Electric and driverless cars could add up to AUD$92 billion to Australia’s economy by 2050, according to a new study by L.E.K. Consulting.
New technologies and mobility options such as car sharing (e.g., GoGet, Flexicar) and ride sharing/pooling (e.g., Uber, Lyft, Ola) are already changing the way we travel and use traditional transport modes such as taxis and private cars. Innovations such as autonomous vehicles (AVs), electric vehicles (EVs) and on-demand transport are likely to bring even more dramatic shifts.
L.E.K. Consulting has estimated the impact that EVs and AVs will have on the Australian economy by 2050.
Key findings from the report include:
- The introduction and adoption of new mobility options could increase Australia’s gross domestic product (GDP) by AUD$62 billion – AUD$92 billion by 2050, a rise of 2%-3% over projected GDP without new mobility.
- Forecasts suggest new mobility could boost employment in Australia by 200,000-274,000 full-time equivalents, or about 1%-2%.
- About half of the increase in GDP, or AUD$32 billion – AUD$ 44billion, is likely to come from improved labour force participation. As it becomes easier to get to work, the labour force participation rate could increase by about 1 percentage point by 2050 over and above a scenario without new mobility options.
- Lower vehicle accident rates will also be a key economic benefit, improving GDP by AUD$30 billion – AUD$46 billion by 2050. Improved labour productivity and lower insurance costs will account for 87%-89% of this GDP increase.
Other findings in the L.E.K. analysis include:
- The growth of EVs could see the internal combustion engine fall to as little as 17% of Australia’s car market by 2050, compared with 99% in 2017
- Robot taxis could account for 25%-45% of AVs by 2050, the largest part of the AV sector
“New mobility innovations promise a range of social and environmental advantages, making travel simpler and cheaper, reducing pollution, and cutting road accidents,” says Mark Streeting, Partner at L.E.K. and report author. “The analysis suggests there could be measurable economic benefits for Australia from consumers adopting new mobility trends and technologies”
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and rigorous analysis to help business leaders achieve practical results with real impact. The firm advises and supports global companies that are leaders in their industries — including the largest private- and public-sector organizations, private equity firms, and emerging entrepreneurial businesses. Founded in 1983, L.E.K. employs more than 1,400 professionals across the Americas, Asia-Pacific and Europe.
Credit: L.E.K. Consulting