In 2023, new light vehicle sales are forecast to fall by 7.0% as the global economic slowdown curbs consumer spending on big items such as new cars. Yet the year will continue to be an inflection point for the automotive and mobility industries, shaped by rising sustainability pressures, technological progress and changing consumer preferences. This includes the growing move towards automated vehicles, the rapid transition to sustainable fuels and powertrains, and the opportunities for shared mobility companies to embrace mobility-as-a-service (MaaS).
Self-driving cars: 2023 to be a record year for autonomous vehicles
Despite new light vehicle sales dipping due to slowing economic growth, 2023 will be a record year for semi- and fully autonomous vehicles as technological progress will fuel sophisticated advanced driver assistance systems (ADAS) and self-driving algorithms.
In 2023, SAE (Society of Automotive Engineers) level 3 light vehicle sales are projected to rise by 216% compared to 2022 and will see a number of automotive brands launching highly automated vehicles including Hyundai’s Genesis G90 Sedan and Kia’s EV9 sport utility vehicle (SUV).
2023 will also be a big year for SAE level 4 cars with sales expected to grow 150-fold, largely due to a low base in 2022. Japan has plans to permit a limited number of SAE level 4 cars on its roads from April 2023, opening the door for robotaxis and driverless buses.
However, regulation will remain a bottleneck for autonomous vehicles, with many countries still requiring a driver to remain in control of a vehicle on public roads. This is related to laws and policies that are lacking in cases where automated vehicles contribute to accidents or commit traffic violations.Note: 2023 values are forecasts. SAE levels are defined below:
Level 0 – No Driving Automation: features limited to providing warnings and momentary assistance.
Level 1 – Driver Assistance: provides steering or brake/acceleration support.
Level 2 – Partial Driving Automation: provides steering and braking/acceleration support.
Level 3 – Conditional Driving Automation: the vehicle can drive itself under limited conditions; however, the driver may still need to take over in certain cases. The vehicle operates under limited conditions.
Level 4 – High Driving Automation: the vehicle can drive itself under limited conditions; however, the driver does not need to take over control of the vehicle.
Level 5 – Full Driving Automation: the vehicle can operate autonomously under all conditions.
Clean mobility: Electric vehicles to continue surging amid growing competition from hydrogen
2023 will once again be a record year for electric vehicles (EVs). In 2023, 19% of new passenger car registrations will be electric – battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) – up from 14% in 2022. China will continue to be the largest market for EVs in 2023 with 62% of global registrations, followed by 21% in Europe and 10% in the US.
However, 2023 will also be a big year for hydrogen-powered cars, with some car manufacturers seeing its potential as a promising solution for sustainable mobility. Honda is expected to launch its CR-V fuel cell electric vehicle (FCEV) with a dual fuel system composed of a battery for conventional charging and a fuel cell that can be powered by hydrogen. In addition, BMW, in partnership with Toyota, has plans to launch the hydrogen-powered iX5 for fleet services in 2023.
Despite the promising outlook, hydrogen remains a tricky frontier for mobility and automotive companies mainly due to the high cost of processing the fuel, safety aspects regarding flammability and the lack of hydrogen charging facilities. Thus, the shift to sustainable mobility is still expected to remain largely with EVs in 2023 with hydrogen power being a longer-term solution.
Shared mobility: Market consolidation amid a slowing economy and the shift to MaaS
Shared mobility is forecast to reach gross bookings of USD214 billion (constant 2022 prices), growing by 4.3% compared to the previous year. Yet, amid a slowing global economy, growth will remain low as consumers and businesses cut back on transport spending.
This is expected to challenge unprofitable companies which have banked on venture capital funds to stay afloat. It follows a rocky year in 2022 for shared mobility which saw Volkswagen sell its WeShare car-sharing service to Berlin-based mobility player, Miles, in November 2022, and similarly SHARE NOW, formed by Daimler’s Car2Go and BMW’s DriveNow, being sold to Stellantis in July 2022. 2023 will likely see more market consolidation in the shared mobility industry as venture capital dries up and companies are forced to re-evaluate their business models.
Yet it will be an exciting year for MaaS – all-in-one apps incorporating numerous mobility modes through an integrated booking and payment solution. This comes as governments focus on promoting sustainable travel in cities by reducing private passenger car trips, while shared mobility companies look to reinvent their business models through strategic partnerships for improved profitability. While MaaS remains a major opportunity, it needs to overcome challenges such as data sharing between transport operators and provide more flexible pricing models for users.
For further insight and analysis, please read our report, Digital Payments in Mobility Index 2022: Where to Play Next?