1

Automotive Innovation Trend Towards Intelligent Mobility

– In collaboration with Intesa Sanpaolo Innovation Center –

March 2016

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In 2106, Frost & Sullivan predicts that the global automotive industry will, amongst other

things, continue to be shaped by investment in mobility

Frost & Sullivan

The global automotive market, represented by light vehicle sales, is expected to grow at a

stable 2-3% to reach 91 million units sales. It will be driven by growth in the United States and

Western Europe, which will offset the slowdown in China and the decline in Japan.

Global auto sales growth is expected to peak as the average car age reaches 11.7 years in

the United States and 9.4 years in Europe.

The SUV segment is expected to accelerate, growing in double digits.

The Volkswagen Group will flatline, if not shrink, as it works to re-establish its brand post-

scandal, with the possible offloading of a division.

The trifecta (triple crossover) design philosophy will take center stage with 15 new models

launched in 2016, bringing the total to about 40 by the end of the year.

Mobility will continue be in the limelight as volume Original Equipment Manufacturers

(OEMs) increasingly invest in mobility and, in particular, intelligent mobility services, moving

toward a Car-as-a-Service (CaaS) business model.

1

2

3

4

5

6

Global Automotive Market: Frost & Sullivan’s Top 6 Predictions for 2016

3

Light vehicle sales are expected to grow at a stable 2-3% in 2016 to reach 91 million

units, driven by demand in the US and Western Europe

2016

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

Africa Asia-Pacific

EasternEurope

The MiddleEast

NorthAmerica

LatinAmerica

WesternEurope

China 26.0

Japan 4.9

India 3.3

Others 4.0

South Korea 1.7

Russia 2.8

Others 1.0 Poland 0.4

Turkey 0.8

Mexico 1.4

Canada 1.8

US 18.6

Brazil 3.9 Argentina

0.6

Others 3.2

France 2.3

Germany 3.5

Italy 1.8

Spain 1.3 UK 2.8

Indonesia 0.7

Others 1.1

~ 91 Million

~ 89 Million 2016

2-3% YoY growth (2015–16)

Russia 1.1 Iran 1.2

Egypt 0.3

Canada 1.8

Brazil 3.2

2015

Un

its (

Millio

n)

Africa 1%

Asia-Pacific 45%

Eastern Europe 4%

Middle East 1%

North America 22%

Others 5%

Latin America 5%

Western Europe 16%

Africa 1%

Asia-Pacific 46%

Eastern Europe 4%

Middle East 2%

North America 22%

Others 5%

Latin America 5%

Western Europe 16%

Automotive Market: Light Vehicle Sales, Global, 2015 and 2016

LMC Automotive, Frost & Sullivan

4

Implementing intelligent mobility solutions in today’s cities and tomorrow’s mega cities

is a way of providing safer, greener and leaner transportation

Intelligent Mobility Market: Business Case for Intelligent Mobility, Global, 2015–2035

Leaner Mobility

Road congestion is currently rising steadily at an average of 6%

annually.

• Achieve 60–90 km/h on highway and 30–40 km/h on arterials

Greener Mobility

Global carbon dioxide emissions increased by 2.5% to 44

billion tons in 2014.

• Achieve fleet average of 65 g/km CO2 emission

Safer Mobility

Currently, on average, there are 52 road deaths

per million inhabitants in the EU.

• Reduce 80% of road fatalities when compared to 2014

Apart from achieving the obvious benefit of safety, intelligent mobility goes the extra mile of providing

green benefits and integrating with smart mobility options which help achieve a new, state-of-the-art

intelligent transportation ecosystem.

Frost & Sullivan

5

Convergence is propelling the market and notably the uptake of connected vehicles,

autonomous driving, car sharing and electric vehicles

Intelligent

Mobility

Technology Connectivity

Mobility

Interaction of data between infrastructure

and vehicles pertaining to traffic

information and road safety is expected to

improve accuracy of automated systems.

V2X

Autonomous driving would address the

key issue behind the majority of current

road accidents, which is human error.

Autonomous

Driving

Vehicles are enabled with intelligent

transport systems that work together with

infrastructure, environment, and in-vehicle

communication systems.

Connected

Vehicles

Best-in-class connectivity bandwidth and

cyber data security with ubiquitous

computing power will enhance the

analytical capability of data.

Big Data

Analytics

Shared

Mobility

Rapid transits are likely to address the

issue of traffic hot spots and enhance the

utility and service aspect of mobility.

Advanced models of ride sharing and car

sharing are expected to considerably

reduce zero-occupancy travel time.

Public

Transport

Intelligent Mobility Market: Convergence of Intelligence, Connectivity, and Mobility, Global, 2015–2035

Frost & Sullivan V2X = vehicle to everything

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Connected vehicles

7

Door to Door Navigation

Open Sourcing of Apps (SDK)

Ethernet

Apple CarPlay

Android Auto

MirrorLink

Connectivity Standards (USB, BT, Wi-

Fi, NFC)

Wireless Device Charging

Wireless Hotspot

Embedded LTE

App Stores

Navigation Map Over the Air Updates

(NDS)

V2V/V2X

Mobility Services (parking, Route

planning, Nav)

Connected Car Outlook: Infotainment, Telematics and HMI Features, Global, 2015

The connected vehicle segment can be broken out into infotainment, telematics and

human machine interface-enabled services and features

Automatic Collision Notification (ACN),

eCall, Roadside Assistance

HWW and Conditional Monitoring

Smart and Personalized Access with

Biometrics

Telematics-based Insurance: Mileage-

based, pay-how-you-drive (PHYD)-

based Insurance

Prognostics Services

Recall Management

Software Over-the-Air Updates

Firmware Over-the-Air Updates

Personalized Concierge Services

Impact Alert (for emergency and

insurance)

VRM and CRM

Geo-Fence Alerts and Marketing

Remote Function App with Parking

Advanced Voice Recognition

Natural Speech Recognition

Capacitive Touch Screen

Touch Gestures

Multifunctional Controller

Touchpad with Handwriting

Recognition

Hand/Air Gestures

12” Plus Central Display

Instrument Cluster Display –

Reconfigurable

Head-up Display – Combiner

Voice personal Assistants

Haptic Touch Feedback

Portrait Central Screen

Frost & Sullivan

Infotainment Telematics Human Machine Interface

Definition/Segmentation HMI = human machine interface

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Uptake is driven by drivers’ desire for greater content and comfort in the car, and the

availability of technologies linking vehicles and their environments

Driv

ers

R

estra

ints

Driv

ers

R

estra

ints

Increasing information

content Improved safety (e.g. NCAP Rating)

Product differentiation tool (i.e. low vs. high segments)

Legislation (i.e. e-Call)

Increase of IT savvy users

Driver Distraction for

some applications High cost restricts

penetration

Lack of standardization in

vehicle production lines

Driver understanding of new technologies

Desire for comfort features

Market Challenges – Global, 2015

Compatibility with different

systems

Space and weight

constraints

Security

Maintaining

compatibility

Desire for

“instant

updates”

Ensure

standardization Educate Tier

1/OEMs to new

systems

Frost & Sullivan Market Trends

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Frost & Sullivan Incentives & Regulations

• Cybersecurity has emerged as a key concern given the increasing penetration of

electronics/software across areas such as infotainment

• The market witnessed the first cyber recall at FCA with over 1.5 million cars impacted.

The SPY Car Study Act proposed by US Congress is now under debate.

• The concept of distributed end-to-end security is still non-existent in the market, and

OEMs are engaging with vendors to test specific application

Key Trends Comments

Commercial or

Concept Phase?

In reality, no vehicle has been hacked yet, but all it takes is

one attack to expose the overall weaknesses in car systems.

Level of Impact

The impact of cybersecurity is very high because it adds to the

overall security of the car, improves the brand image of the

OEMs, and allows a balance of innovation, especially on the

vehicle automation side.

Regional Impact

OEMs will launch more initiatives in North America because of

a faster push towards automation and high-speed connectivity

through to 2020.

Key OEMs Backing

the Trend

GM, Ford, Chrysler, BMW, Audi, and Mercedes-Benz are

expected to push this trend.

Key Vehicle

Segments

The impact will be across the brands and not by specific

segments.

Use Cases Protecting physical hacking attacks and V2X (vehicle-to-

everything) communications are key areas.

In theory, there are over 50

vulnerable points in the vehicle.

Frost & Sullivan has identified

15 distinct, hackable physical

points, with the infotainment

system heavily exposed.

In-car Security

Focus on

preventing cyber

attacks

However, 2015 saw the first vehicle recall based on security concerns, sharpening both

OEM and lawmakers’ focus on cybersecurity, especially in the U.S.

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18,8 23,8

29,4

36,1

43,8

51,8

60,0

69,4

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

2015 2016 2017 2018 2019 2020 2021 2022Nu

mb

er

of

Co

nn

ec

ted

Ve

hic

les

(M

illio

n)

NA Europe China Brazil South Korea Japan India Total

Frost & Sullivan expects the global market for connected cars to reach 69.4 million

vehicles by 2022, up from just 18.8 million vehicles in 2015

China is expected to lead the connected car market with high production volumes while in NA all cars sold

will have connectivity post 2020. Europe is expected to catch up soon but will be stalled a little with

Eastern European penetration. Brazil is expected to experience a slow turnaround.

Connected Car Outlook: Connected Cars Forecast, Global, 2015–2022

Frost & Sullivan Market Analysis & Forecast Base year 2015

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OEM

Voice

Recognition

Touch

Screen

Haptic

Feedback

Handwriting

Recognition Head-up Display

Air Gesture

Recognition

Reconfigurable

Cluster Display

Audi Advanced

Voice

Expected

2018 Trackpad Yes

Windshield

HUD Expected 2020 Yes

BMW Advanced

Voice

Capacitive

BMW 7 Trackpad Yes

Windshield

HUD BMW 7 Series Yes

Ford Natural

Voice

7”

Capacitive 2016 No

Expected

2016 Expected 2018 No

JLR Natural

Voice Capacitive Yes No Laser HUD

2018

Electric Field

Sensing

Yes

Mercedes-

Benz

Natural

Voice

Expected

2018 Track pad Yes

Windshield

HUD Expected 2020 Yes

Opel Natural

Voice

6.5”

Resistive No No Combiner HUD No No

Renault Natural

Voice 6” Resistive No No Combiner HUD No No

Toyota Natural

Voice Capacitive No No

3D HUD

Expected 2018 No No

VW Natural

Voice

Capacitive &

Resistive

Expected

2018

Expected

2018 Combiner HUD No No

Volvo Advanced

Voice Capacitive Yes Yes Windshield HUD Expected 2018 Yes

Connected Car Outlook: HMI Comparative Analysis, Europe, 2016

In the dynamic HMI segment, handwriting recognition and trackpad technologies are

gaining traction across OEMs although VW remains an innovator

Frost & Sullivan Key Players & Forecast HUD = head up display

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0% 20% 40% 60% 80% 100%

2021

2016

2015

More generally, growth is stemming from both voice recognition and touch screen

solutions, with suppliers focusing on improving user experience

Market Penetration

Touch Screen

Head Up

Display

Voice

Recognition

Handwriting

Recognition

Multifunctional

Controller

• Technologies like handwriting

recognition and head-up display

(HUD) are restricted to premium

models.

• Combiner HUD will have a higher

penetration rate when compared to

other HUD solutions.

• Multifunctional controllers and

handwriting recognition will find

interest in the Chinese market with

demand for ease of use.

• Increasing preference towards

capacitive technologies such as

touch screen become a commodity.

• Central display sizes will increase (9”

average) and set a trend preference

for portrait mode for better clarity

and restricted interior space.

Connected Car Outlook: HMI Technologies Penetration, Global, 2015, 2016, and 2021

Digital Instrument

Cluster

Air Gesture

Frost & Sullivan Enabling Infrastructure Base year 2015

13

HMI enable technologies continue to evolve rapidly with wearables and biometrics set to

change the ways in which drivers’ access their vehicles moving forwards

Text

Increasing trend towards

portrait central displays

with increasing sizes, e.g.,

Tesla, Volvo, and Aston

Martin

Smartphone-based

virtual assistants like

Microsoft Cortana,

Siri, and S- Voice

Wearables and biometrics

• Tier I suppliers like

Continental, Bosch, and

Visteon boasting of

combiner HUDs

• AR HUDs still in concept

phase

• Expected mass market

penetration for HUDs by

2018

• Microsoft with Volvo

working on voice-based

wearables remote access

• Mercedes-Benz remote

services with Pebble and

Google glasses and BMW

with Apple Watch

• Biometrics-based access,

convenience, and

personalization

• Networked displays with

information sharing and

control using single ECU,

e.g., Visteon

• High-end graphics for

clusters and central displays

-NVIDIA

• OEMs like Ford with

Amazon – Alexa, BMW

working with Nuance, and

Mercedes-Benz Gloria

• Hybrid and cloud-based

models, predictive options,

and self-learning modules

pioneered by Nuance

Key areas: HMI for

autonomous specific

modes and OTA for

HMI, e.g., Movimento

with Delphi

Frost & Sullivan Technology

14

Autonomous driving

15

Assisted Semi-automated Cooperative Highly-automated

2010 2025

Automated

Parallel Parking

AEBS

Traffic Jam Assist

(Semi-automated steering)

Emergency Steer

Assist

Smart Navigation (vehicle

deciding on routes)

Automated

Highway Systems

LCA (partial

steering autonomy)

ACC Intersection Assist

(powered by V2X)

Autonomous

Valet Parking and

Retrieval

Platooning

Co-operative

Adaptive Cruise

Control

Driverless

car

occupant-

specific

driving

dynamics,

alerts to the

environment

(horn, dim

dip)

Automated vehicle taking

control of navigation,

transmission, steering,

braking, and parking

Driver maintains override switch

controls to all operations.

Autonomous Driving Market: Functional Road Map, Global, 2010–2025

The autonomous driving market is moving from solutions based on advanced driver

assistance systems to cooperative and highly automated vehicles

MIRA Ltd., Frost & Sullivan Definition/Segmentation

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• Sensor fusion is expected to take ADAS to the next level by making the system more reliable; it is the necessary precursor before autonomous driving is introduced.

• The autonomous driving domain will be dominated by suppliers that have exceptional capabilities in chassis-ADAS-safety integration.

Awareness of the technology is

increasing

Continuous efforts are on to

harmonize the requirements

from country to country

Major vehicle OEMs have

started pilot testing of

autonomous vehicles on public

roads

Lack of uniform

regulations

between countries

Regulation and Standardization

Technology Innovation and

Absorption

Connectivity and Infrastructure

Nationwide Awareness and

Guidance

Value Chain Evolution

Ma

rke

t T

ren

ds

Missing Links

Key OEMs Audi, BMW, Mercedes Benz, Renault, Volvo

Key Vendors Bosch, Continental, Here, ADASworks

Autonomous Driving Market: Autonomous Market Overview, Europe, 2016–2030

Restraints Drivers

In Europe, increased public awareness together with greater OEM pilots and efforts to

harmonise legislation are driving the market forward

Frost & Sullivan Market Trends

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Autonomous Driving Market: Legislation, EU, 2015

Country What Is Permitted

Special

Requirements/

Conditions

United

Kingdom

• Automated vehicles can legally be tested on UK roads. The current domestic regulations is to be

reviewed and amended to accommodate driverless technology by 2017.

• The intention is to interact at an international level with an intention to amend international

regulations by 2018.

Presence of test

driver required.

Germany

• Currently, testing of highly and fully automated vehicle technologies does not comply with the

German law, although semi-automated technology testing is permitted.

• Presently, for testing automated vehicle technologies, each Federal State can grant exemptions

from German Road Traffic Licensing Regulations.

Presence of test

driver required and is

fully responsible for

safe testing

Sweden • Testing of highly automated vehicles on public roads in restricted areas in and around

Gothenburg is permitted. It is a part of Volvo’s “Drive-Me’ project. -

France

• Currently, the government is scrutinizing regulatory issues that may constrain testing of

automated vehicles.

• The roadmap for testing automated vehicle technologies was published in 2014 and indicates

pilot zones and authorizes experimental on-road testing of partial and highly automated vehicles.

More focus on

improvement of public

transport systems

The

Netherlands

• A proposal to extend exemption laws to permit large scale testing of passenger cars and

commercial vehicles was approved in January 2015 Limited admittance

Testing of highly automated vehicles has until now been taking place under ad-hoc

permits as no country has a comprehensive set of regulations in place

Frost & Sullivan Incentives & Regulations

18

0

2.000.000

4.000.000

6.000.000

8.000.000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Un

its

Autonomous Driving Market: Unit Shipment Forecast, Europe, 2015–2030

Level 2 Level 3 Level 4

• By 2021, more than 1 million units in the Western European market are likely to have level 2

automation with strong market push due to insurance-related consumer incentives and wider

availability.

• With OEMs taking the wait and watch approach with level 3 automation, in 2016 and 2017 zero to

minimal adoption of high automation, beyond petri dish projects by Volvo, Audi, BMW, and

Mercedes-Benz, is likely.

Frost & Sullivan expects that 10%to 15% of new vehicles in Europe will be highly

automated in 2030, with more than 30% offering lower levels

Frost & Sullivan Market Analysis & Forecast Base year 2015

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OEM

Currently Available Future Offering

Supplier

Tie-up Feature SAE Level Feature SAE Level Year Models

Audi Traffic Jam

Assist Level 2

Traffic Assist,

Piloted driving,

and Piloted

Parking

Level 3 2017

onwards

A8, A7 and

Q8

Valeo,

Mobileye,

Continental,

Bosch

BMW

Traffic Jam

Assist,

Assistive

Parking

Level2

Active Assist and

Remote Valet

Parking

Level 3 2018

onwards

7-Series and

5-Series

Continental &

ZF

Lenksysteme

Cadillac AEB, ACC Level 1 SuperCruise Level 3 2020

onwards

CTS and

Escalade

Mostly in-

house, TRW,

Laird Tech

Ford Adaptive

Cruise

Control, AEB

Level 1 Active City Stop Level 2 2017

onwards

Fusion and

Escape

Continental,

Velodyne,

Bosch,

In-house

Mercedes-

Benz

Traffic Jam

Assist Level 2

Distronic Plus

with Steer Assist Level 3

2019

onwards

S-Class and

E-Class

Quanergy (For

R&D)

Tesla Autopilot Level 2 Autopilot 2.0 Level 3 2019 Model S, X 3 Mobileye,

Bosch, NVIDIA

Volvo Pilot Assist Level 2 City Safety Level 3 2022

onwards XC 90, S90

Continental,

Autoliv

Indeed, over the next few years there is a danger of some commoditization as OEMs

such as Ford introduce level 2 solutions to their models

Frost & Sullivan Key Players & Forecast SAE = SAE International’s levels of driving automation (from 0, no automation, to 5, fully automated)

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* Needs improvement ** Barely satisfactory *** Good **** Very good ***** Ideal solution

• Reliability: In a co-existent

driving environment, V2X

provides better collision

avoidance rate due to its

capability to address a

wider audience.

• Accuracy: While ADAS

has the capability to see

and perceive the

immediate surroundings,

V2X enables farsighted

vision.

• Fitment: While ADAS

applications are OE fit,

V2X applications can be

readily available because

aftermarket fitment comes

at highly affordable prices.

V2X

Intelligent Mobility Market: Comparative Analysis of Sensor Suite, Global, 2015–2035

RADAR LIDAR Vision

Infra

Red V2X

Short distance

(0 to 2m) *** **** ** ***** *****

Nominal distance

(2 to 30m) ***** ***** ** ***** *****

Long distance

(30 to 100m ) *** ***** ** *** *****

Narrow range <10deg *** ***** ***** ***** *****

Wide range >30 ** ***** ***** **** *****

Angular resolution *** ***** ***** **** -

Object speed measurement ***** * * * *****

Bad weather operation **** ** ** **** *****

Blockage ***** **** * *** ***

Night operation ***** ***** * ***** *****

Cost **** * *** ** *****

No single technology can currently cater to all of the requirements of highly automated

vehicles so a synthesis of sensors such as RADAR and Infra Red is needed

MIRA Ltd., Frost & Sullivan Key Players & Forecast LIDAR = light detection and ranging

21

2010–2015

2015–2020

2020–2025

OEMs promoting developmental activities for

V2X technologies through trials

Services provided: Internet global services,

community services (VM services)

High penetration level in

urban cities with strong

compulsion for OEMs and

aftermarket device

manufacturers to the

functionality

Services like hazard

warnings, floating car data

warning, and high speed

sensing to be incorporated

with eCall

Likely mandate of V2V/V2I services in

key European countries with major

emphasis in Netherlands, Sweden,

France, Germany, and Denmark

Co-operational vision, V2V, V2I

communications and deployment plan with

consolidated strategy planned by consortiums,

vehicle manufacturers, suppliers, road operators,

telecom authorities, and other stakeholders

Deployment of V2V/V2I communication

platform for commercial vehicles and fleet

operations

Traffic light assistance and real-time traffic

information to be coordinated

Restructuring activities of current

on-board units and roadside units

at major areas of cities, followed by

massive up-gradation in Europe

Services extended to buses and

public transport services

Intelligent Mobility Market: V2V and V2I Road Map, Global, 2010–2025

V2X is currently the most reliable solution but it is hoped that sensor fusion and the

emergence of V2V and V2I will lead to truly autonomous driving

Frost & Sullivan Technology V2V = vehicle to vehicle, V2I = vehicle to infrastructure

22

Car sharing

23

Frost & Sullivan Definition/Segmentation

Most cars are idle for 92% of their lifetime. P2P carsharing is a business model that monetizes this

idle asset. It is positioned to fill in the gap between rental durations of car rental and traditional

carsharing services, providing a different use case targeting weekend rentals in most cases.

Car Rental

• Average rental duration 3 to 11 days

• Round-trip/station-based services (e.g., Avis, Enterprise)

• Use cases: business travel, replacement vehicle, leisure trips

Peer-to-Peer

• Average rental duration 2 to 4 days

• Insurance is key in the revenue sharing model

• Key participants include Getaround, RelayRides, Drivy, Tamyca

• Use cases: weekend rentals

Traditional

• Average rental duration 6 to 8 hours

• Round-trip/station-based services (e.g., Zipcar)

• One-way, fixed point-to-point journeys (e.g., Autolib)

• One-way, free floating services (e.g., car2go, DriveNow)

• Use cases: business/airport, leisure

Carsharing – an extension of car rental – is a form of shared and sustainable personal

transport segmented into traditional and Peer-to-Peer (P2P)

24

Frost & Sullivan Market Trends

The reduced costs of daily commuting and overall vehicle ownership, together with

increased smartphone penetration are driving uptake

Trust Issues: Owners are concerned

about the risk of damage to their

vehicles.

Dri

ve

rs

Res

train

ts

Increasing Costs: Higher insurance costs are being passed on to

renters.

Legislation: Ambiguity regarding liability insurance is a

challenge. State insurance laws have

not caught up with the industry.

Financial Case: Owners can earn

between $5 to $12 per hour. Additionally, there are other cost savings such as free parking.

Smartphone Penetration and Use

of Mobility Apps: Smartphone

penetration in the EU5 is 44% and in the US it

is 41.8%.

Technology: Technology will

become cheaper and more accessible,

helping P2P operators expand their market

reach.

Collaborative Consumption: A shared economy

appeals to the younger generation.

Scalability: Expansion is negatively affected

by the lack of customers, inadequate

revenue inflow, and lack of funding.

Increasing Access over Ownership:

Each shared vehicle removes approximately 10

cars from the road.

P2P Carsharing Market: Drivers and Restraints, Europe and North America, 2015–2025

25

Europe is expected to lay out a new regulatory framework facilitating P2P carsharing

with insurance remaining an important consideration globally

Frost & Sullivan Incentives & Regulations

• Each vehicle rented through a P2P CSO requires additional insurance. Hence,

approximately 15% of the total rent is allocated for additional insurance.

• Accepted vehicles include: standard cars, utility vehicles weighing less than 3.5 tons, and

vehicles with power less than 200 KW which should be registered in the same country.

• The vehicle to be rented should not be more than 20 years old and the replacement

value not more than $80,000 (some insurance companies limit the value to $55,000).

• Germany: Insurance coverage must be up to $1.5 million, with personal injury cases at a

maximum of $12 million per person.

• Australian legal regulations require each vehicle owner to ensure that their vehicle is

covered by compulsory third-party insurance that also provides cover for rental use. Apart

from that, vehicle gets coverage of up to $30 million for third-party property damage.

• China issued a nationwide ban on drivers of private cars offering taxi services through ride

sourcing apps. However, the ban excluded the P2P carsharing market because it could

not be defined as a taxi service. Also, shared services in China have been experiencing

significant growth since the carpooling ban was lifted. As

ia-P

ac

ific

N

ort

h A

me

ric

a

Eu

rop

e

P2P Carsharing Market: Legal and Regulatory Framework, Global, 2014

• Each state has a different legal regulation in the United States. However, the following 5

states—California, Washington, Oregon, Illinois, and Texas—support P2P carsharing by

defining it as a service, which also makes it necessary for operators to provide insurance

at least 3 times the state minimum for personal auto insurance. Insurance laws enabling

P2P carsharing as a service are expected to cover 5 more states by the end of 2016.

• Canada requires additional insurance coverage with a minimum of $1 million.

• High insurance costs act as a barrier for entry into the North American market.

CSO = carsharing operator

26

Growth in members of P2P schemes will reach 16% (CAGR 2014-25) but the member-to-

vehicle ratio will remain low due to a “local” business model

Frost & Sullivan Market Analysis & Forecast

Typ

e

Year

Countries

Adopted

# of CSOs

(Approx.) Key CSOs

Members

(Approx.)

Vehicles

(Approx.)

M:V Ratio

(Approx.) Remarks

Tra

ditio

nal C

ars

ha

rin

g

2014

1. France

2. Germany

3. UK

45

• Zipcar

• Hertz On

Demand

• Enterprise

• Communauto

Car2Go

• DriveNow

1.7 million 20,555 52 More members

expected to

join traditional

CSOs as

corporate

carsharing

customers 2020 > 50 4.35 million 87,000 50

P2

P C

ars

ha

rin

g 2014 12

• Drivy

• Buzzcar

• Tamyca

• Autonetzer

• GoMore

868,000 64,800 13 Much lower

member to

vehicle ratio

due to localized

schemes and

varying

utilization 2025 <20 4.3 million 228,162 19

Carsharing Market: Snapshot of Traditional vs. P2P Carsharing, Europe, 2014–2025

Base year 2014

27

Frost & Sullivan Key Players & Forecast

The most developed market in Europe by some distance in terms of both members and

vehicles is France, with Drivy currently the local P2P leader P

2P C

ars

ha

rin

g O

pe

rato

rs

OuiCar 2007

(Previously

Zilok)

MyWheels

2010

Tamyca

2010 SocialCar

2011 Degage

easyCar Club

2013

GoMore

2011

FlexiDrive

2011

Drivy 2010

(Previously

Voiturelib)

Deelauto

Zutphen

Autonetzer

2010 GoMore

2015 Autopia VZW

Rentecarlo

2014

MinbilDinbil (Acquired by

SnappCar)

CityzenCar

2011 (Acquired

by Buzzcar)

WeGo

2011

(M) 140,000

(V) 17,000

(M) 8,700

(V) 1061 (M) 600

(V) 30

(M) 10,000

(V) 800

(M) 28,000

(V) 3,500

Buzzcar

(Acquired by

Drivy)

SnappCar

2011

UneVoitureAL

ouer

(Acquired by

OuiCar)

(M) 96,100

(V) 12,020

e-loue 2009

Deways 2010

(M) 718,000

(V) 47,000

• WhipCar (2009 to 2013) was the only operator to exit the market.

• Respiro and MovoMovo went back to traditional carsharing in

2014.

• Smaller market participants have been acquired or partnered with

other major regional market participants such as Drivy and

OuiCar.

• The major participants in Europe are Drivy (FR), Tamyca (DE),

and Autonetzer (DE) with Drivy acquiring Buzzcar towards the end

of the 1st quarter in 2015.

Europe

P2P Carsharing Market: Key Market Participants, Europe, 2014

Dates correspond to the year of establishment

28

Online registration platforms and centralized payment solutions are facilitators of P2P

carsharing programmes for both owners and drivers

Frost & Sullivan Enabling Infrastructure

Ow

ne

r

Register/Add Car:

• Register on operator Web site for free by adding the car, and setting the price and availability

Answer Request:

• Accepts/rejects requests

• Copy of renter’s driving licence is sent to operator once accepted

Rent Vehicle:

• Meet driver and exchange keys

• Sign rental agreement with insurance and roadside assistance

Receive Vehicle:

• Gets the car back after rental time period

• Earns 70% of rental payment

• Payment gets credited in the bank account in 48-hours or 1 week

Dri

ve

r/R

en

ter

Register:

• Register online for free

• Should be at least 21 years old, holding 2- year old driving licence

• Submit driving licence photograph

Reserve Vehicle:

• Send requests based on location and price

• Choose a vehicle

• Owners respond within 24 hours

Collect Vehicle:

• Pre-authorize payment before collecting vehicle

• Collect the vehicle after signing rental agreement

Return Vehicle:

• Return the car after the rental period to the owner

• Rental amount will be charged at the end of the rental

29

Keyless entry devices are currently more common in North America than Europe but will

increase vehicle availability and member earnings

Frost & Sullivan Technology

Data Capture Mechanisms

• Navigation

• Driving time

• Trip data

• Over-speed events

GPS

Data

• Accelerometer

• Recovery and

immobilization

• Geo-fencing to

designate boundary for

vehicle

Vehicle

Data

• Logbook: Monthly breakdown of driving time,

categorization of driving as business/personal expense

• Maintenance Alerts: Periodic indications regarding oil

change, tire pressure, and fuel level

• Vehicle-to-vehicle Communication: Emergency

assistance, 24/7 news

• Hands-free calling

Key Market Participants Offering Keyless Entry

• Getaround’s Connect: Offers 30-day free trial and

guarantee $1,000 earnings in 3 months

• JustShareIt’s RideLink: Provided 250 free devices as

introductory offer

• Koolicar’s KoolBox: Mandatory fitment on all vehicles

registered with Koolicar

• Device cost and installation charges: $300 to $400

• Monthly package subscription charges: $15 to $20 per

month

Terms and Conditions:

• Vehicle availability at least 16 to 40 hours per week

• Model year is 2005 or newer with less than 90,000 to

125,000 miles

• Vehicle should not have any other security devices

installed

P2P Carsharing Market: Keyless Entry Enabled Vehicles, Europe and North America, 2014

Service Packages

30

Electric vehicles

31

Neighborhood Electric

Vehicles (NEVs)

Battery Electric Vehicles

(BEVs)

Extended Range Electric

Vehicles (eREVs)

Plug-in Hybrid Electric

Vehicles (PHEVs)

NEVs are a US DOT

classification for vehicles

weighing less than 3,000

lbs (GVW) and having a

top speed of 25 mph.

Generally, NEVs are

restricted to operate on

streets with a speed limit

of 35 mph or less.

BEVs are a European

classification for small

and light vehicles

intended for use in urban

areas, although they are

also capable of operating

in a mixed city-highway

environment.

E-REVs have an ICE or

another secondary power

source connected in a

series configuration to a

generator that supplies

electricity to the batteries.

Drive range and speed

are comparable to ICE

vehicles.

PHEVs have an ICE with

a motor along with a

battery connected in

parallel to the ICE.

Generally, they are

regarded as full hybrids

with a larger

motor/battery and a

recharge plug.

GEM, E2, E4, E6, ZENN,

ZAP

Nissan Leaf, Tesla Model S,

smart fortwo ED, BMW i3

Chevrolet Volt, BMW i3 REX,

Opel Ampera

Toyota Prius PHV, Honda

Accord PHEV

The electric vehicles market can broadly be segmented into “pure” electric and hybrid

vehicles, the latter of which use range extender and plug-in technologies

EVs use electric motors instead of an internal combustion engine (ICE) to propel a vehicle. The electric

power is derived from a battery of one of several chemistries including lead acid, nickel metal hydride (NiMH),

and lithium-ion (Li-ion).

Total EV Market: Classification of PHEVs and EVs, Global, 2014

Image Source: PSA, Nissan, GM, Toyota Frost & Sullivan Definition/Segmentation

32

Frost & Sullivan Market Trends

Preference towards eREV and PHEVs: The trend indicates a preference towards longer range

vehicles that allow the confidence to drive an EV up to and past the pure electric range. The BMW

i3 sales split between BEV and eREV demonstrates the trend. 1

Inclusion of EV Service Offerings: All the major European OEMs such a Audi, BMW, Daimler,

PSA, and Volkswagen are offering at least 2-3 EV-related services to bridge the gap between the

conventional vehicles and the driving habits. The services range from free-of-cost charging to

accessing an alternate vehicle for longer commutes.

3

Incentives for EVs: All EV manufacturers are looking to capitalize on the available incentives

and subsidies, mainly in China. Due to an annual decrease of 5% incentive in China, OEMs such

as Tesla are looking at alternatives to qualify for incentives. 4

Alternative Technologies: OEMs such as Honda, Hyundai, and Toyota are promoting Fuel Cell

Vehicles (FCVs) as an alternative to EVs and are likely to continue to launch FCVs through 2016

APAC, Europe, and North America. 5

2 Focus on China: Major OEMs such as BMW, Tesla, and Daimler have high expectations for the

Chinese market and have designed growth strategies to establish themselves firmly in the market,

including expectations to benefit from the available incentives and subsidies.

In Europe and North America consumers’ preference is for longer range vehicles, whilst

China offers an absolute opportunity for electric vehicle OEMs

33

Country

Direct

Purchase

Incentive

Free

Charging

/ Free

Parking VAT

Exemption

Registration/

Road Tax

Exemption

Annual

Circulation

Tax

Exemption Company Car

Fleet Incentive Change

Germany - In 2015 - - 100% (for a

period of 10

years)

Discount on income

tax payable

(calculated on

income tax slab

and battery power)

More incentives

expected post 2015

(access to bus lanes)

France €7,000/

€3,300 for

PHEVs

Free

private

parking -

Up to 75%

(registration tax) -

100% (on annual

tax on company

cars)

Bonus for utility vehicle

to phase out by end of

2014

United

Kingdom

25% cost of

car up to

£5,000 Yes - 100% (road tax) -

100% (for first 5

years)

Purchase incentives to

reduce from 2015 and

likely to phase out by

2016

Italy - - - -

100% (75%

after 5 years

of

registration)

- -

Sweden SEK 40,000 - - - 100% - Annual circulation tax

likely reduce or phase

out post 2016

Ireland - - -

Up to € 5,000

(registration tax),

€2500 for PHEVs

- Likely to reduce by

2017 -

The nascent market is highly dependent on incentives and subsidies with the extent of

government support differing across European countries

Total EV Market: EV Incentives and Subsidies, Selected European Countries, 2014

Frost & Sullivan Incentives & Regulations

34

70.000

75.000

80.000

85.000

90.000

95.000

100.000

105.000

110.000

2013 2014 2015 2016 2017 2018 2019 2020

Mig

lia

ia

ICE HEV PHEV BEV FCEV

FCEV (0.1%)

HEV (5.6%)

ICE (92.1%)

PHEV (1.6%)

BEV (1.3%)

Frost & Sullivan expects that sales of electric vehicles will reach 10 million globally by

2020 with full and mild hybrids available as standard

Hybrid

Sales

>1.5M

More clarity on

mild hybrid

adoption

China New

Energy Vehicle

policy showing

results

Shift from full

hybrids to

PHEVs in the

West

Series

production of

FCEV

Witness EVs growth

increase and HEV

growth shrink

Total EV Market: Sales Forecasts for ICE, HEV, PHEV, BEV, and FCEV, Global, 2013–2020

Frost & Sullivan Market Analysis & Forecast

Base year 2014

35

23.253

572

16.949

580

9.001

29.293

21.563

199

16.062

16.080 3.799

19.698

1.000

19.474

5.005

0 10.000 20.000 30.000 40.000

Re

na

ult

Nis

san

Gen

era

lM

oto

rsM

itsu

bis

hi

Toyota

Tesla

APAC

China

North America

Europe

70.233

2.144

4.358

1.277

28.880

20.991

32.265

20.370

1.911

0 20.000 40.000 60.000 80.000

Re

na

ult

Nis

san

Gen

era

lM

oto

rsM

itsu

bis

hi

Toyota

Tesla

NEV

PHEV

eREV

BEV

Total EV Market: Top OEM Breakdown by Region and EV Type, Global, 2014

Nissan leads the way with over 68,000 electric vehicle sales world wide, of which 23,000

were in Europe, followed by Mitsubishi, Tesla, General Motors and Toyota

Frost & Sullivan Key Players & Forecast Base year 2014

36

The Netherlands and France have the most developed charging infrastructure but rapid

charging DC stations are most common in the UK

Country CP DC Key Operators

Austria 1,500 18

Austrian Mobile Power,

Spar

Belgium 1,530 20

Siemens, Park &

Charge, Rittal

Denmark 1,190 56 EON, Clever

France 6,050 110

EDF, Park & Charge,

Vinci Autoroutes

Germany 4,340 53 RWE, Bosch

Netherlands 8,580 80 Epyon, Alfen, ABB

Norway 5,720 96 Transnova, City of Oslo

Switzerland 1,020 30 Park & Charge, Alpiq

United Kingdom 3,780 110

Podpoint, Elektromotive,

Chargemaster

3,780

5,720

6.050

8,580

1.020

4.340

1,190

Total EV Market: Charging Station Installation Base, Europe, 2014

Frost & Sullivan Enabling Infrastructure

CP = charging point, DC = direct current, Base year 2104

37

Lithium-ion batteries are currently the most common with lithium sulfur and zinc air

batteries likely to be adopted in the next 8 years

2015 2020 2025 2030

Li-ion

Lithium

Sulfur

Zinc Air

Lithium

Air

Launch

Energy Density

Cost

Lifecycle

Launch

Energy Density

Cost

Lifecycle

Launch

Energy Density

Cost

Lifecycle

Launch

Energy Density

Cost

Lifecycle

Second Generation EVs Third Generation EVs

110-150 Wh/kg > 250 Wh/kg

$300-$400/kWh $150-$200/ kWh

700-1500 cycles > 1,500 cycles

Prototype and Testing Introduction

500-600 Wh/kg (theoretical) 400 Wh/kg (practical)

$400-$500/ kWh $100-$150/ kWh

500-1,000 > 1,000

Prototype and Testing Introduction

450-500 Wh/kg 380 Wh/kg (practical)

$400-$500/kWh $100-$150/kWh

150-800 > 1,000

Prototype Introduction

800-900 Wh/kg

(theoretical) 600 Wh/kg

$500-$600 kWh $300-$400/

kWh

100-300 >1,000

Total EV Market: Future Battery Chemistries in EVs—Technology Roadmap, Global, 2015–2030

Frost & Sullivan Technology

38

Italy

39

0,0 1,8 3,5

Ukraine

CzechRepublic

Poland

Turkey

Russia

Spain

Italy

France

UK

Germany

2016 2015

5,9%

3,0%

11,5%

2,1%

-14,1%

9,3%

9,6%

2,9%

6,4%

0,6%

-15,0% 0,0% 15,0%

In Western Europe, growth in light vehicles is expected to be highest in Italy in 2016 with

shipments of 1.84m units, up 9.6% from 1.68m in 2015

LMC Automotive, Frost & Sullivan

United Kingdom

UK vehicle sales have continued their upward growth

trajectory driven by the strong British pound,

manufacturer incentives, and attractive financing linked

to low interest rates. Compact cars and SUVs drove

growth, accounting for 40% and 20% of total sales,

respectively. Sales are anticipated to level off in 2016.

Italy

Italy’s growth is expected to continue at about 10% in

2016, driven by replacement cycle.

Spain

Spanish sales grew at 22% in 2015 as economic

recovery took hold and consumers took advantage of

state subsidies for scrapping old vehicles.

Russia

The financial crisis resulting from Western sanctions has

led to consumer uncertainty and a delay in larger

purchases. Overall sales fell by 39%; the entry car

market was much more affected than the premium

market. Sales are expected to continue to fall in 2016.

Automotive Market: Light Vehicle Sales, 2015 and 2016

YoY Growth, % Sales, Units M

40

Electric vehicles in Italy are exempt from the annual circulation tax for a period of 5 years

from the date on which they are registered.

After 5 years, they will benefit from a 75% reduction in taxes compared to gasoline

vehicle taxes in many regions.

The government is investing in building eCharging infrastructure and increasing R&D into

alternative fuels and hybrids.

Installation of over 1,500 charging stations is expected in Italy, with government support

extended to both private and public initiatives.

The Italian government is looking to boost the sale of electric vehicles in particular by

providing support on both the demand and supply side

Chargemap, Frost & Sullivan

Country Normal

3 to 7 kW

Accelerated

8 to 22 kW

Rapid

>23 kW

Italy 406 212 17

EV Market: AC Charging Points, 2015

Demand

Supply

41

Base year 2104 The Fiat 500e is sold primarily in the US

Local OEMs are responding with Fiat launching the 500e and Ferrari’s hybrid supercar

confirming interest in the booming luxury EV segment

Frost & Sullivan

• The launch of LaFerrari has confirmed the interest

of automakers in producing electric supercars.

• There are 499 units that will be produced; however,

all the units have been pre-sold.

• This is the fastest Ferrari to date, with total 949 hp

that includes a 214 kW electric motor. LaFerrari PHEV

345 1.555 2.445

3.872 5.979

12.567

17.338

22.064

0

5000

10000

15000

20000

25000

2013 2014 2015 2016 2017 2018 2019 2020

EV Markets, Sales of the Fiat 500e, 2013-2020, Global, Units

LaFerrari

42

Appendices

43

Principal abbreviations

ACC Adaptive Cruise Control Kg Kilogram

ADAS Advanced Driver Assistance System Km Kilometre

AEBS Advanced Emergency Braking System KW Kilowatt

APAC Asia-Pacific KWh Kilowatt hour

BEV Battery Electric Vehicle LIDAR Light Detection and Ranging

CaaS Car-as-a-Service Li-ion Lithium-ion

CP Charging point NA North America

CSO Carsharing Operator NCAP New Car Assessment Programme

DC Direct current NEV Neighbourhood Electric Vehicle

ECU Electronic Control Unit NiMH Nickel Metal Hydride

EREV Extended Range Electric Vehicles OEM Original Equipment Manufacturer

EU European Union OTA Over-the-air

EV Electric Vehicle P2P Peer-to-peer

FCEV Fuel Cell Electric Vehicle PHEV Plug-in Hybrid Electric Vehicle

FCV Fuel Cell Vehicle R&D Research & Development

G Gram SUV Sports Utility Vehicle

H Hour US United States

HEV Hybrid Electric Vehicle V2I Vehicle-to-infrastructure

HMI Human Machine Interface V2V Vehicle-to-vehicle

Hp Horsepower V2X Vehicle-to-everything

HUD Head Up Display Wh Watt-hour

44

Frost & Sullivan www.frost.com

March 2016

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Intesa Sanpaolo Innovation Center

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