16 Nov 2020
16 Nov 2020
For Marketing Purposes
FOR QUALIFIED INVESTORS ONLY– This document is reserved and must be given in Switzerland exclusively to Qualified Investors as defined by the Swiss Collective Investment Scheme Act of 23 June 2006 (as amended from time to time, CISA).
As part of our guest blog series on thematic investing, MSCI and Lukas Neckermann share their views on the future of transport. In their latest insight, they highlight the hub of innovation emanating from Asia. Countries like China, Singapore, Japan and more are building dominant positions in the electrification and automation of the mobility value chain, putting increasing pressure on Western companies.
In our earlier Thematic Insights, we highlighted some of the leading examples of innovation and growth linked to the Future Mobility value-chain in Asia.1 Investors in the electrification and automation of transportation and the new business models of mobility have been keenly aware of Asian businesses and their role in the potential future ecosystem. Western companies have been under pressure to be agile in adapting their own businesses to succeed in Asia, or else risk losing relevance – even in their home markets.
For example, China has arrived at a clear global leadership position in electric vehicle technology and manufacturing – one that it is now leveraging worldwide.2 It has placed “New Energy” vehicles among its top national priority topics and has supported this with a quota-like system. China has also sought a key role in the core underpinning of connected and autonomous vehicles: 5G systems and data infrastructure. As we will describe, Singapore and Japan have also taken strong positions in the race toward autonomous technology, while Indonesia, Malaysia, Singapore, India and China have seen leading innovations in mobility operations.
In 2009, China implemented a “New Energy Vehicle” (NEV) mandate with the aim to develop a leading position in the (then) nascent low carbon vehicle market while simultaneously addressing air pollution and emissions issues. The plan was reinforced in 2016 with a key demand-generating incentive that replaced previous direct-subsidies. NEVs were made exempt from a 10% vehicle purchase tax. To further spur supply growth, China has yearly-increasing production mandates for car manufacturers, building on previous targets: 14% of production should be NEV in 2021, 16% in 2022, and 18% in 2023.3
MSCI would like to thank Lukas Neckermann, Managing Director of Neckermann Strategic Advisors, for useful discussions and insightful analysis of this megatrend which have greatly facilitated the preparation of this article.
Lukas Neckermann is the author of three books: “The Mobility Revolution” (2015), “Corporate Mobility Breakthrough 2020” (2017) and “Smart Cities, Smart Mobility: Transforming the Way We Live and Work” (2018). His most recent study, "Being Driven" has just been released as an eBook.
Watch Lukas’ video on Future Mobility
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1 We described the case for the global transition to a new mobility ecosystem in “Future Mobility: Understanding a new transport ecosystem“, MSCI , June 2020 and the potential impact of the COVID-19 pandemic on such trends in “Post-Pandemic Reflections: Future Mobility; COVID-19’s potential impact on the new mobility ecosystem”
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