How do digital services like subscription-based car leasing change mobility behavior in Germany?
The mobility landscape in Germany is undergoing profound changes, driven by shifting consumer behavior and the rise of innovative transportation options. These trends are transforming the fleet market and creating both challenges and opportunities that will have a broad impact on the entire mobility sector.
To explore these dynamics, we conducted a comprehensive study involving 20 experts from the mobility and fleet industries, complemented by a survey of over 1,300 consumers, in addition to a thorough analysis of existing data. The findings reveal a wide range of perspectives shaped by the diverse backgrounds and industry affiliations of the participants. Opinions on the future of mobility were often divided, highlighting the complexity and multifaceted nature of this evolving field.
This report presents key insights and offers a nuanced analysis of how emerging mobility trends are impacting the German fleet market and what this means for the broader mobility ecosystem.
Part 1 - Societal impacts of the mobility transition
Part 2 - Electrification of the mobility market
Part 3 - Connectivity and technological integration
The first part examines the key trends shaping transportation, focusing on the rise of subscription-based car leasing as a flexible alternative to traditional ownership and leasing. It also explores the influence of younger generations, particularly Millennials and Generation Z, on the demand for tech-enabled, shared mobility solutions, the need for tailored options for older adults, and the impact of remote work on driving behavior and transportation preferences. Together, these shifts challenge industry players to rethink mobility concepts, adapt to evolving consumer needs, and promote sustainability in transportation.
The trend toward subscription-based car leasing represents a profound shift in the automotive industry, driven by growing consumer demand for flexibility, affordability, and convenience. This model has the potential to reshape traditional leasing practices by 2030, particularly impacting fleet management strategies.
A key factor in the decision to choose or reject a subscription-based leasing model appears to be the user’s prior experience. The study reveals that individuals who have previously used this type of leasing are about twice as likely to be open to subscription-based leasing models compared to those who have never engaged with a leasing provider. Additionally, those with experience in subscription leasing tend to have a more realistic view of the price in comparison to purchasing or traditional leasing. Furthermore, the study shows that people who frequently use digital mobility services also have high expectations for technological innovations in mobility.
While traditional leasing has been a cornerstone of the automotive industry, the rise of subscription-based models introduces a new dynamic. These models offer users a comprehensive solution that covers various costs, such as vehicle rental, taxes, insurance, and maintenance. As awareness and understanding of subscription-based leasing grows, its acceptance increases, making it a compelling alternative to traditional leasing in the future. The impact of this shift is relevant not only for individual consumers but also for fleet management strategies, particularly in light of the potential transition of company car models to a subscription-based approach.
Younger generations, including those up to 45 years old, are driving the shift toward technology-driven, multimodal, and shared mobility options, while vehicle ownership remains relevant across all age groups.
Millennials and Generation Z are reshaping transportation with their preference for technology-driven, flexible mobility options, favoring multimodal and shared solutions. Despite their interest in multimodal mobility, most consumers still prefer vehicle ownership over leasing. This blend of traditional and modern preferences suggests that future transportation services should balance technological advancements with ownership options to meet evolving needs. Subscription-based leasing offers a promising solution, combining the benefits of ownership with the flexibility that younger generations seek. Effective communication is crucial to making this model a viable choice, particularly for those unfamiliar with leasing.
Providers must align technological advancements with ownership options to meet consumer needs. Adapting to demographic changes and the evolving mobility landscape requires a cultural shift within the industry. To overcome barriers and address fears and prejudices, effective change management and strong communication strategies are crucial.
Nina London, Partner at BearingPoint and an expert in the energy and mobility transition
With Germany’s aging population, there is an increasing demand for mobility solutions tailored to older adults. However, older generations often hesitate to embrace new modes of transportation or service offerings. This reluctance presents a significant opportunity for the industry to develop innovative solutions that cater to this growing demographic.
Remote work and digitalization have fundamentally changed driving behavior and transportation preferences.
Our study shows that employees working from home drive less frequently than those who do not. Only 43 percent of remote workers use their car daily, compared to 60 percent of those who do not work from home. Additionally, employees with the option to work from home are more likely to use bicycles, with around 50 percent riding at least once a week. Public transportation is also used more frequently by remote workers than by colleagues who do not work from home.
The trend toward remote work and flexible work arrangements is expected to persist, likely reducing the average kilometers driven per car each year. Advances in digitalization and an increasing emphasis on sustainability will support this trend. Mobility providers and urban planners must be innovative and adapt to these evolving patterns by focusing on improving infrastructure for alternative transportation methods and promoting sustainable mobility solutions.
Part 2 of the study, Electrification of the mobility market, examines the evolving dynamics of the electric vehicle (EV) market in Germany. This market has undergone significant changes due to the end of government subsidies in 2023 and the growing presence of non-European manufacturers. We explore four key points that summarize the impact of these developments:
- How subsidies and tax incentives affect EV registration numbers
- Changes in the service and maintenance market
- How improvements reduce customer barriers and reservations toward EVs
- The benefits of leasing EVs
1. How do subsidies and tax incentives affect EV registration numbers?
While the removal of subsidies for EVs has slowed the trend, it has not stopped it. Registration numbers are gradually recovering. However, this is a unique phenomenon observed only in Germany and Italy. In contrast, demand for EVs remains strong in France and Spain.
The elimination of subsidies, on the other hand, has had only a limited impact on fleet vehicle drivers compared to the potential reduction of tax benefits. Fleet profitability is crucial for companies, and favorable tax conditions are a key factor, as they provide long-term benefits for drivers, unlike one-time subsidies. Unfavorable tax conditions could lead employees to forgo company cars.
2. Changes in the service and maintenance market
Non-European EV manufacturers like NIO and BYD, which are entering the German market, face significant challenges in building their service networks. German manufacturers have a competitive advantage with their well-established service infrastructure, making it difficult for new players to compete, particularly in the private sector. Nevertheless, non-European manufacturers are actively seeking ways to establish themselves in terms of service in the German market. For example, NIO is proactively expanding its service presence in Germany, with plans to open NIO hubs in addition to service workshops featuring showrooms and community areas to improve customer engagement.
German manufacturers benefit from long-term relationships with fleet managers who value their established service networks and brand prestige. Non-European EV manufacturers need to develop strategies to overcome these challenges. One approach is to form strategic partnerships with service providers, such as Global Automotive Service (GAS). GAS operates a comprehensive, multi-brand workshop network across Europe, specializing in full-service solutions for commercial and electrified fleets.
3. How improvements reduce customer barriers and reservations toward EVs
Many fleet managers and drivers remain cautious due to perceived shortcomings in public charging infrastructure. However, important steps are being taken to address these issues. For example, the EU Parliament has passed a law requiring the expansion of charging stations along major roads, with public charging points every 60 kilometers by 2026. EU legislation also addresses payment systems, mandating the acceptance of card payments.
Technological advancements are making EVs increasingly attractive to the fleet sector. Battery improvements and faster charging speeds mean that drivers can recharge more quickly, reducing downtime. Companies are increasingly installing charging stations and reimbursing employees for private charging costs, making the switch to EVs easier. However, education is key to breaking down barriers and encouraging users to adopt these innovative technologies.
4. The benefits of leasing EVs
In recent years, private customers have dominated the German leasing market. Individuals accounted for 60% of leasing contracts, while commercial customers represented 40%. Purchasing an EV involves the significant commitment of covering the residual value at the time of resale, which carries considerable risk due to rapid developments in EV technology and the natural depreciation of EV components, such as batteries. Technological advancements can quickly render a vehicle obsolete.
Leasing, on the other hand, allows companies to test new technologies without committing to long-term ownership, which is especially important for fleet customers who value cutting-edge technology. Leasing mitigates investment risks for companies, fleet managers, and private customers by transferring the risk of low residual value to the leasing provider – costs are spread over the vehicle’s useful life. Despite the elimination of subsidies, leasing remains more attractive than purchasing due to the high upfront costs of EVs. As a result, EVs now account for about 30% of leased vehicles.
The continued expansion of charging infrastructure, steadily decreasing operating costs, and the technological leadership of electric vehicles will further accelerate acceptance, and not just in the fleet sector. Moreover, the ongoing integration of electric vehicles into fleets holds disruptive potential for transforming the entire mobility industry.
Nina London, Partner at BearingPoint and an expert in the energy and mobility transition
Part 3 of the study, Connectivity and technological integration, focuses on four major themes that highlight the changing mobility behavior:
- The integration of connectivity, i.e., the increasing interconnection of vehicles and vehicles with their environment.
- The rise of mobility as a service (MaaS).
- The critical importance of data privacy and cybersecurity.
- The potential of alternative fuels to achieve climate goals.
Each of these themes underscores the ongoing shift toward improving driver comfort, operational efficiency, and environmental sustainability. By examining these areas, we gain insights into how the automotive industry is adapting to new technologies and consumer expectations, paving the way for a connected, flexible, and eco-friendly future.
Integration of connectivity
Looking ahead, the development of vehicle connectivity promises to revolutionize electric mobility, enhancing driver comfort and operational efficiency while opening up new business opportunities such as improved digital payment options, innovative data collection and analysis methods, and smart V2G applications. Ongoing investments in technology and research will be essential to fully realize these benefits and overcome the current challenges in electric vehicle applications. The integration of connected services and innovative business models will be key to the widespread adoption and success of electric mobility solutions.
Rise of mobility as a service (MaaS)
Driven by Generation Z, the rise of MaaS is transforming fleet management with its flexible and diverse transportation options. It is uncertain whether MaaS will completely replace company cars, but it has the potential to do so by offering more flexible and cost-effective solutions. The future success of MaaS will depend on its ability to meet user needs in a cost-efficient manner, possibly replacing traditional company cars with more flexible mobility budgets.
Additionally, the successful implementation of MaaS requires a careful examination of its tax implications and reimbursement policies to ensure both financial efficiency and regulatory compliance. Addressing these issues will be critical in fostering broad acceptance and maximizing the benefits of MaaS solutions.
The importance of data privacy and cybersecurity
The evolution of vehicles into “tablets on wheels” presents unprecedented opportunities for innovation and comfort. However, data privacy and cybersecurity are necessary to protect sensitive information and ensure the resilience of the mobility sector against emerging cyber threats. We’ve found that opinions in the mobility sector regarding cybersecurity and data privacy are divided. While there is agreement that these aspects are indispensable, data privacy regulations could also limit the ability to collect and process data for maintenance and service improvements. However, it is possible to address these topics in public discourse positively and effectively.
The potential of alternative fuels
Alongside the transition to sustainable mobility, a profound cultural shift is taking place, driven by the adoption of electric vehicles, sustainable biofuels, and e-fuels. Sustainable biofuels offer a renewable alternative, although challenges remain in scaling production and making them cost-competitive. The success of sustainable mobility depends not only on adaptable investment strategies, responsive policy measures, and technological innovations but also on fostering a cultural shift toward environmental awareness and sustainable practices. It is crucial to educate and empower consumers to embrace these changes. To integrate these technologies into global energy systems and achieve ambitious climate goals, collaboration between governments, industry stakeholders, and the public is essential. The acceptance of this cultural shift and the creation of a supportive learning environment are key to transitioning to a cleaner and more resilient future of transportation.
As a component of vehicle-to-grid systems, where electric vehicles supply electricity back to the public power grid, electrically powered and sustainably used vehicles are not only part of the mobility transition but also of the energy transition. In addition to the sustainability dimension and the risks connected to cybercrime for connected cars, the use of vehicle fleets is increasingly becoming a generational issue. Mobility-as-a-service solutions address Generation Z’s changing perception and use of vehicles.
Nina London, Partner at BearingPoint and an expert in the energy and mobility transition
