The Driving Factors Of Sustainable Mobility: BM..

BMW's thinking about the future of mobility holds lessons for other companies (across industries) and all of us as consumers. When the German automaker introduced the BMW i3 -- the company's pure electric vehicle (EV) -- to the U.S. New York or Silicon Valley and rub elbows with capitalists and venture capitalists. Instead, they convened a group in a downtown D.C. White House official, a Senator (not from Michigan), a grid expert from a large American energy company, and a professor of urban planning. A quick scan of the room made clear that BMW is focused on selling an idea ecosystem as well as a car. Making an electric vehicle is a big bet for any car company. There isn't a high degree of global demand for electric vehicles and the question of power supply is a significant one that relies on lots of players. Car manufacturing is inextricably linked to politics, trade, regulations, subsidies and taxes, and mobility is a function of state and local government.

To build the ecosystem around electric vehicles, every level of government is needed, from agencies to zoning boards. The federal government's role is to look over the hill at future needs and support ubiquity and mass adoption of new technologies to serve those needs, enabling market viability and removing information asymmetry for consumers. For example, the U.S. Department of Energy helped develop an affordable lithium ion battery used in electric vehicles, and the National Highway Traffic Safety Administration (NHTSA) is responsible for those stickers that tell you how much energy your car will consume down the road. State and local governments, on the other hand, are critical partners in electric mobility because they regulate HOV policies, allocate space for parking, bus, and bike lanes, as well as bike share stations. Government at all levels cares about attracting foreign direct investment by international businesses that creates jobs for American workers. Foreign companies also bring with them the benefit of tech and knowledge spillover: technology developed in the plant and management techniques used there spread naturally across domestic industries.

When companies think in terms of decades instead of quarters, they change the way they invest resources -- seeking out an array of opportunities -- in adjacent or new markets. Transportation is a long game. Here's the thing that most car companies know about electric vehicles: the internal rate of return is not immediately compelling. What sets companies up for success is thinking up products that align with current and future trends. Apple created technologies that are embedded into our lives by first making our music more accessible to us, and then giving us tools that help us manage our lives more efficiently. That's how you achieve super-long growth streaks. Currently the sharing economy is taking hold with early-adopter types in urban centers. While it's not yet hitting the bottom line of most legacy brands, it may do so soon. BMW i is starting to play in this space, imagining ways its cars can facilitate car-sharing.

Its executives note that they see this as a way to serve a new segment of consumers (e.g., former non-drivers). Mega-trends are those that hit broadly, and they affect the multiple facets of our lives. One that BMW is banking on is mass urbanization, which will affect most of the world's population in the coming decades. The question for all companies becomes, how does that trend let you play from strength? How do you build your company's strategy around it? For car makers, what's key is that there is an inherent antagonism between city culture and cars. New forms of infrastructure are needed to support burgeoning populations, and new types of transportation solutions will crop up. Cars may not be as big a part of an evolving urban landscape, but their relevance isn't diminished when one considers that developed economies have aging populations. In terms of the urban landscape, gas stations are a terrible use of urban space.

So, car companies are smart to ask: how does it become more convenient to charge than pump gas? Similarly, looking for parking uses up too much energy (both in terms of gas and personal productivity), and car companies must offer solutions or risk being left behind, particularly if drivers are older and less mobile. BMW assumes time, space, and energy are all constrained under the mass urbanization scenario. The company's manufacturing centers are powered by a mix of wind, solar, methane and conventional energy sources, and the i3 contains post-consumer recycled materials. Additionally, the car helps drivers find charging stations, parking, and even enables car-sharing for occasional drivers. Finally, the company reuses batteries when upgrades become available to car owners, using them to collect and store energy generated from solar arrays, reducing the cost of recycling batteries by extending their useful lives. Beyond government, companies that are investing in inherently risky propositions like electric vehicles should look across industry lines for potential partners. Since electric car makers must ensure that supply is there to meet demand, energy companies and utilities are obvious picks. But there are also opportunities for adjacent industries. For example, anyone who owns parking lot space can generate revenues by providing charging stations (e.g., sports teams with under-utilized complexes). Platforms like eBay can enable personal charging station rentals. These new ways of thinking can turn a depreciating asset into one that generates revenues. Thus, a recharging industry rises. So, while the barriers to entry for electric vehicles remain high, companies that start us down the road of thinking differently about mobility are doing us all a favor -- even their competitors. This is no "I drink your milkshake" scenario; what BMW builds and cultivates in the U.S.