Akio Toyoda said in a public statement, "However, a carmaker is all that I am. And I see that as my own limit. The new team under upcoming President Sato has a mission to transform Toyota into a mobility company." These words have revealed not only the mindset required for a carmaker to transform in the face of digitalization, electrification, and interconnectivity, but also the direction for Toyota, the global auto leader, to develop in the future.
As early as on International Mother Earth Day, April 22, 2016, 171 countries around the world signed the Paris Agreement on Climate Change. Since then, carbon neutrality has been a challenge of great urgency the auto industry must tackle. When taking over the reins of BMW in 2015, CEO Harald Krueger had to deal with the impact of the dieselgate scandal in Germany as well as the rapid rise of Tesla in EVs. Krueger said at the debut of the BMW Vision Next 100 concept, celebrating BMW's centennial anniversary, in Beijing, China in early May 2016, "The best way to predict the future is to shape it." Although BMW later launched the i3 and the i8, the pace of electrification was not fast enough. The lagging was so marked that Krueger failed to win the support of the board of directors and stepped down as a dejected CEO when his term of office expired in April 2020. A comparable incident occurred in late July 2022. Volkswagen, another German auto giant, announced without warning, just when the company harbored an ambition to transform itself into an EV manufacturer, that its four-year CEO Herbert Diess would step down on September 1 of that year to be succeeded by Oliver Blume, the CEO of Porsche, the Group's sports car brand that had been more successful in driving electrification.
The CEOs of these traditional carmakers were replaced not because of major operational problems, but because of the slow pace of vehicle electrification. It is crystal clear that carmakers are well aware of the future auto landscape. While the auto market has been stagnant or even declining as a result of the rife COVID-19 pandemic in recent years, global EV sales have grown by more than 50% almost on a yearly basis, from 800,000 units in 2017 all the way to 7.8 million units in 2022. Judging from the continued growth, there is no doubt EV sales will exceed 10 million units in 2023. If traditional carmakers remain locked in the world of gasoline cars, or cling to the idea that gasoline cars are the very best choice for consumers, chances are they will be eliminated from the market in the foreseeable future.
I was not being a scaremonger making the above comments. In the prevailing, irreversible trend toward net zero, traditional carmakers in Europe, the US, and Japan must shift to EVs decisively and swiftly, or they will lose out to EV startups in the flourishing EV market, and one grimmer fact is that they will be forgotten by ruthless consumers. Let's just look at a simple example. With digital cameras getting more popular and camera phones getting more advanced, how many consumers would remember Kodak, Fujifilm, or Konica? And that was a recent reality no more than 20 years ago!
Not to mention that net zero via vehicle electrification will not be the only challenge to the auto industry. Subsequent challenges will include Internet service business opportunities accompanying 5G/6G and LEO satellite communications, business opportunities following the era of driving autonomy propelled by the high-speed development of GPU/AI chips to set drivers free, and potential business opportunities coming from car energy storage and car sharing. Plus, after the digitization of cars, the color of the body, lighting, and wheels will all be individual mobile showrooms. These are the changes that will come along with the wave of technological progress. If the leaders of carmakers continue to believe they only need to focus on making cars, without giving any thought to transforming, then the final outcome is actually self-evident.
In fact, we have noticed in recent years that for exhibition venues, carmakers no longer concentrate efforts on traditional physical car shows, but rather, on the Consumer Electronics Show (CES) held in Las Vegas, USA at the beginning of each year to present their latest creations as well as innovative auto equipment ideas and applications. At this year's CES, for example, the Stellantis Group unveiled the Ram 1500 Revolution Concept, an electric pickup, and Chrysler showed off its new state-of-the-art cockpit, removing the steering wheel from the driver's seat while using more of the group's STLA software services, operating systems, driver assistance systems, and infotainment systems, with Level 3 autonomous driving features. BMW unveiled the i Vision Dee concept, which allows owners to not only talk to the car but also change the color of the car as they wish. Volkswagen launched the ID.7 saloon, equipped with digital camouflage and a total of 22 individually controllable areas where lighting can change with the rhythm of music for various effects. Mercedes-Benz presented the electric concept Vision EQXX and its plans for the expansion of charging stations worldwide. Hyundai Mobis of Korea presented two new concepts, the M.Vision TO and the M.Vision HI, as well as future solutions including radiator grille LED lighting, augmented reality HUD (head-up-display), futuristic driving experience, and so on. Autel Energy and Zero Labs Automotive showcased the conversion of a 1969 Ford Bronco into an electric truck. SHM, a joint venture between Sony and Honda, announced its new EV brand AFEELA. The MIH Consortium of Taiwan's Hon Hai exhibited EV products from partners such as Lordstown Motors, INDI EV, and Monarch Tractor, and showcased a broad range of applications for commercial fleets, entertainment and games, and agricultural innovations. Vinfast, an up-and-coming Vietnamese EV brand, not only showcased four electric SUVs — VF6, VF7, VF8 and VF9 — but also launched four concept e-bikes to boost its market share. I won't be going into carmakers that merely introduced new features, such as Volvo and GM. The foregoing descriptions show us the inevitable transformation of the auto industry.
I'd like to conclude by quoting Akio Toyoda's closing remarks when he resigned as Toyota President, "I expect this new team to go beyond the limits that I can't break through. I believe in the future that the next generation will create. I invite you to look forward to the future of Toyota." His words are of undeniable verity. Only the new-gen innovative line of thought has the power to break free from the fetters imposed by the past auto industry, and only accelerating to net zero manufacturing and transforming mobile services can build a new auto industry that better meets the needs of consumers in the future.
About the author - Kenny Liu
Graduated from Dept. of Aeronautics and Astronautics, Cheng Kung University in 1988, started his auto industry career since July 1990 after two year military service. Starting as a service engineer and a temp technician, product marketing specialist in Peugeot/ Daihatsu, marketing and dealer channel specialist in VW LCV from March 1992, then field manager in GM Taiwan from Feb. 1994, sales and service / parts head in Ford Lio-Ho from Sep. 1998 till retirement in May 2019. Kenny then started to work for JLR Taiwan as sales/service head and consultant/ lecturer. After that, he was invited to work at a Suzuki dealer of Taipei as the general manager until April 2022.