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An Analysis of the Small Urban Vehicles Market: How Long Until they Conquer Our City Streets?

Small urban vehicles October 12, 2021
An Analysis of the Small Urban Vehicles Market: How Long Until they Conquer Our City Streets?
• Growing government efforts to introduce compact cars, the requirement to decrease vehicle weight, and launch zero-emission automobiles are driving the market expansion.

• OEMs are focusing on creating battery-powered lightweight quadricycles that can give solid performance and save on fuel expenses.

• Top automakers are designing and producing electric and hybrid lightweight vehicles to improve urban transportation. Also, demand for ride-sharing services is also on the rise.

• Leading automotive companies are majorly developing self-driving or autonomous vehicles to improve rider safety.

Download the full report to identify and micro-target high-ticket outsourcing opportunities in Small Urban Vehicles Market and access detailed insights on emerging trends, challenges and more.

Would the future of mobility and transportation be hyperloops or autonomous vehicles?

Before the sleek and powerful Tesla roadster upended the idea of what electric vehicles must be, EVs were dismissed as slow and tiny electric golf carts. But this notion is coming full circle in some regions.

In China, a 10-foot long Wuling Hongguang Mini – made by state-owned SAIC Motor in a joint venture with fellow Chinese carmaker Guangxi Automobile and US automobile giant General Motors (GM).

The car marketed as “the people’s commuting tool” sold two times more budget electric cars than Tesla in China in early 2021. By July 2021, the sales number hit 250,000 total vehicles sold.

Preparing for the Tiny Vehicle Takeover

European cities too are eager to support small vehicles. Major European automakers are not yet embracing ultra-cheap EVs, considering the price is likely to be higher due to European environmental and regulatory requirements. Big American OEMs are slower to embrace them.

They do not look mainstream, so their arrival in U.S cities can be tracked in three stages.

Stage 1: Bewilderment – The sight of people on bright colored tiny bikes and scooters, a tech park entitlement, gliding slowly on the street sides and the sidewalks, leaving these by the side when their stop comes may be amusing at first. However, big cities have these new mobility modes taking off, a ‘hunting ground’ for startups.

Stage 2: Realization – The first-time user, out of curiosity, tries a dockless bike or e-scooter and realizes that they are not only a visual counterpoint to the big cars but a delightful and practical alternative. Easy to ride, park, and does not clog the streets.

Stage 3: Mass adoption – Velomobiles, e-bikes, scooters, hoverboards, unicycles, and low-speed cars, could be a big deal if adopted in big cities, thus eroding private cars and ride-hailing. They could help cities achieve the elusive environmental and road safety goals.

Getting to Mass Adoption of Little Vehicles

Mass adoption will require it to be usable for all seasons, all sorts of trips, and all types of people. Solutions exist, with many more to come. Reconditioning ourselves to use these modes of transportation as a default is the bigger challenge.

For many urbanists, this is a dream come true. We have better battery technology that has made these tiny vehicles economical. It could provide the critical mass for the big automobile industry to drive the revolution in America and worldwide.

College and corporate campuses and military bases where shirt trips dominate could look at micromobility solutions. Notably, the majority of public transit trips are short in any city of the world. On average, it is roughly five miles for rail, four miles for bus, and two miles for cars. These journeys are potentially ripe to be fulfilled with micromobility.

Micromobility investor Oliver Bruce estimated that more than 1.4 trillion miles of annual U.S. passenger travel and more than 4 trillion miles globally could be traversed on micromobility solutions, a market potentially worth hundreds of billions of dollars.

Opportunities Abound for Automakers and Service Providers

A few automakers have created subsidiaries in charge of mobility solutions. Automakers have also started investing in, partnering with, or acquiring new service providers. Some vehicle manufacturers have intentions of becoming mobility companies, offering new services alongside the established core business. Some opportunities include:

Electrification – EVs must address battery longevity, charging infrastructure, fleet electrification, and renewable energy-based charging grids for greater adoption.

Autonomous Vehicles & ADAG – Fleets of AVs expand the scope of last-mile deliveries, reduce downtime, and make transportation relatively safer.

Connectivity – The tamper-proof digital identity differentiates from other vehicles in the network. It enables easy tracking of vehicular data for various use cases such as insurance, driver safety, predictive maintenance, and fleet management.

Artificial intelligence – Technologies such as machine learning, deep learning, and computer vision guide self-driving cars, manage fleets, assist drivers in improving safety, and improving vehicle inspection or insurance. In auto manufacturing, it accelerates the production rate and reduces cost.

Additive manufacturing – 3D printing helps in rapid prototyping. 3D printed models accelerate the design and testing phases of production, allow manufacturers to print spare parts to match requirements, and manufacturing with composite materials leads to lighter, stronger, and more durable components.

Big data & analytics – Data analytics informs various decisions throughout the vehicle’s lifecycle. It enables predictive maintenance, fleet information, and alerts concerned authorities in case of accidents. Moreover, customer data finds applications in enhancing product design for newer vehicles, optimizing supply chains, and driving sales.

Other in-demand technologies include blockchain, plant automation, powertrain development, ultra-low emission solutions, cockpit electronics, and more.

Use cases include GM with Faurecia working on the light vehicle exhaust system and Piaggio Group collaborating with KTM, Honda, and Yamaha Motor to form a consortium of swappable batteries for motorcycles and light electric vehicles.

Meanwhile, Honda partnered with Kabuku to design a 3D-printed micro commuter inside the Japanese confectionery maker, Toshimaya’s factory. There are other focused use cases.

Sales intelligence platform, Draup, provides actionable insights to key players in the race to create small urban mobility solutions. Service providers can use strategic insights, including product/service requirements, to generate niche sales proposals to help prospective automobile players fulfill their business intentions.

Draup conducted a comprehensive analysis of the small urban (L6/L7) vehicles market. We identified key market regions, key OEMs, market trends, key R&D centers, key players, and associated workloads.

Download the report to gain a comprehensive view.

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