As I sit on a delayed train (no German efficiency here to be found!) in Ingolstadt, Germany, I find myself absorbed in the scenery outside. One after another, train cars laden with shiny new Audis roll by – a fresh batch off the production line. This spectacle is a vivid reminder of my location: Germany’s automotive heartland, the economic motor of a proud export nation. The sight transports me back to the International Motor Show (IAA) Mobility event in Munich, which I had the privilege of attending last week.
The IAA was a platform where sustainability emerged as the central theme. Having been familiar with the innovation space, I’ve noticed the topic of electrification evolve over the last decade. It was once considered a pioneering concept, a product for early adopters who’s anxieties spiraled left, right, center. However, the IAA, along with other events like ‘Die Flotte’ which I attended earlier this year in Düsseldorf, confirmed that the subject of electrification has now permeated mainstream markets thick and fast.
The expanding lineup of new Chinese Original Equipment Manufacturers (OEMs) entering the European market is a testament to the growing demand for affordable Electric Vehicles (EVs). The European incumbent OEMs are currently more focused on luxury EVs due to higher margins, resulting in a dearth of smaller EVs priced under 25,000 EUR.
However, the question remains: How much will an expensive electric SUV or similar contribute to combating climate change and achieving decarbonisation? I recall a comment that resonated with me, “It feels like China is launching another OEM every month in Germany.” This trend, coupled with lower prices for unknown brands, aids in initial market penetration. But will this lead to a repetition of past market trends, like cheap steel and solar panels flooding the EU market, resulting in a wave of insolvencies?
Considering Ursula von der Leyen’s recent speech, the EU appears apprehensive about this possibility and seems geared towards a defensive stance. However, can we rely on protective tariffs to safeguard the European industry?
This situation calls for local production and OEMs to respond to the market demand for more sustainable and affordable mobility solutions. This includes competing against Chinese OEMs producing their vehicles outside key markets such as Europe with smaller, cheaper vehicles such as new launches like Akinsi and fostering the valuable and strategic industry of local battery production within the EU such as Anodox and pushing innovation from more sustainable cell chemistries to unlocking circular markets for used batteries enabled through such innovators such as Circunomics.
However, the IAA event revealed that the future is not solely about EVs. The term ‘mobility’ is slowly transcending its traditional association with the automotive sector. The IAA showcased a shift towards sustainable mobility, albeit leaving more questions than answers. Despite the presence of naysayers, some key topics made significant rounds across the IAA:
The term ‘Multimode’, a subject of innovation discussions I had already in the UK back in 2019, has now entered mainstream discourse. The increasing diversity in first and last-mile requirements of B2B and B2C customers necessitate different mobility service providers to collaborate closely!
Such collaboration is a boon for introducing new business models to the market. Startups like NAVIT, led by Rene Braun, offer a travel budget concept to corporates, encompassing all modes of transport. Such concepts are gaining traction and are well-received by employees, negating the need for a company car more and more. Options range from train journeys to cargo bike subscriptions for summer pick-ups, all contributing to a sustainable future and also decongesting our jam packed cities.
Speaking of innovative solutions, cargo bikes are emerging as a significant player in the mobility landscape. Rather than being tied to electric cars, cargo bikes provide an even more sustainable solution, ideal for short trips such as school runs or grocery shopping, particularly within rapidly expanding ultra-low emission zones in inner cities. They can even replace commercial fleets, offering a far more decarbonised alternative to both conventional vehicles and EVs.
But, of course, cargo bikes are not without their challenges. Factors such as adverse weather conditions and limited load capacity can deter potential users. However, the advent of 4-wheeler E-bikes offers a robust solution to these issues.
NovAzure’s investment into the start-up CityQ exemplifies this shift. CityQ has developed a vehicle platform designed for cargo, utility, and personal transport. Certified as an E-bike, it does not require a driver’s license and, powered by two batteries, it offers a range of up to 140 km, carrying a load of 280 kg or two additional passengers. This vehicle can save up to 90% of CO2 emissions compared to an EV and doesn’t require a costly EV charging infrastructure, as you can charge the removable batteries at home or swap them at suitable swapping stations.
The IAA Mobility event in Munich was a platform to showcase the CityQ. Myself presenting the CityQ pitch in front of Munich’s City Hall was a memorable highlight of the event.
The acceleration of decarbonisation topics and the increasing number of sustainable mobility solutions still has a very long way to go in achieving global green targets. The German minister for economy Robert Habeck held a great dialogue with his audience to that regard, explaining his constant challenge to find suitable compromises across the German automotive industry.
Having seen old friends such as RETHINK VENTURES and having engaged as venture partner of the MOBILITY FUND to engage with new innovators of the mobility industry such as Deep Scenario has been a rewarding and encouraging moment for me personally.
It feels that increasingly more parties are walking the net zero path and providing direct or indirect solutions. Surely things are still far from perfect to meet green targets across the globe, but the acceleration of the decarbonisation topics are undeniable! More please, faster please!
In conclusion, if you are interested in collaborating on further decarbonising mobility, or discussing innovative ways to reduce the carbon footprint of your fleets, we encourage you to get in touch. The journey towards sustainable mobility is a collective effort, and every step brings us closer to our green goals.