With wildfires burning across the United States and temperatures reaching record highs in mainland Europe and China, climate change and sustainable business have never been so important.

As the world becomes more aware of its carbon footprint and the effect climate change has on the planet, the push towards sustainability will have a considerable impact on the future of the transportation sector.

However, the most popular transportation method in the U.S. is the car, which is used by over 243 million Americans.

The environmental impact of the transportation industry is immense—transportation produces more emissions than any other sector.

Sustainability in business is now considered a major concern for car buyers which puts OEMs under enormous pressure from customers, environmental groups and worldwide legislation to adopt sustainable practices.

What’s in store for 2024?

As EV mandates edge ever closer to becoming reality, the topic of sustainability looks set to dominate headlines and corporate agendas in 2024.

One of the most talked about technical advancements in the past year, however, has been artificial intelligence (AI). It’s highly likely that established OEMs will give AI and connected data considerable attention in 2024.

In addition to AI and data, automakers will also focus on key areas such as sustainable supply chain management, industry standardization, and perhaps most importantly, building a charging infrastructure for electric vehicles.

Here’s a look at what lies ahead for the transportation and mobility sector in 2024:

Sustainable supply chain management

When discussing sustainability in transportation, there’s no better place to begin than the supply chain.

The key to sustainable and responsible supply chain management involves incorporating ethical, environmental and social considerations throughout the entire supply chain process. As such, OEMs are aggressively policing and maintaining their own sustainability standards and those of other suppliers they work with.

For example, in Indonesia, the world’s largest producer of nickel (an essential component of electric vehicle (EV) batteries) OEMs are replanting trees to offset the environmental damage caused by nickel mining.

Meanwhile, in the context of digital business transformation, automakers are also implementing practices to minimize their negative impact on the environment. Some of these strategies include:

The takeaway

One trend seen throughout 2023, and expected to continue into 2024, is the extensive digital transformation of many automobile businesses. A key benefit of the transformation is that these businesses will share their data both internally and externally for a seamless end-to-end customer experience with sustainable practices in mind.

Data sharing is absolutely vital for ensuring that sustainability in business remains at the heart of every automaker's sustainable supply chain. It also makes sustainability more practical, governable and, crucially, more scalable. From a reputational, relationship and revenue perspective, integrating sustainability practices at an organizational level makes total sense for any entity in the auto industry.

Smart charging infrastructure

The West Coast, particularly the state of California, has arguably been the biggest driver of EV sales in North America.

Much of the growth of EVs in California has been spurred on by aggressive tailpipe regulations designed to phase out emissions, limit ICE (internal combustion engine) vehicles, and hit sustainability targets.

However, despite California’s push towards sustainability and EV adoption, its power grid is already showing signs of strain. Aging power grids, from an infrastructure perspective, are a massive obstacle to the scaling of EV adoption and EV charging implementation. For example, in 2022, an epic summer heatwave brought California’s power grid to the brink of collapse, causing the state to ask EV owners not to charge their cars because of how taxing it would be on the network.

In light of the current grid problems, there is a greater need for advanced charging infrastructure. This type of charging infrastructure can enable load balancing and give a wealth of benefits such as:

Grid stability & reliability: Improvements can be made to ensure the electricity grid remains stable by distributing the energy demand throughout the day

Demand response: Creating advanced charging infrastructure with this capability makes it possible to manage demand during peak periods (preventing blackouts or grid collapse)

The integration of renewables: Using renewable energy sources when the weather allows can help to reduce carbon emissions and promote sustainable energy use

Connected car data and the role of digital technologies in enhancing EV sustainability

While there is no definitive number, reports suggest that EVs can generate as much as 25 gigabytes an hour to over 30 terabytes daily, depending on their usage. As such, EVs are essentially computers with wheels.

Due to the wealth of data generated, connected vehicle apps are enormous data sources that can be translated into intelligence. OEMs and aftermarket providers can use this abundance of data in the future to deliver compelling connected apps that have gamification elements such as challenges, rewards and milestones to promote eco-friendly driving habits amongst consumers. OEMs can also create in-app milestones and rewards for customers who complete specific sustainability-related objectives while also collecting and analyzing vehicle performance data and energy consumption.

Looking beyond the vehicle, automakers can also leverage connected car data to enter into collaborative partnerships with dealerships to conduct eco-friendly driving workshops and promote eco-friendly driving features within the OEM's vehicles.

Recent advancements in technology, such as AI (artificial intelligence), also allow OEMs to utilize their collected data further. OEMs can use AI to provide an analytical summary of the terabytes of raw data that is collected from the car. Once the raw data has been analyzed, OEMs can use this data for a myriad of purposes, such as predicting energy usage and driving patterns to suggest when to charge a car so it has enough energy to sustain the expected journey. Additionally, automakers can use this data to improve future EVs or influence other areas, such as charging infrastructure or battery design.

Third parties harnessing that analyzed data can also use this to help with the strategic positioning of charging stations. One of the biggest remaining obstacles to EV adoption in the North American market is range anxiety; using this data can help provide more information to consumers and manufacturers regarding battery degradation and usage. Additionally, the development of longer-running batteries allows for a greater adoption of EVs.

Finally, connected car data can also be used to fuse with data coming out of an interoperable and public charging grid. The data harnessed from these grids and the EVs will also help with the smart planning required to power these charging networks. Data collected from a public charging grid would also help local governments to create a viable solution to sustain loads of users simultaneously plugging in their EVs at home.

Standardization and interoperability is a necessity

Recent EV releases have seen a decline in customer satisfaction due to poor usability from a digital infotainment perspective. Many users have felt the shift to an almost entirely touch-based display has led to the burying of features inside numerous layers of a digital menu. In the future, OEMs might consider simplifying their digital menus to ensure easy, intuitive use, or even a return to physical buttons where possible.

Besides the interface, however, one of the other sources of customer dissatisfaction with EVs is the lack of standardization and interoperability. Just as the global smartphone market is moving towards USB-C charge ports, the same needs to happen from an electronic vehicle perspective.

At present, there is an ongoing format war in the North American EV charger market. On one side, there’s the NACS charging platform, which was recently exclusively used by one manufacturer. On the other side, there is the CCS Combo 1 system, which is used by a number of automakers but has fewer readily available charging facilities. Conversely, there is a clearer picture emerging in Europe, with virtually all new electric cars having adopted the CCS Combo 2 as standard.

There are two prominent charging enterprises in North America, but a new initiative is emerging backed by some of the largest automotive manufacturers in the world (such as BMW and Honda). This initiative aims to install at least 30,000 charge points in urban and highway locations, exponentially increasing the number of charging stations throughout the country.

Standardization and interoperability in charging systems are crucial for the global expansion of EV technology. While competing to be “the only name” in EV charging seems like an attractive prospect for businesses, it limits their audience, as some markets may only have access to competing chargers. Additionally, encouraging interoperability supports progress in EV technology, as it allows businesses to share information and work together to develop new innovations.

What happens next?