Goldman: These Seven Megatrends Are Going to Reshape the Auto Industry

Prepare for change

Goldman is out with a note this morning where Kota Yuzawa and his team predict some major changes in the auto industry over the next decade. 

Not only will steering wheels be a thing of the past, but the firm is calling for several other new advancements to be more common as well. 

The auto industry’s need to embrace technological change is more urgent now than ever before. Innovations are accelerating, opening up opportunities – and challenges – for automakers: Cars that lack steering wheels, brake when they sense a person or object, emit only water when on the move, or use advanced materials like carbon fiber reinforced polymer – these are just some of the innovations that will be commonplace by 2025.

Here are the seven "megatrends" the firm talks about in the note, along with a cool graphic summarizing it. These are their bulletpoints:

  1. Endless powertrain advancement: Electrified vehicles will become 25% of global car sales by 2025. 
  2. Autos on a severe diet: A 50kg drop in vehicle weight cuts CO2 emission volume by 1g per km. New materials to reduce car weights.
  3. Autonomous driving on horizon: Google wants to realize Level 4 automation by 2017. Autonomous driving could change society.
  4. Power shift to mega suppliers: Meeting CO2 regulations will cost automakers US$2,500 per vehicle. We expect the presence of mega suppliers to expand.
  5. New entrants afoot: The appearance of autonomous driving and EV is removing auto business entry barriers.
  6. Connected cars and shared mobility: Networked cars changing business models for industries from insurers to rental fleets.
  7. Shift to emerging markets: Motorization in emerging markets continues unabated. By 2025, we expect China to have 35 mn vehicles and India 7.4 mn vehicles.
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