation of different active & passive driving
                                         use cases – new players invest in multi-mode transport platforms.
Strategy& | PwC                                                                                                                                                                             11
This report series lays out in three volumes 1) CASE drivers,
2) economic opportunities, and 3) capability implications
         Volume 1                                    Volume 2       Volume 3

            Consumer       Technology   Regulation    Economics      Capabilities

                       Connected

                       Automated
                                                      Opportunity      Build-up
                                                       sizing and        and
                       Smart Mobility                 investments     partnering

                       Electric

Strategy& | PwC                                                                     12
Volume         1
 Strategy& | PwC
                   Anticipating post-pandemic
                   market dynamics
                                                13
Digital Auto Report 2020 – Volume 1

                                       Consumer             Technology      Regulation

                                                     Connected
Consumers are seeking
convenient and safe                                  Electric
mobility – private
transport modes regain                               Automated
importance”
                                                     Smart Mobility

Strategy& | PwC   Source: Strategy&                                                  14
Consumer – Overview

      Survey among 3,000 consumers in Germany, the US and
      China shows latest shifts in consumer mobility preferences
                                                                                                                                                             Key results
                3                                          >20                                  >3,000                                                                       • Respondents confirm relevance of connected
          regions                                   questions                                  Respondents1)                                                                   services – security & navigation most important
                                                                                                                                                                             • However, willingness to pay overall lower than
                                                                                                                                                                               most OEMs hoped for
                    n = 1,0001)                                n = 1,000                                n = 1,000
                                                                                                                                                                             • Consumers expect AD vehicles in the early
                                                                                                                                                                               2030’s; first in transportation, later in private cars
Gender                    49            51                           49              51                       51             49
(%)                                                                                                                                                                          • Two thirds of respondents would use
                                                                                                                                                                               automated vehicles; of those 75% would pay a
                                                                                                                                                                               premium for an automated driving of 5 – 20%
Age                 17 15 15 19           34                     22 17 16 18              27              21 21        27     17 14                                            per ride
(%)

                                                                                                                                                                             • While new car purchase options lead across
                         18-29        30-39        40-49       50-59        60+
                                                                                                                                                                               regions pre- and post-pandemic, interest in car
Gross                                                                                                                                                                          subscription is growing strongly in China
monthly
household               26       40       29                   10 15            70                         29         47            23                                       • Regular cleaning / disinfection has become
income2)                                                                                                                                                                       most important feature for shared mobility
(%)
                                                                                                                                                                               offerings to ensure usage during COVID-19
                         4,000 USD

      Strategy& | PwC                               1) Questions on COVID19 effects of mobility behaviour in DE partially n=2,000    2) converted from EUR/CNY (Mid of August 2020)          Remaining % up to 100% “not specified”   15
Consumer – Connected

Respondents highlight the importance of connected services -
– safety and navigation rated as most important features
Connected services – By importance for consumers1)

                                                                                                                                    Question: “Which connected
                     Safety                    80%                                            90%                           93%     service categories are
                                                                                                                                    particularly important to you?”
                  Navigation                 75%                                            83%                         92%

               Vehicle
                                        58%                                             71%                            84%
           management

       Vehicle features
                                        58%                                            68%                             83%
          as a service

          Infotainment/                                                                                                           In Germany in particular,
                                    47%                                               63%                              79%
        Enterntainment                                                                                                            safety and navigation rank
   Mirror smartphone                                                                                                              as most important services.
                                   42%                                                 67%                            74%
                in car
                                                                                                                                  Winning consumers in other
           Lifestyle and
                 comfort
                                  39%                                               59%                               71%         categories requires strong
                                                                                                                                  USP and compelling story.

                               1) Share of respondents, who want to have connected services in their vehicles
Strategy& | PwC                Source: PwC Strategy& consumer research 2020; n=3,000 (1,000 DE, 1,000 US, 1,000 CN)                                                   16
Consumer – Connected

Customers want in-vehicle connected services; however,
willingness to pay might be lower than OEMs hope
Connected services – Willingness to pay1)

         Willingness to pay                  vs.                 reference prices of other digital & media services                                                             Question: “Would you like to have
                                                                                                                                                                                Connected Car services integrated
      Fully-fledged connected                          Spotify                   Mobile voice &              Premium                    iPhone                                  in your vehicle and are you willing to
      service offering                                 subscription2             data contract               sports stream3)            leasing4)                               pay a surcharge for this? If yes, how
                                                                                                                                                                                much…”

                    $ 19.5
                    at 31%                                  $ 11.9                    $ 34.6                     $ 14.2                    $ 39.5
                  willingness

                    $ 17.6                                                                                                                                                China with highest share of
                    at 40%                                  $ 10.0                    $ 43.6                     $ 19.9                    $ 35.3                         consumers (58%) who are
                  willingness                                                                                                                                             willing to pay an extra for
                                                                                                                                                                          connected services .
                      $ 4.3
                    at 58%                                     n/a                     $ 9.8                     $ 10.3                    $ 33.4                         Capturing this value requires
                  willingness                                                                                                                                             providers to compete partially
                                                                                                                                                                          against other digital services.

                      1) Local currency conversion to USD as of mid of August 2020 2) “Individual” plan 3) DAZN basic package for GER and USA, basic Tencent package in China   4) iPhone 11 64GB, 24 months leasing
Strategy& | PwC       Source: PwC Strategy& consumer research 2020; n=3,000 (1,000 DE, 1,000 US, 1,000 CN); International Telecommunication Union 2019                                                                   17
Consumer – Electric

Gasoline still most preferred type of powertrain in Germany and
the US; hybrid gains popularity and is most popular in China
Preferred type of powertrain by age (%)

                                                                                                                                                                                         Question: “Suppose you wanted to
                                                                                                                                                                                         buy a car: Leaving aside financial
                                                                                                                                                                                         aspects, legal requirements and
                  Gasoline Diesel                     Gasoline                    Diesel          Gasoline Diesel                        Age segment
                                                                                                                                                                                         lack of infrastructure […] – which
                                                                                                                                     60 years
                          47                                          67                   Σ 67       39

                  PHEV          BEV                   PHEV     BEV                                    PHEV          BEV                                                             While 68% of Chinese
                                                                                                                                                                                    consumers below 40 years prefer
                    24         22     Σ 46               23       14       Σ 37                           46             22     Σ 68                                                electric powertrains over
                                                                                                                                                                                    gasoline, only 46% in Germany
       PHEV
                     32         16       Σ 48            24       8 Σ 32                              39           18        Σ 57                                                   and 37% in the US share this
       & BEV
                                                                                                                                                                                    preference.
                     33        12 Σ 45                    25      7 Σ 32                               45               17    Σ 62

Strategy& | PwC                           Source: PwC Strategy& consumer research 2020; n=2,000 DE, n=1,000 US, n=1,000 CN                        Percentages may not total 100% due to rounding                              18
Consumer – Automated

 Two thirds of respondents would use automated vehicles; of those,
 75% would pay a premium for an automated driving service
 Automated driving – Consumer attitude, impact factors and willingness to pay

                   Attitude towards AV (%)
                                                                                                                                                                                                     47%         44%
                                                                                                                               37%                                                                                         41%
                                                                                                                                            26%                     29%        26%
                                                                                                                                                          23%                            23%
                                                                              Top 3 Persuasive
     would
                    36
                                                                              factors for using AV
    use AV                   38                                               (% of respondents)                             Curious Accident            Road      Curious Accident Use time        Relax      Accident Use time
                                                                                                                              about     and              traffic    about     and    for other       while        and    for other
                                                  59                                                                         driving speeding            safety    driving speeding activities      driving    speeding activities
                                                                                                                               AV    reduction                       AV    reduction                           reduction

 would use                                                                    Willingness to Pay
AV only at                                                                    “Would you be willing to pay a                                       Premium                           Premium                            Premium
                    28       26
low speed/                                                                    premium for an AV (e.g. car
   parking                                                                    sharing, ride hailing)? If yes,                           10             2 €                    10        2 $                    20          1¥
                                                                              how much more would you                              Base price                           Base price                         Base price
                                                                              pay for a 5 km trip with a base
                                                                              price of 10 €/10$/20¥?”
   would                                          32
  not use           36       36                                                                                                                      Lack of                            Lack of                          Lack of
       AV                                                                                                                     Desire       Loss of trust in AD      Desire    Loss of trust in AD    Desire    Loss of trust in AD
                                                                              Top 3 Deterrent                                to drive      control technology      to drive   control technology    to drive   control technology
                                                   9                          factors for using AV
                                                                                                                                                                                                      7%         4%        3%
                                                                              (% of respondents)
                    DE       US                  CN                                                                                                       15%                            14%
                                                                                                                                            22%                                19%
                                                                                                                               32%                                  34%
                                  Source: PwC Strategy& consumer research 2020; n=3,000 (1,000 DE, 1,000 US, 1,000 CN)
 Strategy& | PwC                  * Average willingness-to-pay a premium for a 5km ride with an automated vehicle instead of having a chauffeur or self-drive                                                                    19
Consumer – Smart mobility

Mobility modes shift due to effects of COVID-19 – use of own
vehicle preferred over shared mobility and public transport
Mobility pattern after COVID-19 restrictions (%)1)

                                                                                                                                                                         Question: “Assuming COVID-19
                                                                                                                                                                         restrictions are lifted again, how
                                                                                                                                                                         would you use the following mobility
              Own
              bike
                          33        32              35                    35          25             40                  35                  27             37           modes compared to pre-COVID-19
                                                                                                                                                                         times?”
          By foot         32        38              30                     44              26         30                     43                   31             26

        Own car           31         45              24                         67                   24    9                      60                   24         15

          Public
                     10        25              64                    22         21              56                     23          27                  50
       transport
         Shared                                                                                                                                                        Own car is the clear winner in the
          micro-     7 15                 79                         22         22              57                       34                  27             39         US and China. In Germany, the
         mobility                                                                                                                                                      intended increase of car usage
            Car-
                     5    18              77                         22         22              56                     25              24              51
                                                                                                                                                                       is on par with bike and foot.
         sharing

           Taxi,                                                                                                                                                       At the same time, Germans move
                     4    20              76                          25         22             53                      30                  27              43
         Uber, …                                                                                                                                                       away strongly from shared modes.
                          More      Same             Less

                                     1) On the example of transportation to/from work
Strategy& | PwC                      Source: PwC Strategy& consumer research 2020; n=1,259 DE, n=593 US, n=779 CN; Percentage may not total 100% due to rounding                                                20
Consumer – Smart mobility

Shared mobility providers win consumers back with clear
disinfection concepts rather than with lower prices
Attitude towards shared mobility after COVID-19 lockdown (%)

                                                                                                                                                Question: “Which requirements
                                                                                                                                                should providers fulfill to ensure that
                                                                                                                                                you would continue using shared
        42                  58                  17                      83                        2                    98                       mobility offerings after COVID-19
                                                                                                                                                lockdown?
  1| Regular cleaning and
     disinfection by the provider (28%)        1| Regular cleaning and
                                                  disinfection by the provider (50%)                  1| Regular cleaning and
                                                                                                         disinfection by the provider (49%)

  2| Lower/cheaper
     prices (25%)                              2| Lower/cheaper
                                                  prices (40%)                                        2| Provision of disinfectants to/in
                                                                                                         every vehicle (49%)

  3| Reliable availability (24%)               3| Provision of disinfectants to/in
                                                  every vehicle (39%)                                 3| Lower/cheaper
                                                                                                         prices (42%)
                                                                                                                                              In Germany, quality / premium
                   …                                                …                                                  …                      vehicles seen as least important
  8| Offer of gloves and masks in
                                               8| Reserved parking spots
                                                                                                      8| Extensive geographical               factor to return to shared modes –
     the vehicle (15%)                            (26%)                                                  coverage (33%)
                                                                                                                                              after cleaning, price and
                                                                                                                                              availability are most important.
  9| Higher  quality/premium
     vehicles (11%)                            9| Extensive geographical
                                                  coverage (17%)                                      9| Reserved
                                                                                                         (32%)
                                                                                                                  parking spots

    No usage of shared mobility offerings at all        Open towards usage of shared mobility offerings

Strategy& | PwC                     Source: PwC Strategy& consumer research 2020; n=2,000 DE, n=1,000 US, n=1,000 CN                                                                      21
Consumer – Smart Mobility

Purchasing a new vehicle remains preferred option across
regions; China shows strongest increase in subscription intent
Likelihood to buy/lease/subscribe to a car before/after COVID-19 (%)1)

                                                                                                                                                                 Question: “Taking the position of
                                                                                                                                                                 pre-COVID-19, how likely was it that
                                                                                                                                                                 your household would buy, lease or
                                                                                                                                                                 subscribe to a new vehicle in
      Purchase of                 24%                                               46%                                      68%                                 2020/2021? How likely is it now?“
        a new car                21%                                                44%                                         75%

  Purchase/lease                18%                                               40%                                  48%
     of a used car              19%                                              39%                                   52%

          Lease of a         11%                                             29%                                       50%                                   China, and partly the US, are
            new car          10%                                            27%                                         54%                                  open towards subscription
                                                                                                                                                             models.
     Subscription           9%                                             24%                                            62%
                                                                                                                                                             In Germany, further market
     of a new car           8%                                             25%                                               65%
                                                                                                                                                             education needed to win
                                                                                                                                                             subscription customers.

     Likely / very likely before COVID-19       Likely / very likely after COVID-19

                                    1) Before= 1 year ago, after = within next 1-2 years
Strategy& | PwC                     Source: PwC Strategy& consumer research 2020; n=2,000 DE, n=1,000 US, n=1,000 CN    Difference to 100%: no/low likelihood to buy/lease/subscribe a car              22
Digital Auto Report 2020 – Volume 1

                            Consumer             Technology      Regulation

                                          Connected
Technology progresses
fast – yet complexity of                  Electric
autonomous driving has
been underestimated”                      Automated

                                          Smart Mobility

Strategy& | PwC                                                           23
Technology – Connected

In connected services, OEMs are currently rethinking their
“build vs. buy strategy” on key technology components
Connected services components
                  Enabler                               Hardware                              Software                              Integration                          Content/Service                       Sales and CRM

                                                                                                           Plan – Build – Ship – Update – Sunset

 Key value                                                 Vehicle architecture and                                                    User interface and                    Vehicle-based services               Offering bundling and
 blocks               Cloud infrastructure                 ECUs                                   Automotive security
                                                                                                                                       controls                              and apps                             pricing

                                                           I/O devices (e.g., sensors,            Vehicle OS, over-the-air-                                                  3rd party content and                User ID and
                      Mobile/local network                                                                                             System integration
                                                           displays)                              update and cloud platform                                                  services                             personalization

                                                           3rd party hardware (e.g.                                                                                          Cloud/hybrid services incl.
                      Regulation                                                                  Data Analytics                       Data interfaces and APIs                                                   Customer support
                                                           VR glasses)                                                                                                       vehicles health services

Current           •    Cloud infrastructure costs •         Centralized E/E                   •    OTA update functionality        •    UI design (e.g. graphical •           3rd party content and app       •    Subscription vs. life-time
limitations       •    MNO costs                            architecture with zonal           •    Data processing and                  vs. voice only),                      store integration                    offer model
                  •    Regional regulations                 ECUs (see chapter 3)                   intelligent data fusion         •    Online-first vs. offline-first •      Transmission, collection,       •    Customer identification
                                                  •         Sensor fusion and virtual         •    Security of data                •    Open vs. closed APIs                  and analysis of vehicle         •    VIN to UID
                                                            sensors                                connections                                                                health data (e.g. based         •    Data privacy
                                                                                                                                                                              on sensor data)

 Current          •    Leverage eSIMs for              •    Evaluate sweet spot         •          Define software-value-add •          Focus on differentiating         •    Leverage smartphone             •    Bring user sign-up and
 develop-              customers and more                   between complexity                     strategy (see Chapter 3)             adaptive user interface               integration for non-                 log-in journey to perfection
                       frequent MNO tenders                 reduction and profitability •          Use virtualization to     •          Provide and monetize                  connected markets               •    Connect to existing
 ments                                                 •    Enable expendable vehicle              securely separate domains            SDKs and interfaces for                                                    ecosystems (e.g. phone)
                                                            architectures                                                               3rd parties

                                                                                                                                                                                                     Crucial value blocks (own know-how necessary)
                                      CRM: Customer relation management         ECU: Electronic control unit            HW: Hardware        I/O: Input/Output   MNO: Mobile network operator
Strategy& | PwC                       SW: Software        VR: Virtual reality   V2X: Vehicle-to-x communication         Source: Strategy&                                                                                                        24
Technology – Electric

Technology progress in e-mobility must be evaluated in the
context of tech trends across various alternative powertrains
Alternative powertrain developments
                                                                                                                                                                                          –   +
                        ICE                                                       PHEV                                                    BEV                                            H2   O2   FCEV

  Internal combustion engine                                  Electric drivetrain (electric motor, inverter, transmission)                                                       Fuel cell system
                                                              Efficiency improvement                                                           Cost reductions
   Electrification                                                                                                                                                               Stack
         Recuperation and boost as standard                      Silicon carbide power semi-          Bar windings and increased notch              Increased integration of
                                                                 conductor switches (inverter)        filling degree in electric motor                                               Increase of power density
         features with 12V (budget) or 48V                                                                                                          inverter and motor
                                                                                                                                                                                     Optimization of catalyst
         Increased electrification of auxiliaries
                                                                                                                                                                                     compositions (reduction of Pt)
         (water/oil pumps, cam phaser, etc.)                  High voltage system and architecture                                                                                   and nano-scale microstructure
         P2 topology avoiding drag torque                     Architecture                                                                     Auxiliaries                           Optimization of bipolar plate
                                                                                                                                                                                     coatings
   Reduction of friction losses                                  Integration of power-units           Top models up to 800 V,                       Increasing commoditization
                                                                 (OBC, DCDC, DC charger)              standard in volume 400 V                      of electrified auxiliaries
        Coatings and microstructural
        modifications on cylinder                                                                                                                                                 Balance of plants
        Optimization of crankshaft bearings                                                                                                                                           Stack internal humidification
        Ball bearings for turbocharger                        HV  battery system
                                                              System design                                            Cell innovation                                                and simplified water mgmt.

                                                                 Structural integration of       System design            Increased cell capacity through larger cells
   Combustion/emission optimization                                                                                                                                              Tank
                                                                 housing into vehicle body       incl. recyclability      Cathode cost reduction by minimization of cobalt
        Increasing injection pressures                                                                                    content and cobalt-free cells                               Optimization of fiber winding
        Variability in valve trains                                                                                                                                                   layout and process
                                                                                                                          Increased anode energy density via silicon
        Particle filters for most powertrains                                                                                                                                         Mixed materials to reduce
                                                                                                                          Intrinsic safe cells by application of solid state
        including DI gasolines                                                                                                                                                        costs
                                                                                                                          electrolytes (polymers, inorganics, blends)
        Variable compression ratio through                                                                                                                                            Compressed H2 as standard
                                                                                                                          Dry (solvent-free) processing of electrode coatings         for passenger vehicles
        variable connection rod

Strategy& | PwC                           Source: Strategy&                                                                                                                                                           25
Technology – Electric

BEVs will become economic for several segments – but
extended ranges (600 km+) will not be viable with BEVs
Electric powertrain operating cost break-even timeline (vs. ICE)

  Vehicle                               Viable                                                                                           Break-
 segment            Range             powertrains                              Evolution of TCO leader                                    even

                                                      –   +
                                                                     2020                        2025                        2030
                    Low     150 km                   H2   O2
                                                                                                                                              2019
                                                     –    +

   A/B               Mid    300 km                   H2   O2                                                                                  2027
  Budget
     70 kW          Long    600 km                                                                                                            2040                        There is no fixed point in
                                                      –   +
                                                                                                                                                                          time when battery
                     Mid    300 km                   H2   O2

                                                                                                                                    –    +
                                                                                                                                              2024
                                                                                                                                                                          electric vehicles offer an
                                                     –    +

    C/D             Long    600 km                   H2   O2
                                                                                                                                    H2   O2   2035
                                                                                                                                                                          operating cost advantage
  Volume                                                                                                                            –    +

    100 kW        Extra-long 800 km                                                                                                 H2   O2   2038                        over internal
                                                      –   +
                                                                                                                                                                          combustion engines – it
                     Mid    300 km                   H2   O2
                                                                                                                                              2018
                                                     –    +
                                                                                                                                                                          depends on factors such
    E/F             Long    600 km                                                                                                            2024
                                                                                                                                                                          as the vehicle segment
                                                     H2   O2

 Premium                                             –    +                                                         –   +           –    +

                  Extra-long 800 km                                                                                                           2028
    250 kW                                           H2   O2                                                       H2   O2          H2   O2

                                                                                                                                                                          and range"

                                      Main assumptions: electricity and fuel prices as for Germany 2020; H2 price 5€/kg; PHEV driving modes 40% EV mode/60% ICE mode; FCEV driving modes 40% EV mode/60% FC mode
Strategy& | PwC                       One-time buying incentives not considered                       Source: Strategy&                                                                                            26
Technology – Automated

Hardware, software and infrastructure of automated driving
are improving, but overall progress slower than expected
Automated driving technology developments
                                                                                                                                                  Current status and limitations
                                                  Emergency
                                                    vehicle                                                                                       • Radar and camera sensors are
                                                  recognition                                                                                       developed with a good cost position
                                                                                                                                                  • Cheap LiDAR systems do not yet
                                                                                                                                                    have the necessary performance
                                   Blind               Surround                                                                                   • New ADAS computers based on low
                                   spot                  view                                                                       Hardware        power tech are under development
                                                                                        Lane assist                                e.g. sensors
                                                                                                                                                  • Different driver assistant systems
                  Rear collision
                  warning                                                                                                                           mandatory beginning 2022 in EU
                                                                                                       Emergency     Collision
                                   Park          Driver              Park     Cross      Topo-         braking       avoidance
                  Environment                                                 traffic    graphy                                                   • Test and validation not yet mature
                  mapping          assist       monitoring           assist                            Environment   Pedestrian
                                                                              alert      detection                                                • Motion prediction still not
                                                                                                       Mapping       detection
                                                                                                                                                    completely solved
                                                                                                                                    Software
                                                                                        Traffic sign                                              • Very large amounts of test data
                                                                                        recognition                                e.g. smart
                                                                                                                                                    complicate traditional analytics
                                                                                                                                   data usage
                                   Rear                Surround
                                   view                  view
                                                                                                                                                 • So far, there are only a few test
                                                                                                                                                   tracks that are fully developed for
                                                                                                                                                   automated driving
                                                                                                                                                 • Expansion of 4G by 2022 for
                                                                                                                                                   motorways in DE as basis for 5G
                                                                                                                                  Infrastructure
                                                                                                                                      e.g. 5G    • For the time being only pseudo 5G
    Ultrasound        Short-/medium-range radar             Camera
                                                                                                                                                   based on 4G (non stand-alone)
    LIDAR             Long-range radar                      Microphone

Strategy& | PwC                    Source: Strategy&                                                                                                                                     27
Technology – Automated

While L3 enables various attractive use cases, user experience
and system complexity breakthrough is happening at L4
Automated driving SAE levels and AD function mapping

                                                                                                                Environment     Fallback for
                                                                                                    Vehicle    monitoring and    dynamic        System
                  SAE level         Narrative definition                                            control    user interface   driving task   capability    Exemplary AD functionalities

                                                                                                                                                             • Universal pilot (full autonomy)
    HIGH                                                         …under all environmental and
                      Full                                                                                                                     All driving   • Interactive pilot driving (control via touch/gesture UI)
                  5   automation
                                                                 road conditions that can be
                                                                 managed by a human driver
                                                                                                                                                modes        • Robo-taxi and automated people-mover (all
                                                                                                                                                               conditions)
                                                                                                                  System
                                    The system performs                                                                           System                     • Urban/rural/highway pilot with multi-lane change
                                                                 …even if a human driver does                                                    Most
                      High          all aspects of                                                                                                           • Robo-taxi and automated people-mover
                  4   automation    dynamic driving
                                    (driving-mode
                                                                 not respond appropriately to a
                                                                 request to intervene
                                                                                                                                                driving
                                                                                                                                                modes
                                                                                                                                                             • Urban last-mile delivery
                                                                                                                                                             • Automated valet parking
                                                                                                               Alternative or
                                    specific)…
                                                                                                    System     conventional                                  • Urban/rural/highway assistant (e.g. hands-off traffic
                                                                 …expecting the human driver                   user interface
                      Conditional                                                                                                                              jam, intersection movement, single lane change)
                  3   automation
                                                                 to respond appropriately to an
                                                                 intervention request
                                                                                                                                                             • Parking chauffeur
                                                                                                                                                             • Assisted fleet operations (on-site, off-highway)

                                                                 …executes both steering and
AUTOMATION                                                                                                                                                   • Adaptive cruise control
                      Partial                                    acceleration/deceleration
                  2   automation
                                    The human driver
                                                                 (driving-mode specific)…
                                                                                                                                                 Some
                                                                                                                                                driving
                                                                                                                                                             • Remote/key parking assistant
                                                                                                                                                             • Lane change assistant
                                                                                                                                                modes
                                    performs remaining                                                            Human           Human
                                    aspects of dynamic
                                    driving, while the                                                                                                       •   Adaptive cruise control
                                                                 …executes either steering or
                      Driver        system…                                                                                                                  •   Driver assisted parking assistant
                  1   assistance
                                                                 acceleration/deceleration
                                                                 (driving-mode specific)
                                                                                                   Human and
                                                                                                    System
                                                                                                               Conventional                                  •
                                                                                                                                                             •
                                                                                                                                                                 Lane keeping assistant (system steers)
                                                                                                                                                                 Blind spot monitoring rear/side (system steers)
                                                                                                               user interface

                                    The human driver performs all aspects of dynamic
                      No                                                                                                                                     • Pre-/forward- collision braking
    LOW           0   automation
                                    driving, potentially “enhanced” by warning or intervention
                                    systems                                                         Human
                                                                                                                                                  n/a
                                                                                                                                                             • Front/rear cross-traffic alert with braking

Strategy& | PwC                       Source: “SAE International Standard J3016”, SAE; Strategy&                                                                                                                          28
Technology – Automated

Commercially viable automated driving applications at L3 and
beyond will start becoming available for specific use cases first
Automated driving timeline of commercial road availability
                                                                                                                                                                                                                                Current developments
People mover               (Sub-)Urban                                                                      30    Restricted
                                                                                                                                                           50       Restricted

                                                                                                                                                                                                                               • ADAS1) technologies require
                                                                                                                    Areas                                             Areas

Pre-defined route(s)
7-12 seats                                                                                                                                                                                                                       higher development cost
Last mile logistics                                                                                                                                                                                                              and efforts than anticipated
Pre-defined route(s)               Urban                                      20     Restricted
                                                                                                            40      Restricted
                                                                                                                      Areas

                                                                                                                                                                                                                               • ADAS sensors still far
                                                                                       Areas

e.g., parcel station
                                                                                                                                                                                                                                 above target cost, due to
Robo-taxi                   (Sub-)Urban                                                                                          60   Restricted
                                                                                                                                        Areas
                                                                                                                                                                                                                                 small production volumes
No defined routes                                                                                                              60     Restricted
                                                                                                                                        Areas
                                                                                                                                                                                                                                 and sensor fusion/
2-6 seats                           Rural
                                                                                                                                                                                                                                 recognition challenges
                                   Urban                    50                                                                                            50    Restricted
                                                                                                                                                                  Areas
                                                                                                                                                                                                                               • Regulation still uncertain
                                                                                                                                                                                                                                 with the UN/ECE technical
Owned vehicle                       Rural                  100                                                                                           100                                                                     framework and national
                                                                                                                                                                Restricted
                                                                                                                                                                  Areas

No defined routes
2-5 seats
                                Highway                    130                      60                        130                                        130
                                                                                                                                                                                 Restricted
                                                                                                                                                                                   Areas
                                                                                                                                                                                                                                 rules not yet fully in place
                                                                                                                                                                                                                               • While first L3 vehicles
                                                                                                                                                                                                                                 expected for 2021/22, first L4
                                                             2021                2023                2025                         2027                         2029                      2031   2033           2035
                                                                                                                                                                                                                                 road applications beyond
Commercial availability (beyond pilot projects)2)
                                                                                                                                                                                                                                 pilot projects expected for
          Level 2+             Level 4      xx   Max. speed
                                                                           Construction
                                                                                                     Closed compounds                              Urban:     Traffic situations with many traffic interactions and low speeds   ~2025
                                                                           area capable
                                                                                                                                                   Sub-Urban: Traffic situations with moderate traffic interactions and moderate speeds
          Level 3              Level 5                                     Automated
                                                 Area restriction                                    Vehicle follows user                          Rural:     Traffic situations with few traffic interactions and higher speeds
                                                                           lane changes

                                          1) ADAS = Advanced Driver Assistance Systems
Strategy& | PwC                           2) Indicating start of availability. Tipping points of significant adoption expected significantly later in certain fields                              Source: Strategy&                                             29
Technology – Smart mobility

Individual mobility splits into four modes of private vs. shared
and active vs. passive driving, each with increasing automation
Private / shared mobility modes with selected automated driving use cases
                                                   PRIVATE 1) Personally-owned vehicle                                                                                    SHARED 2) Collective vehicle or ride
                              AUTONOMATION LEVEL

                                                    L5                                          Universal pilot                                                             L5
                                                                                                                                                                                                                                                    Automated
                                                                                                                                                                                                      Robotaxi
                                                                                                                          Automated                                                                                                                people mover
                                                    L4         Urban/rural/highway pilot                                                                                    L4
                                                                                                                         valet parking
PASSIVE3)
I am a passenger                                                  Urban/rural/highway                                  Parking assistant                                                     Urban/rural/highway
                                                    L3                                                                                                                      L3
                                                               assistant (for private driver)                          (for private driver)                                               assistant (for public driver)

                                                    L0-2                                    Private/family driver                                                           L0-2                                  Taxi, ride hailing/pooling
                              AUTONOMATION LEVEL

                                                    L5                                                                                                                      L5
                                                                                    Interactive pilot driving                                                                                                 Interactive pilot driving
                                                                          (vehicle control via touch/gesture UI “for fun”)                                                                          (vehicle control via touch/gesture UI “for fun”)
                                                    L4                                                                                                                      L4

ACTIVE4)
I am the driver                                                    Urban/rural/highway                                                                                                        Urban/rural/highway                         Assisted fleet operations
                                                    L3                                                         Parking/pick-up assistant                                    L3
                                                                        assistant                                                                                                                  assistant                                           (on operator site)

                                                    L0-2                                            Self drive                                                              L0-2                            Car sharing, rental, subscription
Differentiating AD use case
 Traditional base use case

                                                     1) Includes self-owned, family-owned, credit-financed, long-term leased, personal company car 2) Includes rental, subscription (up to 1 year), ride-hailing, ride-sharing, car sharing, pool car, car club
                                                     3) “Passenger” determines mobility purpose and target, passenger selects means of transport and expected time of arrival, mobility system determines detailed routing and actual time/place of arrival
                                                     4) “Driver” determines mobility purpose and target, driver determines means of transport and plans arrival time, driver determines detailed routing and actual time and place of arrival through User Interface (UI)
Strategy& | PwC                                      Source: PwC AutoFacts®, Strategy&                                                                                                                                                                                      30
Technology – Smart mobility

Seamless smart mobility services require a modular, open
API-based technology architecture and platform approach
Smart mobility technology platform building blocks
Partners & Data Sources                                                            Platform Capabilities

                                                                                                                                                           Current developments
  User devices                                                  User interface                            Customer acquisition
                                                               and experience                                and retention
  Mobility service
                                                             (rider, driver, partner)                        (direct, indirect)                            In contrast to individual mobility, providing
  providers                                                                                                                                                smart mobility requires a modular
                                                                                 Customer operations                                                       technology and system architecture,
  Value-added
  service providers                                                                                                                                        capable of integrating various partners
                          API, Integration, Storage

                                                       Identity and access          Rating and loyalty           Exception handling
                                                                                                                                                           across the ecosystem with focus on

                                                                                                                                      Advanced analytics
  Retailers and
  media                                                                                                                                                    • Flexibility to integrate multiple
                                                           Booking and ticketing                          Billing and payment
                                                                                                                                                             modalities and mobility service providers
  Public transport                                                                                                                                           (with different brands)
  operators                                                Product and quotation management (B2C or B2B or B2A)
                                                                                                                                                           • Cross-platform customer acquisition
                                                      Product configuration      Real-time ride sourcing        (Dynamic) consumer                           and seamless sign-up/-in
  Events & weather
                                                         and calculation              & negotiation                   pricing
  conditions
                                                                                                                                                           • Region-specific/ local mobility product
  Traffic mgmt.                                                       Fleet disposition (own or partner fleets)                                              configuration and partner management,
  systems                                               Demand & supply                 Ride request &              Fleet location                           incl. ride request/ offering brokerage
                                                           prediction                     matching                   and routing
                                                                                                                                                           • Real-time environment / asset
  Infrastructure                                                                                                                                             condition-based routing
                                                                                         Operations
                                                                                                                                                           • Predictive maintenance scheduling
  …                                                     Vehicle condition               Asset lifecycle           Maintenance and
                                                          monitoring                     management              repair management                         • Predictive asset lifecycle management

Strategy& | PwC            Source: Strategy&                                                                                                                                                               31
Digital Auto Report 2020 – Volume 1

                                       Consumer             Technology      Regulation

                                                     Connected
Regulation is aiming to
accelerate the mobility                              Electric
transformation – but
following very different                             Automated
approaches across regions”
                                                     Smart Mobility

Strategy& | PwC   Source: Strategy&                                                  32
Regulation

   Dynamic regulatory discussions shape CASE trends – impacting EV
   penetration and speed of AV testing rollout in particular
   Latest regulatory initiatives and discussions
                                                      USA                                                                                                                                   GLOBAL
AUTOMATED:
  AUTOMATED         Announcement to unify AV policies                                                                                                                              CONNECTED Internationally harmonized and binding UN
                                                                                                                                                                                 Connected:
                                                                                                                                                                                 norms on cybersecurity and software requirements for OEMs
across 38 federal departments enforcing a consistent
                                                                                                                                                                                 (06/2020, UNECE’s World Forum for Harmonization of Vehicle
regulatory approach (01/2020)                                                                                                                                                    Regulation, WP.29)
 AUTOMATED          NHTSA with plan to introduce                                                                                                                                 Automated:
                                                                                                                                                                                  AUTOMATED        First binding global regulation on level 3
upgrades to NCAP, involving new safety technologies                                                                                                                              vehicle automation with focus on advancing safety (UNECE’s
and test procedures (10/2019)                                                                                                                                                    World Forum for Harmonization of Vehicle Regulations)2)
                                                                                                                                                                                Automated:
                                                                                                                                                                                  AUTOMATED          Updated standards for on-road testing of
  ELECTRIC Limited national support (i.e. plans to                                                                                                                              level 3, 4 and 5 prototype ADS promoting a standardized
terminate EV subsidies)                                                                                                                                                         groundwork for AV tech (09/2019)3)

       Heterogeneous regulatory dynamics; focus on                                                                                                                                         Recently introduced regulations at UN level with positive
       commercial dimension, less on sustainability                                                                                                                                        impact on CASE adoption, further steps still required

                                                                                                 EU                               China
Connected:
  CONNECTED New guidelines on the                          ELECTRIC New EU CO2 emission                                            Automated
                                                                                                                                      AUTOMATED        Release of the “Strategies                        Electric:
                                                                                                                                                                                                            ELECTRIC New national guidelines on
processing of personal data (EDPB, 02/2020)             targets, applying as of 01/20201)                                          for Innovation and Development of Intelligent                         safety requirements and standards for EVs
AUTOMATED:
  AUTOMATED          Addition of new advanced                                                                                      Vehicles” with focus on creating an ecosystem                         (coming into force by January 1st 2021)
                                                        Shared:
                                                          SHARED New governmental regulations                                      for AVs in China (02/2020)
test scenarios to rate AEB technology                   promoting shared mobility (e.g. free parking)
(2020 EU NCAP update)                                                                                                                 AUTOMATED
                                                                                                                                   Autonomous:          Plans for new changes
Autonomous:
  AUTOMATED       Updated guidelines to                          EU states with a siloed / bottom-up                               to the NCAP test program with new safety                                        Top-down approach based on long-term
enforce advanced safety features (01/2020)                       approach towards CASE regulation                                  additions (following the Euro model)                                            strategy with positive impact on CASE

                                                                          Positive expert sentiment             Neutral expert sentiment               Negative expert sentiment

                           Note: (1) the regulation targets a 15% reduction for passenger cars from 2025 on and 37.5% reduction from 2030 on. (2) e.g. establishes strict requirements for Automated Lane Keeping Systems. (3) incorporates "lessons-learned
                           based on accumulated field experience in testing prototype ADS-operated vehicles on public roads“. (4) general regulatory sentiment derived from various expert opinions across politics and industry, e.g. automotive associations.
                           AEB = Automated Emergency Braking; AV = Automated vehicle; NCAP = New Car Assessment Program; NHTSA = National Highway Traffic Safety Administration; UNECE = United Nations Economic Commission for Europe
   Strategy& | PwC         Source: Strategy&                                                                                                                                                                                                                      33
Network contacts

        Jörg Krings                            Andreas Gissler                             Jonas Seyfferth                           Hartmut Güthner                             Jörn Neuhausen                              Claus Gruber
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    Automotive Europe                        Digital Transformation                  Connected & Smart Mobility                       Automated Driving                       Alternative Powertrains                    Software Development

                                                                                                                                   Contributors

                                                                                                                                    Dietmar Ahlemann                           Martin Gerhardus                         Sarah Nolte
                                                                                                                                    Felix Andre                                Jonas Heydasch                           Kevin Rothe
  Christoph Stürmer                              Akshay Singh                                Steven Jiang                           Sebastian Böswald                          Andrew Higashi                           Tanjeff Schadt
    christoph.stuermer@                            akshay.singh@                             steven.jiang@
           pwc.com                                    pwc.com                           strategyand.cn.pwc.com                      Thilo Bühnen                               Timo Kronen                              Nicola Schudnagies
         AutoFacts®                               Automotive US                            Automotive China                         Christoph Faller                           Joram Lauterbach                         Felix Starke

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