All traditional manufacturers and suppliers will need to develop their own answers and strategies to cope with the 5 RACES and to be well set up for the "Automotive Endgame". Each of the RACES will require massive investments and the development of often new capabilities, including software. Given the magnitude of the challenge, we believe that no player will be able to implement proprietary solutions for all 5 RACES without strong partnerships.

The speed and trajectory for each of these trends will depend on many factors. Adoption of electric vehicles, for instance, depends heavily on regulations at the national and even city level, further cost reductions for batteries and cells, the availability of competitive products including range and charging time, the availability of charging infrastructure in cities and highways, and more. We have built and are continually refining our proprietary data models for the 5 RACES, which are scenario-based and forecast the tipping points in the adoption S-Curves under specific premises.

The 5 RACES will have a massive impact on profit pools over the next decade and beyond. In some key urban areas mobility will likely be revolutionized by shared electric self-driving robo-cabs. As major trends such as autonomous driving and new mobility services allow for platform economics, the early movers—at least, those who make the right moves—may have an opportunity to build highly profitable and prohibitive business models. In contrast, companies who take a wait-and-see approach may either miss the chance to participate in certain profit pools or be forced to make huge investments to catch up.

Leading OEMs and suppliers will:

• Pick their battles and drive for leadership position in selected RACES. This will often require substantial investments in M&A and certain capabilities that are often outside of traditional automotive strongholds. It will be critical for these companies to provide a differentiated omni-channel customer interface, bringing brand values to life and establishing a unique eco-system that sticks.
• Establish smart partnerships with leading technology companies or even with competitors for other RACES. With limited resources available, winning OEMs and suppliers will work with their partners on establishing industry-wide standards and platforms to exploit broader synergies and even lock-in effects, e.g., for autonomous driving capabilities. It will be critical for these companies to provide a differentiated omni-channel customer interface, bringing brand values to life and establishing a unique eco-system that sticks.
• Manage the traditional automotive business to its full operational potential and meet key benchmark standards along the entire value chain of R&D, manufacturing, sourcing, sales/ marketing, after sales, services and general management.

Even though these massive changes will require 10 to 20 years to fully manifest themselves, it’s critical that companies make major strategic decisions and investments now, to ensure access to emerging new profit pools and to protect and grow their profitable core businesses.