SINGAPORE (Sept 3): For nearly three weeks in August, the drama of electric car and energy storage firm -Tesla going private had dominated the business headlines. Did maverick CEO Elon Musk really have the “funding secured” as he claimed in his tweet? Or was it just a tactic to throw Tesla short sellers off balance? On Aug 24, Musk made another sharp U-turn, declaring he had decided to keep Tesla as a publicly listed firm because that was what most shareholders wanted. On Aug 27, -Toyota Motor announced it would take a US$500 million ($682.8 million) stake in ride-hailing giant Uber. The Japanese auto colossus, which has lagged behind other companies in electric, autonomous and connected cars, already has a US$1 billion stake in Southeast Asian ride-hailing firm Grab.
What do Tesla’s travails and Toyota’s investments in Uber have in common? Think “Mobility as a Service” or MaaS. It is not about selling cars anymore but increasingly, about selling a subscription service, to move people from one place to another. Nomura estimates the total addressable MaaS market to be US$400 billion to US$600 billion by 2025.
To be sure, the auto industry is undergoing a dramatic transformation that has upended its traditional business model of designing, branding, manufacturing and selling cars. Indeed, sales of passenger cars worldwide, which peaked at about 100 million units a few years ago, have been declining. In North America, the number of young people with a driving licence — long a rite of passage — has fallen to its lowest level in almost three decades. Young North Americans are happy to pedal, take public transport or Uber around instead of buying their own car.