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Tracking the 'New Normal' in Automotive

Tracking the 'New Normal' in Automotive

July 23, 2020

Our New Normal Tracker provides monthly updates on key industry trends.

October edition: gradually rising LV sales come as a surprise, while robo-taxis gain momentum

The post-crisis landscape for the automotive industry has been constantly evolving since our initial publication on the 'new normal' in early May. In this update, we track the course of economic recovery and government policy across the United States, Europe and China, as well key developments within the industry. Furthermore, in parsing out the news from the noise, we identify several emerging trends and core themes of development, which include some of the highlights listed below:

  • The United States and Europe are still 20-30% below previous year LV sales respectively despite positive sales performance in September
  • California Governor Newsom signs executive order to ban gas-powered LV sales by 2035
  • ECB President Lagarde indicates potential for follow-on stimulus as coronavirus cases resurge in Europe
  • Candidate Biden expresses hard-line stance on China trade policy, and is expected to keep America on path of protectionism if elected in November
  • The UK is unable to reach a Brexit deal with the EU before self-imposed October 15 deadline
  • China pledges to achieve net zero emissions by 2060 and criticizes the US's climate policy efforts
  • Social distancing highlights the potential of air mobility, with Uber and GE creating a partnership for aerial ride-sharing and GM expressing interest in the market
  • Robo-taxis gain momentum as Waymo offers AV ride-hailing to the public in Phoenix and Baidu launches a free robo-taxi service in Beijing; additionally, Cruise Automation gets permission to test driverless AVs in San Francisco and Zoox becomes the fourth company to receive a driverless testing permit from the state of California
  • Investor interest in EV startups continues as WM Motor and Northvolt raise $1.5 bn and $600 m respectively and Romeo Systems and ChargePoint plan to go public
  • EV platform consolidation accelerates with GM announcing Ultium family of interchangeable drive units and motors and Geely and Foxconn announcing open EV platforms
  • Several OEMs in China unveil new vehicle models with smart air purification systems

Previous editions

September edition

  • The United States and eurozone saw a second quarter year-over-year GDP contraction of 9.1% and 12.1% respectively while China grew by 3.2%, reversing China's first quarter loses
  • EU and US agree to tariff reductions, while relations tense up between EU member states and China
  • As the light vehicle market in China stabilizes, the United States and Europe continue on a subdued recovery path
  • Although financial pressures accelerated in Q2, OEMs and suppliers largely beat consensus analyst estimates
  • The European EV market heats up as purchase incentives become available in 20 of the 27 EU member states
  • Even with the recent 21% decline, Tesla shares have nearly quadrupled in value this year, making Tesla the worlds most valuable automotive company
  • Investor interest in EV technology drives several startups to go public via SPAC's and IPOs - Fisker, Lordstown, Hyliion, Canoo and Nikola to name a few
  • FCA and PSA consolidate to three EV platforms under the Stellantis brand
  • GM strengthens EV partnership with Honda and takes a 11% stake in new EV startup Nikola
  • Lyft says ride hailing services continue to improve although are down 53% year-over-year in August

July edition

  • China registers a complete rebound of light vehicle sales due to early containment, while Europe and the United States experience milder recoveries
  • Recent epidemiological developments, especially in the United States, cast uncertainty over future recovery prospects
  • The United States and China continue on an apparent path towards protectionism, evidenced by an escalating trade war
  • The debate between progressive and conservative policymakers in Europe continues, as France and Germany boost EV incentives
  • OEMs institute broad cost saving programs in response to significant cash drain
  • Financial advantages allow tech companies to participate more actively in the AV space
  • As expectations for Level 4/5 robo-taxis wane, the crisis highlights the potential for logistics in commercializing AVs
  • The pre-crisis trend of EV platform consolidation accelerates due to new capital constraints
  • Health concerns over shared mobility options draw in first time buyers of personal vehicles

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