energy transition and mobility revolution · market intelligence performance improvement industry...

October 3rdMexico City

Energy Transition and Mobility RevolutionEl Sector Transporte a Futuro; Innovación en el Equipamiento y en la

Gestión del Sistema- Seminario WEC

McKinsey & Company 2

Objectives for today's session

Share McKinsey’s Energy Insights´perspective on the outlook of the

intersection between the energy sector

and transportation

This is an independent external view of the

challenges and risks for the future in the

energy sector

This perspective is based on fundamental

economics of energy and agnostic of political

considerations


We recently launched McKinsey Energy Insights in Mexico

McKinsey Energy Insights McKinsey’s Global Energy Practice

1,300+ Energy dedicated Practitioners

5

180+

200+

Hubs in Houston, London, Amsterdam,

Warsaw and Singapore

Dedicated specialists

Clients served

Global Practices: Basic Materials, Oil and Gas, Electricity

Power and Natural Gas, Chemicals and Agriculture4

Other industry practices including Advanced Industries,

Automotive and Assembly, Private Equity, etc.22


McKinsey Energy Insights combines consulting and industry expertise with proprietary models, analytics and benchmarks to improve performance

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Industry experts

Deep, hands-on industry

expertise

Proprietary data and

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using operator-provided data

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Working directly with

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Forecasting & analytics

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Bespoke analysis

Benchmarking & diagnostics

Performance management

Closely linked to McKinsey’s

restructuring practice


We maintain a suite of integrated models across the energy value chain, providing distinct yet fully consistent market perspectives


Our Global Energy Perspective offers a demand outlook across dimensionsIt covers 146 countries, 30 sectors, and 55 energy products

30

SE

CT

OR

S

Key features of our Global Energy Perspective

Granular coverage

Projections to 2050 for 146

countries, 30 sectors, and

55 energy products

Full transparency and

flexibility

Underlying demand drivers

and ability to customize

scenarios

Global reach, local

expertise

Access to McKinsey’s

expertise from across 100+

local offices, 400+ energy

experts globally, and 20+

industry practices

Illustrative level of detail

Road transport

5 vehicle segments

Passenger cars

2- and 3-wheelers

Vans and pickups

Trucks

Buses

3x3 truck use cases

3 weight classes

3 distance classes

(urban, regional, and

long-haul)

7 powertrains

Gasoline

Battery electric

Plug-in hybrid

Hybrid electric

Natural gas

Liquefied petroleum

gas (LPG)

Diesel

5 fuels

Gasoline

Diesel

LPG

Natural gas

Liquefied petroleum

gas (LPG)

Diesel

5 fuels

Gasoline

Diesel

LPG

Natural gas

Electricity

Annual projections

For 146 countries

2016-2050


Global energy systems are changing rapidly in all dimensionsChanges are occurring across sectors, energy products, and geographies

SE

CT

OR

S

Increased renewables and

power system flexibility

Electrification of

transport and heat

Shift to Asia in energy

exports and investments

Review of subsidy

schemes

Implementation of

CO2 pricing

Growing success of

plastics recycling

Improving battery

technology

Growing middle class in

developing economies


Energy Transition


After a century of growth, global primary energy demand plateaus around 2030This is primarily driven by the penetration of renewable energy sources into the energy mix

Global primary energy demand

Million terajoules (TJ)

Source: McKinsey Energy Insights’ Global Energy Perspective, January 2019; IEA Energy Balances (Historical); Smil, V. (Histor ical)


Falling energy intensity offsets the effects of a growing high-income population Despite population growth, energy intensity will decrease across regions given technological improvements

Population Billions

7.8 10.5Total

1.5

1.3

1.2

1.4

1.3

1.1

1.6

0.4

0.4

1.4

Africa

0

India

Other Asia

OECD

China

RoW

3.1

1.7

1.3

1.6

1.4

0.1

0.2

2016 2050

489

India

351

China

219 Other Asia

166 RoW

159 World

(avg.)

146 OECD

143 Africa

100

2010 2020 2030 2040 2050

Other Asia 4

World (avg.) 5

OECD 3

Africa 10

India 10

China 9

RoW 8

7

6

3333

2

2010 2020 2030 2040 2050

GDP per capita2016=100, real value

Energy intensity (TFC/GDP) Megajoule per US dollar, real value (MJ/USD2010)

Source: McKinsey Energy Insights’ Global Energy Perspective, January 2019; McKinsey Global Institute Global Growth Model, Global

Deceleration Scenario; UN Population Division, Medium scenario


Energy intensity falls, driven by growing service industry and end-use efficiencyThe decline in energy intensity1 is partially driven by the shift to a service economy

GDP increasingly comes from service sectors, which are

typically less energy intensive

Increasing energy efficiency across sectors reduces energy

needs in end use sectors

Share of services sector in GDP, %

63 6660

40 46 54

52 6135

76 78 80

1995 203515

China

India

United States

Mexico

Energy efficiency indices of selected segments, 2016=100

110

105

100

95

90

85

80

75

70

65

60

55

50

Buildings Residential

(GJ/capita)

Industry Iron and

steel (GJ/t steel)

Transport

Cars (MJ/km)

20 25 30 35 40 45 20502015

1. How much energy we use for every dollar we spend

Source: McKinsey Energy Insights’ Global Energy Perspective, January 2019


Energy demand development reflects local dynamics While most OECD countries see a decline, demand in Africa and India roughly doubles until 2050

Primary energy demand by region, 2016-50Million TJ

CAGR >2% 1-2% 0-1% <0% 2016 2030 2050

OECD Europe

Rest of World

OECD Americas

113 11367

77 71 60

71 81 88

Other Asia

China

OECD Asia Pacific

44 59 75

126 140 123

36 36 30

Middle EastAfrica India

34 46 6533 38 40 36 53 73



In the following sections, we discuss main developments for each of the fuels

2050

700

650

600

550

500

450

400

350

300

250

200

150

100

50

02016 2020 2025 2030 2035 2040 2045

Gas

Oil

Coal

Renewables and other fuels1 25%

23%

32%

20%

34%

22%

29%

14%

Primary energy demand per fuelMillion TJ

1. Includes biomass, hydro, and nuclear

Share in 2035%

Share in 2050%



Electricity consumption doubles until 2050, while renewables are projected to make up over 50% of generation by 2035


Electrification drives a doubling of electricity demand by 2050Key electrification end-uses, particularly in buildings and road transport, drive this trend

Road transport

2016=100

Buildings

Industry

Share of electricity in final energy consumption %

19%

Final energy consumption Electrification1

% of final energy consumptionCAGR %

23% 29%

27

2016 2050

<1

3145

2016 2050

2125

2016 2050

2623 35172014 20 29 32 38 41 44 47 2050

100

149

100

116112

203

Electricity

Other fuels

2.1%

.03%

1. Buildings includes residential buildings in OECD Europe and OECD Americas; transport includes passenger cars, trucks, vans, buses, and 2- and 3-wheelers


2.1%


EU TCO for medium-duty truck, regional

application

Electrification of road transport helps double electricity demand by 2050Across transportation segments, EV will become the lower cost option

Timing of cost-parity of electric vehicles with fuel vehicles,

based on TCO in the EU

LDT

A/B

MDT

C/D

HDT

E/F

Classes1

Long-haul

truck

Regional truck

Urban truck

City buses

Passenger

cars

Segments 2018 2020 2025 Cost per kilometer normalized to 2016 ICE, %

140

135

130

125

120

115

110

105

100

95

90

0

TCO

parity in

~2023

Increase due to oil

prices, then decrease

due to fuel efficiency

when oil prices

stabilize

2016 18 20 22 24 26 28 2030

ICE BEV

1. Class definitions in EU is defined in weight for trucks (Heavy duty transport (HDT) >16t, Medium duty transport (MDT): 7.5-16t, Light duty transport

(LDT): 3.5-7.5t) and in size/ICE price for passenger cars: (A/B < 4 m and below 20k CHF, C/D:4-5 m, 28-55k CHF, E/F > 4.5 m, >50k CHF


2030


With accelerated transition, electricity demand growth increases an extra ~14%In this scenario governments push further electrification to reduce CO2 emissions, despite higher costs

1. Only in OECD Americas and OECD Europe

2. Including food and tobacco, manufacturing, other materials

Global electricity demandThousand TWh

Residential heat pump adoption

% OECD households with heat pumps1

EV commercial vehicle penetration

EVs as % of global new truck sales

EV passenger car penetration

EVs as % of global new passenger car sales

Electrification of industrial heat

% OECD Europe low and medium temp. heat

electrified in selected sectors2

50

45

40

35

30

25

20

CAGR

CAGR

Buildings

Road

transport

Industry

+14% 2.5%

2.1%

2016 2030 2050

2

10

20

24

302050

2035

2018

34

50

1

78

77 42050

2035

2018

81

26

73

23

7

>1

2050

2018

2035 49

80

30

55

55

90

2018

2035

2050

0

85

145

+

All disruptions

Reference Case Additional in acc.case

Reference Case



Electricity generation: wind and solar are >50% of recent capacity additionsBetween 2015 and 2017, most of net capacity additions has come from intermittent renewables

1 Other includes bioenergy, geothermal, and marine

Net capacity additions%, 100% = yearly average in that period

10%6% 4% 7%

13%

55%68%

46%

30%14%

6%

6%

23% 14%

26%

23%

12%

6%

5%

4%

6%

15%

15%

16%

19%

35%

3%

3%

1%

103GW

2005-20091995-1999 2010-20142000-2004 2015-2017

100% = 118GW58GW 113GW 161GW

Solar

Wind

NuclearOther1

Hydro Gas

Coal


Renewables will be cheaper than existing coal & gas in most regions before 2030The majority of countries will reach this tipping point in the next 5 years

1 Power generation from existing coal and gas power plants in 2018, as share of total

Tipping points When new renewables become cheaper than existingCountry Coal and gas generation1, %

72

55

Vietnam

US California

India

China (North)

US Northwest

Germany

China (South)

Mexico

Spain

Australia

Egypt

Saudi Arabia

49

40

46

51

36

85

76

61

78

72

Coal GasWind onshoreSolar PV

2020 2025 2030 2035 2040

A tipping point

represents a

year when new

renewables

(solar PV,

onshore wind,

or both)

become

cheaper than

existing fossil

fuel plants



Gas continues to grow its share of global energy demand—the only fossil fuel to do so – then plateaus after 2035


Gas is the only fossil fuel that grows its share of energy demand until 2035This growth happens at declining rates and then plateaus

Natural gas demand by segment1

BCM

2016-35

CAGR %

1995-16

CAGR %

16.3%

2.6%

1.3%

2.0%

3.2%

4.4%

0.7%

0.7%

1.9%

0.3%

2016 Total peak

demand

(2035)

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

2.7 2.21.3

0.6

2035-20501995-2005 2016-20252005-2016 2025-2035

-0.2%

1 Transport segment in many other reports also includes gas use for pipeline transport. This is included in oil and gas industry’s own use above

(73 bcm in 2016)

21.9% 23.2%20.4% 22.5%19.3% 22.2%

Share of total primary

demand %

CAGR

%


Industry PowerBuildingsO&G industry own useTransport


Oil demand growth slows down substantially, resulting in a peak in the early 2030s but still significant investment will be required


Oil demand growth is projected to slow, peaking in the 2030s at 108 MMb/dPeak oil demand for road transport happens in 2025, driven by increase adoption of EVs

%

Global oil demand by sector, MMb/d

1990 2000 2010 2020 2030 2040 2050

Road

transport

peak oil

demand

(2025)

Total peak oil

demand

(2033)

70

80

90

105108 106

100100

Power Other Chemicals Other industry Other transport Road transportBuildings



Net change

relative to 2018

The chemicals sector accounts for most oil demand growth in the next 15 yearsThe strongest declines in demand happen in power and road transport

Oil demand 2018-2035 increase by sector, MMb/d

+46% +46% +23% +1% +9%-2% -72%

6.6

3.1

2.90.2 1.0

3.3

2018 PowerChemicals Road transport

108.3

Aviation Other industry Other 2035

99.8



Natural gas

Oil

Coal

More efficiency gains,

recycling, and low-

emission feedstock in

iron and steel

More electrification

of EU industry low

& medium temp-

erature heat

3 Accelerated

electrification of

residential heat

More rapid

electrification of

cooking in non-

OECD countries

Increased demand

reduction and

recycling of plastics

4 5 6 7

Efficiency gains

and faster uptake

of low-emission

fuels for aviation

and marine

2 Accelerated cost

reductions for

renewables and

storage

81 Faster uptake of

electric vehicles

Our recently published Accelerated Transition report reviews the impact of eight shifts that would accelerate the energy transition

Source: McKinsey Energy Insights’ Global Energy Perspective November 2018


In the case of an accelerated transition, oil demand could peak before 2025 Assuming governments push for decarbonization, we could reach roughly half of today’s level by 2050

Plastics recycling

% polyethylene from recycled feedstock

Heatandcookingelectrification; industry electrification; and other transport and other

energy sectors

EV commercial vehicle penetration

EVs as % of global new truck car sales

Alternative fuels uptake

% biofuels, natural gas, and electricity in the fuel mix

EV passenger car penetration

EVs as % of global new passenger car sales

133

446

20182035

7778

2050 81

Alternative fuels uptake

% biofuels, natural gas, and electricity in the fuel mix

42035 132018

2010

2423

2050 44

720352018

222673

<1

205049

80

Road

transport

Chemicals

Other

+

+

110

105

100

95

90

85

80

75

70

65

60

55

50

45

40

35

30

25

20

15

10

5

0

2050

-4

Aviation

Marine

Global liquids demand, MMb/d

2030202016

MMb/d

-14

MMb/d

-7

MMb/d

-20

MMb/d

CAGR


Reference Case

Additional in acc. Case

31502050

2018 02035

30

20182035 27 14

372050

042

68


Policy targets and projected EV sales per scenario1

Non-ICE sales as % of total new car sales

Publicly announced targets of OEMs

Millions of passenger cars

Publicly committed EV production capacity in 2020 already surpasses the projected EV demand in the accelerated scenario

Source: IEA EV outlook (2017,2018); McKinsey Energy Insights, ICCT; European Parliament Legislative Observatory; Press search

1 Chinese target of 2 million EVs corresponds to ~8% market share. European Union is putting a 20% EV target into place for 2025. Germany and UK consider or have a total ICE sales ban

by 2030 and 2040 2. Not exhaustive: based on OEMs that make up ~30% of today’s car market. No ramp-up assumed for Tesla and VW in ’19 and ’20. 3. Not exhaustive; based on OEMs

that make up ~60% of today’s car market. Nissan-Renault-Mitsubishi (2022) BAIC, Volkswagen, BMW (additional in 2025), Toyota, General Motors and Mercedes (2025).

2025

2020

2040

2030

Policy target Ref case Acc case

0.6

2018

20.9

20202 20253

10.9

16.4

4.2

3.9

Acc. case0

Ref. case0

Other Chines OEMs

BYD

BAIC

Geely

Volkswagen

Tesla

BMW

Nissan – Renault - Mitsubishi

Toyota

General Motors

Mercedes

26.7


Global uptake of EVs will trigger a decline in oil demand for road transportGlobal annual EV sales are expected to exceed 100 million by 2035

1. EV = BEV + PHEV

Uptake by segment for EV1, % of global vehicle sales

# EV sold 2018 2035 2050

0.1M

~0M 0.2M

1.5M

20M

3M

2M

10M

60M

40M

4M

9M

20M

100M

70M

90

80

70

60

50

40

30

20

10

0

2,500 4,000 4,500

Global parc vehicles, all segments Millions

Global parc by segment for EV1, Millions

2018 20 25 30 35 40 45 2050 251430

810

3

270

900

5

190

50

75

15

25

1

2018 35 2050

255

770

2,000

+7% p.a.



Global carbon emissions peak in 2024 and fall by ~20% by 2050The decrease is driven by a relatively rapid phase-put of coal

Natural gas Oil CoalGlobal energy-related CO2 emissions per fuel, GtCO2 p.a.

35

30

25

20

15

10

5

02050

-22%

Peak in 2024

2-degree pathway1

1.5-degree pathway1

2016 2020 2025 2030 20402035 2045

1. Median of all Intergovernmental Panel on Climate Change (IPCC) scenarios that lead to 1.5 or 2 degree warming or less

Source: McKinsey Energy Insights’ Global Energy Perspective, January 2019; IEA; IPCC/IAMC 2-degree and 1.5 degree scenarios


What would need to happen for emissions to decrease to a 1.5-degree scenario?Substantial changes are needed across the entire energy system

Global energy-related CO2 emissions per sector, GtCO2 p.a.

Industry Buildings Other sector

Reference scenario 1.5-degree scenario

Power

30

25

20

15

10

5

0

-66%

2016 2020 2025 2030 2035 2040 2045 2050

1.CCS = Carbon Capture and Storage

2. Steam methane reforming

By 2050 the following would need to happen:

Power: 90% of coal and 80% of gas-fired

generation phased out or combined with CCS1; all

additional power demand generated fossil free

Hydrogen: Grid-powered electrolysis and

SMR1+CSS for hydrogen production becomes cost

competitive to decarbonize hard-to-abate sectors

Road transport: All vehicles EV or on green

hydrogen

Marine: 80% of marine sector electric or on zero-

carbon fuels

Aviation: 60% of flights electric or zero-carbon

fuels

Buildings: 100% of gas- and oil-powered heating

to move to a zero-carbon alternatives

All industries: Gas- and coal-fired heat to be

fossil-free (electric/green): 100% of low and mid

temperature, 50-70% of high, and 50% of heat in

cement production. Historical rates of efficiency

improvement are maintained

Transport

Source: McKinsey Energy Insights’ Global Energy Perspective, January 2019; IEA; IPCC/IAMC 2-degree and 1.5 degree scenarios


Mexico’s oil demand is expected to remain almost flat in the future Oil demand for power will disappear and the uptake of EV will make fuels such as gasoline and diesel peak by 2032

1.4%

-0.3%

0.2%

1.2%

-0.2%

-20.7%

Oil and liquids demand – Mexico’s Reference Case, thousand bpd 2016-50 CAGR, %

600

1,200

0

400

200

800

1,000

1,400

1,600

1,800

2,000

2,200

1980 2000 2015 2030 2050

2.0% p.a.

-0.6% p.a. 0.5% p.a.-0.2% p.a.

Refining1 Other transport2 BuildingsPower Industry Road Transport

1st Peak oil demand (2007)

Peak road transport (2032)

2nd Peak oil demand (2038)

1. Also includes other transformation processes (~10% of total)

2. Other transport includes aviation, marine and rail

Source: McKinsey Energy Insights, Global Energy Perspective


This trend will materialize as we reach cost-parity for EVs in the next decadeGasoline and diesel demand in Mexico will peak as electric vehicles become an attractive option in the market

Segments 2018 2020 2030 Post 2030

Small cars

(A / B)4

Medium cars (C / D)5

Luxury cars

(E / F)6

SUVs

(J)7

Cost-parity timing of electric vehicles with fuelvehicles, based on TCO in Mexico11 BEV1 PHEV2

Passenger

cars

Trucks3

2022 2024 2026 2028

Small trucks

(LDT)8

Medium trucks

(MDT)9

Big trucks

(HDT)10

1. Battery Electric Vehicles, only function with electricity; 2. Plug-in Hybrid Electric Vehicle, battery can be recharged but also works with

gasoline; 3. Parity reached for regional hub & spoke distribution (~200km/day); 4. A/B – Smallest cars, usually with an approx. Length of 4

meters; 5. C/D – Medium size cars, also called large family car; 6. E/F – Full-size luxury sedans and the range is limited to just a few models;

7. J – Covers a broad category of vehicles, ranging from SUVs to crossovers; 8. LDT – Light duty transport: 3.5-7.5 tons; 9. MDT – Medium duty

transport: 7.5-16 tons; 10. HDT – Heavy duty transport >16 tons; 11. Considers import tax/duties for imported vehicles



EVs cost-parity will drive exponential growth of EVs after 2030Electric vehicles could represent ~60% of the new car sales by 2050

0.3

402520

0

6.4

2018

1.2

30

3.5

35

2.3

1.2

10.2

45

14.8

2050

0

7.2

0.3

2

3.9

11.8

17.6

# of EV sold

by 2018

162 K

- K

- K

- K

12 K

Total 12 K

# of EV sold

by 2035

56 K

199 K

53 K

7 K

3,543 K

Total ~4,261 K

# of EV sold

by 2050

252 K

2,322 K

211 K

34 K

14,753 K

Total ~23,043 K

EV parc by segment by 20501,2, million vehicles Buses 2&3 wheelers Trucks Vans & Pick-ups Passenger cars

% of EVs1 of the

Mexican vehicle parc

% of EVs1 of the total

sales

0%

0%

0%

0%

1%

5%

3%

12%

7%

26%

12%

36%

18%

44%

26%

59%

1. EV = BEV + PHEV + HEV

2. Number might not add up due to rounding



Mobility Revolution


Four mobility technology driven trends – the ACES – will continue to disrupt mobility in cities

Connectivity

and Digiti-

zation

Electrifi-

cation

Shared /

diverse

mobility

Autonomous

driving

From… …To

1% of vehicles

sold have xEV

powertrains

20-40% of new

vehicle sales in

urban areas

forecasted in 2030

to have xEV

powertrains

12% of cars

equipped with

embedded

connectivity

80% of cars

equipped with

embedded

connectivity

From… …To

From… …To

<1% of

passenger miles

travelled currently

carried out

using shared

mobility

Cheaper to use

Shared AVs than

own a car for

90% of

population by

2030

~1% vehicles sold

in 2016 equipped

with basic partial-

autonomous

driving

~6% of

passenger miles

taken in robo-

taxis and robo-

shuttles by 2030

From… …To

SOURCE: McKinsey - Electric vehicles: Growth summary and energy impacts, McKinsey Center For Future Mobility, McKinsey – The future(s) of mobility: How cities can benefit

McKinsey & Company 36SOURCE: McKinsey Center for Future Mobility

The impacts of trends on mobility in cities is mixed, and without intervention, autonomous and shared mobility trends will inhibit select Vision 2030 objectives Enabler Inhibitor

Impact of mobility trends

Dimensions

Affordability

Efficiency

Convenience

Availability

Sustainability

Electrification

▪ EV lower TCO

may lead to small

reductions in cost

▪ Night freight

delivery could

reduce delivery

miles up to 70%

▪ xEVs reduce

carbon and air

pollutants up to

100% depending

on energy source

▪ No major impact

▪ No major impact

Autonomous

▪ Elimination of driver

reduces taxi costs ~50%

▪ Increases congestion

▪ Companies flood streets

with autonomous stores

▪ AV fleets will primarily

use xEVs

▪ Reduction in traffic

accidents (~90% caused

by human error)

▪ Reduction in accidents

and controlled trip routing

will make system more

predictable

▪ Robotaxis provide on

demand transportation

▪ Robotaxis pull demand

from mass transit

Shared

▪ Micro mobility offers new

low cost solutions

▪ Significant cost savings

will require interventions

to promote pooling

▪ Trips moving from public

transit to TNCs has

increased congestion

(53% of TNC rides were

previously non-car)

▪ Potential increase in

traffic accidents

▪ Emissions impact likely

negative in the short

term from more VMT

▪ Shared mobility

increases ease of

transferring between

modes

▪ Micro mobility increases

accessibility

▪ May undermine public

transit - 25% of e-hailing

previously public transit

Chicago Mobility

Vision 2030

Mobility choices that

are equitable and

affordable for all

A faster, smarter and

more efficient

transportation

network

A system that

contributes to more

sustainable, healthy

and livable

communities

A seamless mobility

experience guided

by data transparency

and privacy

Increased access to

seamless mobility

that is inclusive of all

residents

Net effect

▪ Autonomous shared EVs

can provide mobility at

per mile rates that are

comparable to public

transit

▪ Increased convenience

and lower price point will

lead to more congestion

(~10-20%)

▪ Significant ZEVs vehicle

sales (20-40% personal,

15-20% commercial)

▪ Increasing AV/ADAS

reduces accidents

▪ Connectivity will have

positive but small benefit

without active

engagement from the

city

▪ Residents can hail

transport within minutes

▪ Public transit may

struggle to maintain

coverage

Connected

▪ No major impact

▪ Improved data on trip

information can

improve routing and

transfers

▪ V2V comm. will reduce

accidents

▪ Connected charging

infrastructure will

promote EV adoption

▪ Connectivity allows for

an integrated mobility

platform

▪ Increased cyber risks

▪ Connectivity enables

new forms of shared

mobility (e.g. P2P

sharing)


Modeling impact of trends - 4 scenarios were used to assess the impact of macroeconomic and mobility technology trends on the mobility baseline

Seamless mobilityBaseline Business as usual Unguided adoption


shaping transportation without

any guidance from city

Impact of macroeconomic

trends while mobility

technology remains unchanged

Impact of city embracing

future mobility and

implementing interventions

City performance today based

on current behavior of citizens

Affordability, avg. % of

income spent on

transport

GHG emissions, MMT

per year from

transportation

Commute times,

minutes per trip

A B


Example - Impact of shared mobility on urban mobility: over half of e-hailing trips are new passenger vehicle miles, causing public concerns over growth in traffic and congestion

B

New

passenger car

trips that

would not

have been

made without

e-hailing

New York City

moved to ban

additional Uber

licenses in

August 2018

due to

increased

congestion and

also set a wage

floor for drivers

Other cities

wrestling with

how to manage

traffic increases

and likely to

respond with

continued

growth

Source of e-hailing growth

Percentage of trips that would have been taken by alternate mode of transport Example

47

18

3

19

12

11

6

4

53

Bus

Walk

Rental car

25Personal

vehicles

Taxi / Limo

New trips

Train

Bicycle

Total E-hailing

Traditional Mobility New Vehicle Trips

SOURCE: McKinsey Center for Future Mobility


54%

46%

1%

23%23%

23%0%

54%

1%

23%0%

15%

17%

10%

10% 1%

17.4

19.5

21.5

Case study - Macroeconomic shifts and new mobility trends will drive higher passenger miles and congestion, but modal mix will improve efficiency, affordability, and sustainabilitySimulation of mobility in North American city 2030, Passenger miles/year by modal split (billions)

Bus

AV Shuttle

Robotaxi

Private car

Rail / ‘L’ Train

Walk/

Micro-mobility


Taxi

Baseline Business as usual


shaping transportation without

any guidance from city

Impact of macroeconomic

trends without any significant

technological change1

City’s simulated performance

today calibrated on current

commuting patterns1

Business as usual

• Adoption of affordable,

low-capacity could reduce

share of mass public

transit by ~50%

• Share of low occupancy

modes increases from 55%

to 61% of overall PMT

• Without city-led intervention,

congestion is expected to

increase ~16%

Unguided adoption

1 Simulation underestimates current modal share of walking while overestimating use of public transit

CASE STUDY


Case study - Implementing the mobility recommendations can unlock the full potential of new innovative modes of transport to realize Mobility Vision 2030 objectives

Impact of needle-moving interventions in simulation

▪ Subsided AV shuttles provides

affordable transit options

▪ Affordable transit allows for a

mobility charge in the CBD

without decreasing affordability

compared to today


Mobility in City 2030, Passenger miles/year by modal split

Mobility Vision 2030

scenario

Scenario

descriptions

Unguided technology

adoption

Impact of mobility

trends shaping

transportation without

guidance from city

Impact of city guiding

future mobility adoption

through outlined

interventions

Bus

AV Shuttle

Robotaxi

Private car

Rail

AV Bus

Bicycle

1%

46%

10%

15%

17%

10%

21.5

Efficiency -

Promotion of high

capacity modes

increases

passenger miles

reduces

congestion

Expected impact Intervention levers

Affordability -

Adoption of cost-

effective mobility

technologies

reduces cost

Sustainability -

Shift to sustainable

transport reduces

overall GHG

emissions

▪ Expansion of first/last mile modes

increases transportation access,

10% of total trips involve AV

shuttles or micro-mobility

linked to mass transit

▪ Promotion of high-capacity modes

reduces congestion and improves

time to destination

▪ Overall VMT reductions due to shift

towards more shared rides and

public transit

▪ Regulatory pushes for EV fleets

and public transit reduces total

emissions

28%

8%

33%

1%

15%

14%

22.0

CASE STUDY

energy transition and mobility revolution · market intelligence performance improvement industry...

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