未来出行：炒作转变为现实- Future mobility 2022 Hype transitions into reality -mckinsey

March2023

Automotive&AssemblyPractice

Futuremobility2022:Hypetransitionsintoreality

Progresscontinuedonmanymobilityfronts,evenas

challengesmounted.

byKerstenHeinekeandTimoMöller

2Futuremobility2022:Hypetransitionsintoreality

In2022,mobilitywas...onthemove.Thiswasayearoftransition,whichincludedsomeleapsforwardandsomeretrenchments.Afewindicatorsofdisruptionbecamequitevisible—evenpartofdailylife.Moreandmoreelectricvehicles(EVs)cannowbeseencruisingdowntheroads.Newlyinstalledchargingpointsarepoppingupinmanycountries.Novelbusinessmodels(forinstance,carsasasubscriptionserviceorasadirect-to-consumerproduct)haveblossomed.Incitycenters,carusehascomeunderincreasingscrutinyfromgovernmentauthorities,andmicromobilityoptions,suchaselectricscooters,areincreasing.

Asforotherrealmsofmobility,2022wasayearforrealignment.Investmentsinairmobilityfailedtoequal2021’srecord,thoughmanyplayersareadvancingtheirtechnologiesandinchingclosertoregulatoryapproval.Thefanfarearoundautonomousdriving—oncethesubjectofrecord-breakingfundingannouncements,seeminglyonaweeklybasis—hasapparentlysubsided.Butleadingentrantsaremakingtremendoustechnologicalprogress,scalingtheiroperationsacrossmultiplecities,andlayingapathtowardgreatercustomeracceptance.

Theautomotivesectorfacedsignificantheadwinds,generatedinlargepartbygeopoliticalissuesandmacroeconomicuncertainty.Manyautomakershavehandledthisdifficultenvironmentwithaplomb,buildingresilienceintheexpectationofa

challengingnear-termfuture.Somesuppliersaresufferingbecauseofsupplychainchallengesandthecontractionoftheinternal-combustion-enginemarket,butpocketsofgrowthremainforthosethatcanactboldly.

Inthisarticle,weshedlightonthemostimportantdevelopmentsofthepast12monthsandusethelensesoftechnology,customersentiment,andtheregulatoryandoperatingenvironmentstoenvisionwhatthosedevelopmentscouldmeanintheyeartocome.

Consumerpsychology’sinfluenceonmobility

Apanoplyofconsumerarchetypes—orpersonas—hasbeenemergingandwillplayaroleinshapingmobility’sfuture(Exhibit1).Somepersonaswillbecomemorewidespreadovertime.Otherswillfadeorevolve.

Inurbanareas,non-car-centricpersonasarepoisedtoproliferate.Membersofthisgroupwillprobablyselltheircurrentcarswithoutreplacingthem,oratleastdrivethosecarsmuchlessoften,reducingthefrequencyofreplacementandthusspendingonvehicles.Sometimesdecisionswillreflect“eco-hyperawareness.”Sometimesthey’llresultinlargerpartfromconcernsabouttherisingcostofcarownership.

Leadingautonomous-drivingentrantsaremakingtremendoustechnologicalprogress,scalingtheiroperationsacrossmultiplecities,andlayingapathtowardgreatercustomeracceptance.

Exhibit1

Shiftingconsumerpersonaswilldeterminetheshapeofmobility’sfuture.Wherethemobilitylandscapeisheadedinthenext10years,bydriverarchetype,%

Carfanatic

Cost-constrainedtraveler

Mobilitytraditionalist

Objectivelycar-dependenttraveler

Eco-consciouscarcomplementor

Multimodal

urbanist

Net-zero

enthusiast

Micromobilityenthusiast

Mobilityinnovationpioneer

In10

years

Today

20

32

20

26

13

6

17

8

5

9

5

8

97

8

5

11

Mycargivesmefreedom

andIdriveforfun

IneedtogetfromAtoB

ascheaplyaspossible

Irelyontheknownanddon’tliketochangemyestablishedmobilitybehavior

Istillneedacarbutactivelyseektoreducemytripsandconsidermoresustainableoptions

IusewhateverisavailabletogetmefromAtoBasconvenientlyaspossible

Ineedacartomastermy

everydaylifebutcould

considerswappingfor

otheroptions

Iactivelyseektobeemission-freeinmymobility

Irideabicycleorakickscootertogetaroundtown

Iamalwaysamongtheirsttotrynewmobilityofers

Note:Figuresmaynotsumto100%,becauseofrounding.

Source:McKinseyCenterforFutureMobility;McKinseyanalysis

McKinsey&Company

Micromobilityenthusiastsenjoyzippingaroundtownone-bikesandstand-upelectricscooters,akae-kickscooters.Theseconsumerstendtouseandowndifferenttypesofmicromobilityvehicles.The“multimodalurbanist”personaispartialtoasortofportfolioplay,believingthere’saproperformfactorforanygiventravelpurpose.

Car-centricconsumerpersonaswillendure,buttheirdefinitionof“car”mightexpandtoinclude

emissions-freemodels.Theymightalsobegintosupplementcarusagewithothertypesofmobilitymoreoften.

Micromobilityevolves,

minimobilityentersthescene

BeforetheCOVID-19pandemic,fundinglevelsintheshared-micromobilityindustry(primarilyelectricbicycles,mopeds,ande-kickscooters)

Futuremobility2022:Hypetransitionsintoreality3

4Futuremobility2022:Hypetransitionsintoreality

Exhibit2

soaredinlinewithgrowingridership.From2015to2019,almost$7billionwasinvestedinthismarket.Fundingcontractedsharplyin2020,toroughly$800million,buttheindustrysoonresumeditsgrowthtrajectory,withcapitalflowsrisingagaininconcert.In2021,micromobilityplayersattractedapproximately$2.9billioninnewinvestment,primarilyfore-kickscooters.

In2023,weexpectthatinvestmentsintheprivatelyheldecosystemsupportinge-bikeswillproceedapacebutprojectthatmicromobilityinvestors,ingeneral,willsharpentheirfocusonprofitability.Thiscouldfurthertheindustry’songoingconsolidation.Meanwhile,investmentflowsmightcontinuetoshiftawayfromAsiaandtowardEurope(Exhibit2).

Anothermobilitysegmenthasgainedtractionbelowthesurface.Minimobilityoptions,whichincludethree-andfour-wheeledEVsthatcanfitoneortwopeople,sitinthespacebetweencarsandbicycles.Thesevehicleshaveanaverageweightfrom100to500kilograms(about220to1,100pounds)whenunoccupied.Dependingonthe

vehicletypeandlocalregulations,theirmaximumspeedvariesfrom25to90kilometers(about15.5to56milesanhour).Ifinterestcontinuestorise,andregulatorsareonboard,theminimobilitysegmentcouldreachatotaladdressablemarketof$100billionannuallyacrossChina,Europe,andNorthAmericaby2030.Ina2021McKinseysurveyof26,000peopleacrosseightcountries,morethan30percentoftherespondentsstatedthattheywerelikelyorverylikelytoconsiderusingaminimobilityvehicleasoneoftheirfuturemobilityoptions.Viewpointsvarieddramaticallybygeographicregion,however(Exhibit3).

Autonomousvehicles:Theriseoftherobo-taxiandrobo-shuttle

In2022,thefortunesofvariousrobo-taxiandrobo-shuttleplayersdiverged:somediscontinueddevelopment,whileothersannouncedaggressiveeffortstoscaleuptheirbusinesses.Strategicinvestorsswallowedsmallerplayersintransactionsthatwereprimarilyintendedfor“acquihires.”

EuropesurpassesAsiainlevelsofmicromobilityinvestment.

Shareofpubliclydisclosedinvestmentsintomicromobilitycompanies,byregion,1%

Asia

37

Europe

29

NorthAmerica

2018–22

34

Totalinvestment,$billion

~8.4

2018–19

2020–22

60

28

12

49

42

10

~4.5

~3.9

1Figuresmaynotsumto100%,becauseofrounding.Thegeographicsplitisbasedonthemoneyinvestedincompaniesheadquarteredindiferentregions,notthesourceofinvestment.

Source:McKinseyCenterforFutureMobility

McKinsey&Company

China

Brazil

SouthKorea

JapanItaly

US

Germany

Australia

Globalaverage

Yes,Iwouldreplacemyprivatevehiclecompletely

No,butIwouldconsidergettingaminimobilityvehicleasanextensiontomyprivatevehicleforselectedtrips

No,Iwouldnotconsiderreplacingmyprivatevehiclewithaminimobilityvehicle

Exhibit3

Morethan30percentofsurveyedglobalconsumersindicatedtheywoulduseaminimobilityvehicleintheirfuturemobilitymix.

Considerationofminimobilityusageandimplied

private-vehiclereplacement,¹%ofrespondents

Not

likely

Likely

Rather

likely

11

32

57

30

19

52

35

38

26

50

24

25

51

20

29

56

17

26

66

19

15

69

14

17

46

23

31

Considerationofprivate-vehiclereplacementglobally,²%ofrespondents

35

54

11

¹Question:Howlikelyareyoutoconsiderusingaminimobilityvehicleaspartofyourfuturemobilitymix?

²Question:Wouldyouconsidereventuallyreplacingyourprivatevehicleentirelywithaminimobilityvehicle?

Source:McKinseyACESsurvey,2021(n=26,000)

McKinsey&Company

Weexpectconsolidationtocontinuein2023—especiallyforsmallerandlaggingcompetitors—whichwillultimatelystrengthenthemarketplace.OutsideChina,weprojectthatonlytwotofourplayerswilleventuallyprovidefullyautonomousrobo-taxiandrobo-shuttletechnology.

Consumerscouldbenefitfromper-milecostslowerthanthoseofothertransportationoptionsincomingyears(Exhibit4).Robo-taxismightbefavoredintheUnitedStates.Europewillmorelikelyfavorrobo-shuttles,whichcouldstealsignificantmodalmixsharefromprivatevehicles,sothatcitiesandcitizenscanreclaimspacefromprivatecars.

Airmobilitycontinues

toattractfunding

Urbanandadvancedairmobility—asegmentthatincludeselectricverticaltakeoffandlanding(eVTOL)aircraft—enjoyedrecordfundingin2021:roughly$6.9billioninnewinvestments.Fundingcooledin2022,partlyasaresultofmacroeconomicconditions,butremainedwellaheadofitsprepandemicpace(Exhibit5).

LeadingeVTOLplayersarefollowingaggressivetimelines,hopingtoachieveimportantcertificationsbythemid-2020s.Meanwhile,

Futuremobility2022:Hypetransitionsintoreality5

6Futuremobility2022:Hypetransitionsintoreality

Exhibit4

Mobilitycostscoulddeclineinthecomingdecadeaspooledrobo-shuttlesemergeatscale.

Endcustomercost,$permileonrelativebasis

7×

6×

5×

4×

3×

2×

1×

0×

Today

Privatecar¹

Personal

ride-hailing³

Pooled

Public

transit

Taxi²

ride-hailing

1Dependingoncartypefor10,000milesperyear.

2Estimationbasedona5-miletripwitha5-minutewaitingtimeinDallasandLosAngeles.3Estimationbasedona5-mile,15-minutetripinDallasandNewYork.

4Assuming3passengersonaverageand10%additionalmiles.

Source:McKinseyCenterforFutureMobility;Uberfaredata;USDepartmentofTransportationmileagedata

LowerrangeUpperrange

7×

6×

5×

4×

3×

2×

1×

0×

2030+

Robo-taxiRobo-shuttles

(notpooled)(pooled)⁴

McKinsey&Company

incumbentsaretryingtocatchup:72percentof

thelargest25aircraftOEMsand64percentofthe

largest25suppliersnowparticipateinsometype

ofadvancedairmobilityactivity.Theupcomingyear

willposeacrucialtestforentrantsthatwishtostay

onpathfornear-termflightcertification.

Theupcomingyearwillposeacrucialtestforadvancedairmobilityentrantsthatwishtostayonpathfornear-termflightcertification.

81

1216

3

Exhibit5

Fundingforfutureairmobilityhasacceleratedsigniicantlyinrecentyears.Totaldisclosedfunding,¹asofJune30,2022

Valueofdeals,$billion

Futureair6.9

mobilityecosystem

Sustainableaviation

Supersonic

Surveillance/

cargodrone

PassengereVTOL2

3.0

2.2

0.61.0

0.6

0.10.10.20.2

2013

2022H1

Numberofdeals

70

60

50

40

30

20

10

020132022

H1

Averagedealsize,$million

106

69

19

8

97

2013

2022H1

1Includesventurecapital,disclosedR&D(including$1.5billionfromHyundaiin2020),privateinvestmentinpublicequity,andfundingfromspecialpurposeacquisitioncompanies.Yearbasedontransactionannouncementdate.

2Electricverticaltakeofandlandingaircraft.

Source:CBInsights;PitchBook;S&PGlobal;McKinseyanalysis

McKinsey&Company

EVuptakediffersbyregion

andsegment

Asuccessfulnet-zerotransitionwillrequiredramaticallyincreasedEVsalesincomingdecades(Exhibit6).RecenttrendshaveincludedsomeregionaldivergencesinEVadoptionrates.Lastyear,uptakerosebyabout80percentinChinaandbyabout40percentintheUnitedStates(comparedwith2021).ButEuroperemainsroughlyat2021levels.Theslowdownreflectsdecliningsubsidies,highpricesforelectricity,andtherisingcostofrawmaterials—up120percentforlithium,togiveoneexample.

Ifconditionsdon’tchange,EVsalesintheEuropeanUnioncouldcontinuetoslow.Socouldoverallcar

sales,asindividualmobilitybecomesmoreandmoreexpensiveformanyEuropeans.Meanwhile,intheUnitedStates,long-termuptakecouldbeacceleratedbyrecentlylegislatedsubsidiesthatsupportEVpurchasing,batterycellproduction,andthebuild-outofcharginginfrastructure.Withacontinuedgenerousregulatorypush,theUnitedStatescouldreachEVpenetrationonparwithEuropeanlevels.

AnEVadoptiondividehasalsobeguntoemergebetweensegments.Buyersinthepremiumsegmentarelesspricesensitiveandmorelikelytochargeelectricvehiclesathome.PremiumOEMsare

alsosettingambitiousEVtargets.Asaresult,thepremiumsegmentistwoyearsaheadofthevolumesegmentinthepaceofelectrification.

Futuremobility2022:Hypetransitionsintoreality7

8Futuremobility2022:Hypetransitionsintoreality

80comcithimdsaccel

Current

trajectory

EU

80

US

Exhibit6

By2035,thelargestautomotivemarketsinChina,theEuropeanUnion,andtheUnitedStateswillbefullyelectric.

BEV,¹FCEV,²andPHEV³salesasashareofnewpassengervehiclesales,%byscenario

100

60

40

20

0

2020202520302035

BEV,FCEV,andPHEVsalesasashareofnewpassengervehiclesales,%bycountry/region

100

China

60

40

20

0

2020202520302035

¹Batteryelectricvehicle.

²Fuelcellelectricvehicle.

³Plug-inhybridelectricvehicle.

Source:McKinseyCenterforFutureMobility

McKinsey&Company

Batteriesremaininhighdemand

AsaresultofincreasedEVproduction,demandforbatteriesissurging—andfurtheraccelerationisexpected(Exhibit7).Toprovidecommensuratesupply,moreandlargerbatteryfactorieswillbeneededaroundtheworld.Sofar,announcementsaboutfuturebatterysupplycapabilitiesroughlymatchexpecteddemand.Butweprojectthatasignificantportionofannouncedfuturesupplywillnotmaterializeinatimelymanner,soshortageswillprobablyoccur.

Regionalmismatchesinsupplyanddemandcouldcreateadditionalbottlenecks.Despiterisinglocaldemand,Chinawillprobablycontinuetohavesignificantexcessiveproductioncapacity,forinstance,whileEuropeandNorthAmericamight

notbeabletomeettheirownlocaldemandforcellproduction.TheUSInflationReductionAct,withitssubsidiesforbatterymakers,hasmadeNorthAmericanproductionamoreappealingoption.Furtherregionalregulatoryannouncementscouldreshapetheattractivenessofbatteryproductioninotherlocales,suchasEurope.

Tosupportthescale-up,batterymanufacturerswillneedtosecureadditionalmanufacturingequipmentandrawmaterials.Thiscouldposechallenges.AustraliaandChile,forexample,nowproduceabout70percentoftheworld’ssupplyoflithium—whichcouldbealimitingfactor.Supplychainsnags,andshortagesofrawmaterialssuchasnickel,couldalsoinfluenceshiftsinfavoredbatterychemistry.

Exhibit7

By2030,40percentofglobalbatterydemandcouldcomefromChina—evenlysplitbetweenthetoptwobatterychemistries.

Demandforlithium-ionbatteries,2015–30,gigawatt-hours(GWh)

4,000

3,000

2,000

1,000

0

+32%annually

Consumerelectronics

Gridstorage

Mobility

2015202020252030

Breakdownofdemand,2030,GWh

Other

LithiumcobaltoxideNickelcobaltaluminum

Restof

world

4,000

Nickel

US

manganese

3,000

cobalt

EU

2,000

1,000

Lithiumiron

Chinaphosphate

0

BygeographyBychemistry

McKinsey&Company

Eventually,thebatterymarketcouldbeevenmoredramaticallydisruptedbydevelopmentsinnext-generationbatteries(forexample,siliconanodeandsolid-statevarieties),aswellasnewtechnologies,suchassodiumion.

Europemustrampupthe

charginginfrastructure

WithmoreEVsonroadsinEurope,itwillneedamajorbuild-outofitsEV-charginginfrastructure.Arecentanalysissuggeststhatineventhemost

conservativescenario,theEU-27willrequireatleast3.4millionoperationalpublic-chargingpointsby2030—asignificantstepupfromtheestimated375,000chargingstationsin2021(Exhibit8).

Extensiveutilitygridupgradeswillbenecessarytodistributeelectricitytothesenewchargingstations.Higherrenewable-energyproductioncapacitywillbeneededtosupplythosegridswithcleanpower.Inall,thebuild-outofEurope’sEV-charginginfrastructuremightcumulativelycostupwardof€240billionby2030.

Futuremobility2022:Hypetransitionsintoreality9

10Futuremobility2022:Hypetransitionsintoreality

Exhibit8

Thepaceofpublic-chargerinstallationsinEuropemustquadrupleby2025.

Installedpublic-chargingpointsforelectricvehicles(EVs),¹numberofinstallationsperweek

10,500

6,000perweekis

targetratefor

installationofnew

chargingpoints

4×

AverageaccelerationofweeklyEV-charginginfrastructurerolloutneededbymid-2020storeachrequirednumberofpublicAC2andDC3chargingpoints4

1,600perweekis

currentrateof

installationofnew

chargingpoints

2021

2025

2030

¹Targetraterelectsutilization-orientedscenariodescribedintheEuropeanAutomobileManufacturers’Association(ACEA)report.2Alternatingcurrent.

3Directcurrent.

4Thereare470weeksleftuntiltheendof2030andsome3millionpublic-chargingpointstobeinstalled.

Source:EuropeanAlternativeFuelsObservatory;nationaltransportandmobilityorganizations;McKinseyanalysis

McKinsey&Company

Semiconductorshortagespersist

Demandforautomotivesemiconductorscontinuestooutpacesupply,butthegapvariesbynodesize(Exhibit9).Fornodesgreaterthan90nanometers(nm),whichareinhighdemandbytheautomotiveindustry,theshortageislikelytopersistbecausematurenodeshavelowprofitmargins.Somecustomersvaluethelowpricepointsforthesenodesandhavelittleincentivetomigratetosmallerones.Forwafersfrom22to65nm,theshortagewillnotbefullyresolvedovertheshorttomediumtermbutmaylessenif(asexpected)semiconductorcompaniesincreasesupply.Overall,however,itisdifficulttopredictthesizeofthedemand–supply

gapforspecificproductsthatusesmallernodes,becauseofthehighheterogeneityofdevicetypesandtechnologies.Semiconductorshortageswillprobablypersistuntil2026,giventhelongleadtimesforchipmanufacturing.

Tomitigatechipsupplyissues,OEMscantakeseveralsteps,includingthese:

—establishingcontrolroomsthatcombinestaff

fromprocurement,supplychainmanagement,andsalestohelpensurethatnear-termsuppliesofsemiconductorsdon’tdroptounacceptablelevels

~100

~5

~35

~65

Shortage

~9

~78

~17

~61

73

25

47

6

9

8

–1

21

+2

5

7

72

5

4

–1

Exhibit9

Acombinationofstructuralissuesandcrisisreactionshasledtosemiconductorshortagesacrossallindustries.

Globalsemiconductordemandandsupply,2022,300-millimeterequivalent,millionwafersperyear

Nodesize:≥90nanometer(nm)22–65nm

Over-

~8ordering

Increased

stock

level

Crisis

reaction

~4

Forecast

demand

DemandSupply

capacity

Shareofglobalsemiconductordemand,bynodesize,2021,%

Nodesize:≥90nm22–65nm≤14nm

All

industries,

%oftotal

demand

Automotive

industry,%

ofautomotive

demand

CAGRanalysis,2021–25,1%DemandSupplyDiference

21

28

52

Note:Figuresmaynotsumto100%,becauseofrounding.

1Supplyisinstalledcapacityinmillion300-millimeter(mm)-equivalentwafers;demandfoundationisconversionofmillionsquareinchesintomillion300-mm-

equivalentwafers.

Source:OmdiaSemiconductorSiliconDemandForecastTool(Q12022);SEMIWorldFabForecast(Mar2022);McKinseyanalysis

McKinsey&Company

—chartingcleartechnologyroadmapsthatmore

preciselydefinefuturesemiconductorneeds(fornext-generationproducts,amongotherthings)

—jointlyinvestingwithsuppliersinprojectsto

improvecapacity

Thegrowingimportanceofsoftware

Automotivecompaniesandtheirsupplierscontinuetoinvestheavilyinsoftware.By2030,theglobal

automotivesoftwareandelectronicsmarketisexpectedtoreach$462billion—a5.5percentCAGRfrom2019to2030(Exhibit10).

Incontrast,theoverallautomotivemarketforpassengercarsandlightcommercialvehiclesisprojectedtogrowatacompoundannualrateofonly1percentduringthesameperiod.Thisdivergence,reflectingasignificantshiftinthefutureofmobility,hasbeenpropelledbytheexpansionofurbanaccessrestrictions,

Futuremobility2022:Hypetransitionsintoreality11

12Futuremobility2022:Hypetransitionsintoreality

ECUs/DCUs2

Sensors

Powerelectronics(excluding

batterycells)3

Otherelectroniccomponents(wiringharness,displays,speakers,boardnet)

102

93

89

Exhibit10

Theautomotivesoftwareandelectronicsmarketisexpectedtogrowat5.5percentperyearthrough2030.

AutomotivesoftwareandE/E1

marketbycomponents,$billion

CAGR2019–30,%

Software(functions,operatingsystem,middleware)

Integration,veriication,andvalidationservices

462

50

33

352

39

144

26

257

19

12

46

86

31

47

26

23

5

142

126

112

105

201920252030

+5.5

+9.2

+9.7

+4.8

+6.3

+23.1

+2.2

Vehicleproduction,

millionvehicles

+1.3%

perannum

201920252030

Note:Thisisaforecastforlightvehicles,includingpassengercarsandlightcommercialvehicles.

1Electricalandelectroniccomponents.

2Electroniccontrolunitsanddomaincontrolunits.Hardwareonly.

3Includesonboardcharger,directcurrent(DC)/DCconverter,andhigh-voltageinverter.

Source:McKinseyCenterforFutureMobility

McKinsey&Company

suchasbansoninternal-combustion-enginevehiclesincitycenters;therisingadoptionofnonownershipmodels,includingcarsharingandmicromobility;anddisruptivetechnologies,suchasurbanautonomousdriving.Inthisenvironment,automotivecompanieslooktosoftwareandelectronicsasthenextfrontierfortransformingtheindustry.

Ongoingpressureon

automotivesuppliers

Overthepastfouryears,asplayersacrosstheautomotivevaluechainincreasedtheirmargins,theprofitabilityofautomotivesuppliersfellbyhalf.In2022,themarginpressuresforautomotivesuppliersacceleratedforvariousreasons,includingshortagesofsemiconductorsandenergy,increasingcostsforrawmaterialsandfreight,supplybaseconsolidation,shrinkingdemand,

4

4

andthevolatility(sometimesdaily)ofautomotiveproductionvolumes(Exhibit11).

In2023,weprojectthatmarginpressureswillcontinuebecauseofongoingmacroeconomic,geopolitical,andtechnologicaldisruptions.Increasesinthecostoflaborandenergycouldaddtothesqueeze.Automotivesupplierswillneedtofocusonkeepingtheircostsincheck.Possiblecostreductionmeasuresincludethefollowing:

—ensuringthatOEMsprovidestrongsupport

(through,forexample,indexation,raw-materialclauses,ordirectordirectedbuyprograms)tocompensateforpriceincreases

—revisingOEMcontractsandbookinglonger-

termcommitmentstostabilizevolumes

—adaptingportfoliosandcancelingsmaller,

unprofitableprograms

—rightsizingfootprintsandoverheadcosts

Wealsoprojectthatsuppliersofcomponentsforinternal-combustion-enginevehicleswillexperiencefutureconsolidationasproductionofthosevehiclesdeclines.

Demandforzero-emissionstrucks

Forelectriclightcommercialvehicles,hockeystickgrowthindemandcouldoutstripsupply.In

thismarket,manycompaniesarelookingforzero-emissionsdeliveryvehiclesbecauseofvariousfactors:

—morestringentdecarbonizationregulations

inboththeUnitedStatesandEurope,atthenationalandthecitylevels

—environmental,social,andgovernance

accountingstandards(whichexpandaccountabilityacrossthevaluechain)forScope3emissions

—thedesiretotakeadvantageofemerginglow-

costfinancingtoreducethecostsofatransitiontozero-emissionsvehicles

Exhibit11

Automotivesuppliersarefacingpriceincreasesthatcreatemarginpressures.Hittocostbasebysupp