Date: 14.03.2023

5 Challenges Faced by the Car Market in Upcoming Years

Car market is changing due to advancements in technology, changes in consumer behaviour and shifting regulations. Car market is expected to become more autonomous, connected and sustainable. In this blog post we cover a few most important challenges in the car market in upcoming years. 

1. Controversies of Electric Vehicles

That’s a classic one. Many governments worldwide have set targets for phasing out gasoline and diesel-powered vehicles in the coming decades, which is expected to further drive the growth of EVs. But there are challenges. As stated in Forbes article “The Expensive And Harmful Truth About Electric Vehicles”, EVs are no friends of the environment. One point being made is that producing a single 450 kg EV battery requires the mining and processing of a large amount of earth, specifically 226 000 kg. Another challenge mentioned is that EV battery performance can be severely limited in cold weather, which may cause problems for drivers. Furthermore, the increased demand for electricity to charge EVs could put additional strain on an already fragile electrical grid. Finally, the author notes that despite these challenges, many people still do not want to drive EVs.

2. Autonomous Vehicles Come With Multiple Legal and Regulatory Issues

Autonomous vehicles have the potential to reduce accidents and increase mobility for those who are unable to drive, such as the elderly and disabled. In addition, AVs have the potential to improve the traffic on public roads. But with development and deployment of AVs there are quite a few legal and regulatory issues. One of the most pressing legal issues with AVs is determining who is responsible in the event of an accident. Should the manufacturer, software developer, or operator be held liable? This question has yet to be fully answered and will likely require changes to liability laws and insurance policies. In addition, AVs will generate a huge amount of data, including information about the vehicle’s location, speed, and passenger movements. This data will need to be protected to ensure that it is not misused or accessed by unauthorised parties. 

3. Mobility-as-a-Service Pricing Must Pay the Bills Yet Be Competitive

Mobility-as-a-Service or MaaS refers to the shift from personal car ownership to shared transportation services, such as car-sharing. It is a platform that lets users seamlessly plan, book, and pay for their trips. The MaaS industry is growing rapidly due to the convenience and cost savings of shared transportation, particularly in urban areas where parking is limited and expensive. One of the challenges in MaaS is pricing. MaaS requires a flexible and integrated payment system that can handle payments for different transportation services (ride-sharing, bike-sharing, car-sharing, etc.). Pricing is a challenge, as it has to benefit all stakeholders, including transportation providers, but also be competitive compared to other service providers.

4. Connected Cars Require High-Functioning Infrastructure

Cars with internet connectivity and equipped with advanced sensors and communication systems are becoming increasingly common. One challenge with connected cars is a suitable infrastructure, specifically the need for a reliable and robust network infrastructure to support the advanced communication and data exchange requirements of these vehicles. To support features like real-time traffic updates and automatic emergency response, connected cars require an infrastructure that can handle large amounts of data and provide reliable connectivity in both urban and rural areas. Also, connected cars from different manufacturers may use different communication protocols and data formats, which can make it difficult for these vehicles to communicate with each other and with other infrastructure.

5. Supply Chain Is Vulnerable

The COVID-19 pandemic, geopolitical tensions and trade disputes have highlighted the vulnerability of the automotive supply chain to disruptions, with shortages of critical components such as semiconductors, batteries, and other parts. To solve this, a more resilient and flexible supply chain must be built. There needs to be more local sourcing and production, investments in new technologies and development of contingency plans to respond to unexpected disruptions. Collaboration between automakers, suppliers, and other stakeholders will be crucial to addressing these challenges and building a bulletproof automotive supply chain.



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