Last week, I reflected on the year ahead. I explored predictions for 2025 in my blog, 2025: A Year of Transition for the UK Economy, Automotive Sector, and Private Capital - Cambria Private Capital. While staying grounded in short-term opportunities is essential, it’s equally important to consider how larger, long-term megatrends will shape our industries and investment strategies. This week, my focus turned to Roland Berger’s Trend Compendium 2050, a fascinating exploration of six megatrends set to define the global landscape for decades.

Breaking Down the Megatrends

Among the six megatrends—from societal shifts to health innovations—the “Economics & Business” megatrend is particularly relevant to mobility. This encompasses three core themes:

1. Global Debt Challenges: High debt levels constrain global growth and corporate investment opportunities.

2. Energy Transformation: The shift to renewable energy sources reshapes industries, especially transport.

3. Power Shifts: Developing economies are gaining influence, driven by rising GDP, trade activity, and technological catch-up.

These macro trends are not abstract; they’re actively shaping industries like automotive, logistics, and mobility through specific mechanisms such as trade policies, FDI flows, and localised production strategies.

The Mobility Lens: Megatrends in Action

Let’s critically examine how these megatrends influence our sector and evaluate their immediate implications.

1. Sustainability and the Energy Transformation

The global shift towards decarbonisation is evident in the growing investment in electric vehicles (EVs), batteries, and renewable energy infrastructure. Roland Berger highlights a 400% surge in greenfield projects focused on EV and battery production from 2016 to 2023. This growth is vital for reducing emissions, but it comes with significant hurdles, such as supply chain bottlenecks for critical minerals and rising geopolitical tensions over resource access.

Short-term impact: The race to electrify fleets and develop energy-efficient supply chains will demand substantial capital and innovation. Companies that can navigate resource scarcity through partnerships or technological breakthroughs will thrive, while those lagging behind risk becoming obsolete.

2. AI-Driven Digitalisation

Roland Berger identifies digitalisation as a driver of supply chain reinvention, with AI enabling automation and optimisation on an unimaginable scale. However, as businesses adopt these technologies, fragmentation across supply chains and the need for interoperability remain significant challenges.

Our take: AI's promise lies in reducing costs and unlocking new business models. For example, predictive analytics can enable granular insights into fleet management, while AI-driven platforms simplify the deployment of energy solutions at scale. However, affordability and user-friendliness will determine adoption rates for small and medium enterprises.

Short-term impact: We expect to see incremental improvements in efficiency and visibility across supply chains, but the full potential of digitalisation will hinge on collaboration between industries and governments to standardise frameworks.

3. Regionalisation of Supply Chains

The shift from globalisation to regionalisation - what Roland Berger calls “globalisation” - is one of the most profound changes in global trade. Geopolitical tensions, protectionist policies, and the desire for resilient supply chains drive this trend. As nations prioritise “friend-shoring” or reshoring, multinational corporations are redesigning production strategies to mitigate risks.

Our take: In mobility, this shift is already evident. Vehicle manufacturing increasingly focuses on regional hubs to reduce reliance on volatile supply chains. However, the cost implications of this localisation strategy are significant and could challenge short-term profitability.

 Short-term impact: Companies will face higher costs as they regionalise their operations, but those investing in automation and advanced manufacturing technologies will likely offset these pressures through increased efficiency.

Measuring the Immediate Against the Long-Term

While Roland Berger’s analysis offers a roadmap to 2050, these megatrends are already influencing the mobility sector today:

• Sustainability efforts are catalysing growth in EV adoption, but the reliance on scarce resources like lithium and cobalt could create bottlenecks and price volatility.

• AI and digitalisation are streamlining logistics and manufacturing, yet small players may struggle to adopt these technologies without significant cost reductions or external support.

• Regionalisation strategies are improving supply chain resilience but come with trade-offs, including higher operational costs and reduced global interconnectivity.

 Balancing Vision with Execution

Roland Berger's long-term megatrends are not abstract ideas; they are active forces shaping businesses' decisions. The challenge for investors and operators alike is to balance these visionary trends with immediate, practical steps. Those who align their short-term strategies with these broader forces will be well-positioned to navigate an increasingly complex and dynamic landscape.

As we move into 2025, it’s essential to consider these megatrends while remaining nimble enough to adapt to their challenges and opportunities. Have a great week!