Total Conversion: The IAA Transportation 2024

The IAA TRANSPORTATION in Hannover this year made two things clear:

?? Electrification of Commercial Vehicles is now. Not tomorrow.

???? Chinese suppliers and brands are at eye-level with legacy brands. Or above.

To many of us, who’ve followed the #mobilityrevolution for over a decade, or are #futuremobility investors, this is certainly no surprise. But to many fleet and commercial visitors of the IAA, this will have been the moment they were finally and fully converted - to new energy and to a wider choice of brands.

Almost every brand and supplier put fully electric vehicles front-and-center (although there was some acknowledgement of dual-fuel, H2, and hybridisation). But this wasn’t about greenwashing - it was purely, finally, about economics. This audience may acknowledge decarbonization goals and fleet #CO2 #emission targets, but (almost) the only thing that matters in fleet and CVs is TCO - total cost of ownership. And the calculation is clearly falling in favor of the BEV (as we projected almost a decade ago). Daniel Schulze of Scania now expects more than half of sales to be fully electric by 2030, suggesting even that over time the TCO benefit will be so overwhelming that “1EUR in BEV = 2EUR in Diesel”.

Most impressive were the big trucks on display from Scania Group (“Future Energy Hub”), MAN Truck & Bus SE, Volvo Trucks ("Together Toward Zero”), Daimler Truck AG (premiere of the new eActros), IVECO, and also Tesla (European Debut of the Semi), but the electrification went across all sizes and use-cases. Rubbish trucks? Yes. Last-mile-delivery vehicles? Of course. Panel vans? Naturally. Tippers? Yup.

The IAA showed everything from (a modest few) cargobikes to multi-axle trailers and buses. Notable, however, is the lack of European legacy brands in the sub-LCV category; it takes startups (like Dutch Duracar ) for innovation at this size, I suppose.

Kia Worldwide ’s #PurposeBuiltVehicle concept (by another name) made its first appearance in Europe - testament to the brand’s intentions in this sector, along with a partnership announcement with Geotab and an 150,000 km warranty (drivers will appreciate the piece-of-mind while investors will be watching the accruals closely!)

A star of the show - from German perspective - was the launch of the T7 Volkswagen Transporter, available in BEV, PHEV, Petrol and Diesel variants. Although it fills a gap in the product-portfolio slightly above the eBulli, it’s not filling the production-capacities in Hannover. Bewildering then from a spectator point-of-view was the Ford in Europe signage outside of the show advertising THE Transporter. With a warm partnership and both vehicles on the same platform, couldn’t marketing teams agree who, after all, is the Transporter of Transporters?

The other notable - and similarly obvious - trend was the ubiquity and confidence of new brands and suppliers across the entire show.

An entire hall in Hannover was dedicated to suppliers from China (ADAS, sensors, lighting, etc.), but the key suppliers confidently showed as large, or larger stands than the incumbents. A friend at a first-tier supplier confirmed that competition and quality "is at eye-level”, while western suppliers struggle to compete on price. Decades-long relationships mean little in an increasingly transactional market.

I’ve written at length about this before, and this is not news (I also recommend following Bill Russo and Tu Le for more insights). In the context of the IAA, and perhaps just this last time, we’ll make a note of the Chinese manufacturers as “new”, although it’s quite clear along the entire value chain, they are just as much part of the fabric as Bosch, ZF Group, FORVIA, and Continental (soon to be two companies once again, bucking the trend of consolidation? The industry is abuzz…). The battery technologies on display by BYD, CATL and others are - unfortunately for Europe - light-years ahead.

Any American visitor might have been impressed by the pickup-trucks on display, although tariffs will keep them out of the market, but just for a while. It’s innovation that will win the day here, as even Jim Farley admits. Here in Europe, they were - literally - only for show, as the pickup market is negligible.

There was a lot to see outside as well (I walked over 10km) - too much to go into here. Suffice it to say, a buffet for anyone hungry to learn about the movement of goods as well as people. I wouldn’t go to any transportation-related show without keeping my eyes peeled for both startups (there were a few), and for the #autonomous #mobility ecosystem. Great chats with some new friends at Torc Robotics and Innoviz Technologies about LiDar and the status of #autonomous trucking in Europe, too.

It was truly my pleasure to take to the stage to speak about #AI in #Mobility on the impressive and perpetually well-visited Scania Deutschland stand. The applications of AI are vast - along the entire value chain (design, production, sales, fleet management etc.), and given the efficiency and productivity benefits, we’ll likely see it become quickly relevant for the commercial vehicle and fleet space. The time to act is now.

Lukas is Managing Director of Neckermann Strategic Advisors, a boutique consultancy founded in 2013 with a unique focus on #mobility and #smartcities. He is an advisor to multiple investors and scale-up companies across mobility, a lecturer at Technische Universit?t Berlin, Co-Founder of intermobility, PAVE Europe, and the Urban Places Lab. He is (co-)author of several books and countless research studies on the #mobilityrevolution.