Investment Rating - The report emphasizes the critical need for organizations to optimize fleet management to enhance efficiency and sustainability, indicating a positive outlook for investment in this area [31]. Core Insights - Organizations are increasingly recognizing the importance of proactive fleet management due to rising costs, complexity, and sustainability demands, particularly as they transition to electric vehicles (EVs) [1][5]. - A four-step framework is proposed to transform fleet management, focusing on digitization, transparency, and balancing supply and demand [6][9]. - The report identifies seven key challenges in fleet management, including lack of transparency, poor utilization, and high maintenance costs [3][5]. Summary by Sections Understanding the Fleet Management Landscape - Organizations across various sectors depend on fleets for effective operations, yet there is little transparency regarding internal maintenance costs and fleet management is often decentralized [3][5]. - The complexity of managing diverse vehicle types and the lack of a corporate overview of needs lead to inefficiencies and higher costs [3][5]. Transforming Fleet Management - A balanced, digital, and proactive approach is necessary to improve operational efficiency and reduce costs while meeting decarbonization objectives [5][6]. - The four steps to transformation include assessing the status quo, analyzing current usage, understanding actual demand, and rightsizing the fleet [9][16]. Digital Fleet Management Solutions - Digital tools facilitate end-to-end fleet management, enabling real-time data collection on vehicle usage and maintenance needs [12][13]. - A centralized digital system enhances transparency and efficiency, allowing for better decision-making and resource allocation [12][13]. Benefits of Optimized Fleets - Optimizing fleet size and management can lead to significant cost reductions, rejuvenation of the fleet, sustainability improvements, and stronger digital governance [25][28]. - Potential savings include a 15%-25% reduction in fleet size and 10%-20% total cost savings through better management practices [31][32]. Best Practices for Implementation - Successful fleet management transformation requires senior-level support, a pragmatic approach, digitalization of operations, and a focus on cultural change [32][34]. - Organizations should adopt a phased approach to change management to ensure buy-in from all departments [35][36]. Conclusion - The urgency to increase efficiency and decarbonize transport is driving organizations to prioritize fleet management optimization [37]. - Key actions include understanding current fleet data, rightsizing assets, implementing pooling strategies, and enhancing governance processes [37][38].

ARTHUR LITTLE REPOR 2024 THE INSIGHT: STATE OF THE EUROPEAN PRIVATE EQUITY INDUSTRY Green shoots visible as AI rises rapidly 5" edition IN PARTNERSHIP WITH: INVEST | --- | --- | --- | --- | |-------|-----------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Investment Rating - The report does not explicitly state an investment rating for the industry but emphasizes the growth potential of Chinese OEMs in the global electric vehicle (EV) market. Core Insights - The Chinese passenger vehicle market has been the largest globally since 2009, with a CAGR of 7%, reaching 26 million vehicles sold in 2023. EVs accounted for 35% of passenger vehicle sales in 2023, and this share is expected to grow significantly in the coming years [5][21][22]. - Chinese OEMs are expected to experience faster sales growth than the overall market in all global regions by 2030, particularly in Europe (+14% annually) and Southeast Asia (+15% annually) [5][33]. - The internationalization of Chinese OEMs is driven by political and economic factors, including electrification goals and the leveling off of the Chinese economy, prompting a focus on export activities [3][25]. Summary by Sections 1. China's Passenger Vehicle Industry - China became the largest passenger vehicle market in 2009, with 27 million vehicles sold in 2023, including both internal combustion engine (ICE) and EVs [20][21]. - EV sales have surged, with hybrid vehicle sales increasing by 360% and battery electric vehicle (BEV) sales rising by 129% since 2021 [21][22]. - By 2025, it is projected that every second new car in China will be either full electric or hybrid, with EVs expected to capture around 70% market share by 2030 [22]. 2. Global Perspectives on Chinese OEMs - A survey of over 15,000 respondents revealed that 58% of potential buyers consider a Chinese EV a viable option, with interest levels varying significantly by region [48][49]. - In Southeast Asia, interest in Chinese EVs is notably high at 73%, while in Europe and North America, interest is lower at 41% and 32%, respectively [48][49]. 3. Recommendations for Market Players - Incumbent OEMs in Europe and North America should emphasize brand reputation and quality to compete with Chinese manufacturers [14][15]. - Chinese OEMs should focus on building a trusted dealer network and adapting their go-to-market strategies to meet diverse customer needs across different regions [16][17]. - Distributors and dealer groups are encouraged to partner with Chinese OEMs while conducting thorough due diligence to identify potential winners in the market [16][17]. 4. Categorization of Chinese OEMs - The report categorizes Chinese OEMs into three main types: EV start-ups, incumbents with a history of international joint ventures, and domestic market incumbents [6][7][8]. - EV start-ups focus on premium segments and advanced technologies, while incumbents aim for a diverse product portfolio to capture both domestic and international markets [6][7][8]. 5. Market Share Projections - Chinese OEMs are expected to capture significant market shares in various regions by 2030, with projections of 8%-10% in Europe and 6%-8% in Southeast Asia [35][36][46]. - In North America and Japan, growth is expected to be slower, with market shares remaining below 5% [37][38].

Investment Rating - The report does not explicitly provide an investment rating for the telecommunications industry or communications service providers (CSPs) Core Insights - The current segmentation strategy used by most CSPs is outdated and hinders their ability to capture value from the growing ICT market [4][5][33] - CSPs can succeed in the ICT space without becoming systems integrators by adopting a more effective segmentation approach focused on place type rather than size or industry [33][34] Summary by Sections Current Market Dynamics - The ICT services market is experiencing growth, but many CSPs struggle to extract value due to ineffective B2B customer segmentation [3][4] - CSPs have not achieved significant value from ICT, with many emulating system integrators with limited success [5][6] Segmentation Challenges - Traditional size-based segmentation fails to provide insights into service portfolios and does not address decision-makers' needs for CAPEX-to-OPEX shifts [9][10] - Vertical segmentation is inadequate as it does not account for the specific needs of different niches within industries [12][13] Proposed Segmentation Strategy - A new segmentation approach based on "place type" is recommended, allowing CSPs to identify and address opportunities that align with their strengths in connectivity [17][20] - This approach emphasizes commonality in connectivity requirements and use cases across similar places, leading to more effective marketing and service delivery [22][23] Case Studies and Examples - Telstra's partnership with the Australian Football League demonstrates the successful application of place-based segmentation, providing tailored digital solutions for stadiums [20][21] - A European incumbent showcased a canvas of opportunities for a manufacturing company, focusing on increasing labor, equipment, and material efficiency through connectivity solutions [28][29] Conclusion - CSPs can enhance their profitability and market position by shifting away from outdated segmentation methods and focusing on local, place-related opportunities that leverage their connectivity capabilities [33][34]

Investment Rating - The report does not explicitly provide an investment rating for the aluminum industry Core Insights - Global aluminum consumption is projected to reach 124 million tons by 2030, growing at over 3% per year, driven by sectors such as transportation, electrical, and consumer durables [4][11] - The aluminum industry faces significant environmental challenges, being the most energy-intensive metal with CO2 emissions around 15 tons per ton produced [4][5] - The Gulf Cooperation Council (GCC) is positioned to lead the transition to low-carbon aluminum production due to its abundant energy resources and innovative capabilities [14][37] Summary by Sections Industry Overview - Aluminum is a versatile material used across various sectors, with increasing global demand necessitating a shift towards sustainable practices [3][11] - The industry must address its environmental impact, particularly in the energy-intensive smelting process, which contributes significantly to CO2 emissions [5][10] Demand and Growth - An additional 16 million tons of green aluminum demand is expected globally over the next decade, primarily driven by hybrid and electric vehicles [11][34] - The GCC's aluminum production is expected to grow, with the region producing over 6 million tons in 2023, making it a key player outside of China [14][15] Technological Innovations - The report highlights the importance of technological advancements in reducing emissions, including the adoption of renewable energy, carbon capture, and inert anode technology [22][23] - Innovations in recycling and the development of a circular economy are crucial for sustainable aluminum production [30][31] Market Potential - The global aluminum market is anticipated to remain a solid investment frontier, with potential for green premiums to rise as consumer demand for sustainable products increases [33][34] - The GCC's strategic focus on diversifying its economy away from fossil fuels aligns with the growing demand for aluminum, presenting investment opportunities [35][37] Conclusion - The GCC is well-positioned to lead the transition to a sustainable aluminum future by focusing on emission reductions, technological advancements, recycling, and market development [37]

Investment Rating - The report emphasizes the importance of implementing effective internal carbon pricing (ICP) as a strategic approach for organizations to manage their carbon emissions and align with decarbonization goals, indicating a positive investment outlook for companies adopting these practices. Core Insights - Organizations face increasing pressure from regulators, consumers, and investors to monitor and reduce greenhouse gas (GHG) emissions, with 75 carbon pricing initiatives covering 24% of global GHG emissions as of 2024 [3][4] - Effective internal carbon pricing can enhance decision-making and incentivize sustainable practices, yet many companies only apply it marginally rather than as a core strategy [5][6] - A comprehensive, data-driven approach to ICP is essential for managing emissions across all scopes (1, 2, and 3) and requires collaboration across various corporate functions [6][19] Summary by Sections Regulatory and Market Drivers - Regulatory mechanisms, such as carbon taxes and cap-and-trade systems, are pushing companies to manage GHG emissions more effectively [7][8] - Market pressures from consumers and investors are also driving organizations to adopt better emissions management practices [8][9] Implementation of Internal Carbon Pricing - Companies should start by implementing ICP in a phased manner, beginning with major capital investments and gradually expanding to cover all material emissions [30][32] - The internal carbon price should be set based on factors such as the social cost of carbon, expected regulatory changes, and industry benchmarks [24][25][26] Case Studies and Examples - Swiss Re has set an internal carbon price that increased from $8/tCO2e in 2019 to $123/tCO2e in 2023, generating approximately $3.4 million for carbon removal initiatives [22][23] - Teijin expanded its ICP to include Scope 3 emissions and doubled its carbon price from €50/tCO2 to €100/tCO2 in 2023 [28] Strategic Recommendations - Organizations should involve all key corporate functions in the ICP process to ensure alignment and effectiveness [19] - Establishing a clear framework for how carbon pricing impacts financial metrics and decision-making is crucial for successful implementation [38][39]

Industry Investment Rating - The report does not explicitly provide an industry investment rating [1][2][3] Core Viewpoints - Businesses must adapt to climate change alongside mitigation efforts, as adaptation is crucial for sustainability and resilience [3] - Adaptation strategies are complex due to fragmented technologies, industry-specific solutions, and low funding (less than 10% of climate tech funding in 2020-2021) [4] - Future uncertainties, such as regulations, consumer behavior, and competitive dynamics, significantly impact adaptation strategies [5] Key Business Functions for Adaptation 1. Source: Securing Raw Materials and Supply Chains - Climate change impacts raw material availability and supply chains, such as reduced agricultural yields and disruptions from severe weather events (e.g., drought affecting the Panama Canal in 2023) [7] - Companies must enhance supply chain resilience to mitigate disruptions [8] 2. Make: Adapting Manufacturing Processes - Energy and water shortages, grid instability, and extreme working conditions (e.g., heat) will affect manufacturing processes [9] - Solutions like water treatment, recycling, and desalination are critical for maintaining production quality and continuity [9] 3. Protect: Safeguarding Industrial Sites and Assets - Companies need better prediction capabilities, physical protection measures, and rapid response systems to guard against floods, storms, and sea level rise [10] - Relocation of assets from high-risk areas (e.g., parts of China, Vietnam, and Bangladesh) may be necessary [10] 4. Sell: Marketing Competitive Goods and Services - Climate change will alter consumer needs, creating opportunities for new products (e.g., Michelin's inflatable sun protection solutions) [11] - Companies must adapt to changing consumer behaviors and prioritize circularity and sustainable consumption [11] Future Projections and Uncertainties - The study identifies 11 shaping factors across geophysical, biological, behavioral, and economic categories that influence adaptation strategies [13][14] - Four critical uncertainties include regulations, consumer behavior, financial mechanisms, and competitive pressure [17] - Five plausible future projections include Green Communities, Lonely at the Top, Wild Green West, Don't Look Up, and Adaptation Surge [18][19][20] No-Regret Technologies and Solutions - No-regret solutions include advanced warning systems, thermal comfort systems, GIS, drones, robots, and water efficiency systems [26] - Key enabling technologies include IoT, deep neural networks, and simulation via generative AI [26][27] - Complex system modeling will become increasingly important for adaptation strategies [28] Strategic Recommendations - Companies should act now, as adaptation solutions require long lead times and early movers can gain competitive advantages [30][31] - Key steps include predicting risks, deciding on governance, mobilizing funding, and building local ecosystems of partners [31][32][33][34] - Adaptation strategy will become inseparable from business strategy by 2040 and beyond [34]

Industry Investment Rating - The report does not explicitly provide an investment rating for the industry [1][2][3] Core Viewpoints - The circular economy, particularly in lithium-ion battery recycling, is essential for the green transition but faces profitability challenges [3] - Global demand for lithium-ion batteries is expected to grow significantly, from 1 TWh in 2023 to 5 TWh by 2030 and 7 TWh by 2035 [4] - Recycling end-of-life lithium-ion batteries presents a significant opportunity to combine sustainability and profitability, though current business models in Europe are not economically viable [6] - The EU Commission estimates that global demand for active battery materials such as lithium, graphite, and nickel will double between 2025 and 2030 [4] - Over three-quarters (77%) of experts agree that recycling end-of-life lithium-ion batteries in Europe is currently not economically viable [6] Industry Overview - Lithium-ion batteries are central to decarbonization, powering electric vehicles (EVs) and renewable energy storage [4] - Battery production relies on metals like lithium, manganese, cobalt, and nickel, which generate significant ESG risks and carbon footprints during mining and processing [4] - The EU Commission forecasts that the global demand for active battery materials will double between 2025 and 2030, with a dramatic increase in material demand after 2030 [4] - The availability of spent batteries for recycling will remain limited in the next decade, with Europe expected to have less than 1 million metric tons of material available for recycling before 2035 [4] Recycling Process and Challenges - The lithium-ion battery recycling process involves three stages: reverse logistics, pre-treatment, and materials recovery [12] - Current recycling business models in Europe are not profitable due to high CAPEX investments, low volumes, immature technology, volatile raw material prices, and scaling difficulties [6] - The biggest obstacle to recycling in Europe is the cost of establishing and running hydrometallurgy facilities, as highlighted by 66% of experts [16] - Battery transportation is a significant challenge due to stringent safety regulations, high costs, and lack of transparency around battery conditions [17] - Site selection and permit acquisition for hydrometallurgical facilities are complex and time-consuming, with varying regulations between countries [19] Regulatory Landscape - Regulations around battery recycling and sourcing rare materials vary worldwide but show an overall trend toward stricter standards [9] - The EU's 2023 Battery Regulation aims to establish a closed-loop battery value chain, with targets for increasing recycling rates of specific materials [9] - In the US, there is no overarching requirement for battery recycling, but initiatives like the Department of Energy's Lithium-Ion Recycling Prize promote recycling practices [10] Future Business Models - By 2030–2035, end-of-life volumes from EVs in Europe are expected to overtake production scrap, enabling new business models where vehicle OEMs or battery manufacturers retain ownership of battery materials [13] - In Asia, large-scale hydrometallurgy facilities have been established, enabling more economical operations and higher prices for black mass compared to Europe [14] Recommendations for Profitability - Adopt a hub-and-spoke model for logistics to reduce transportation costs and improve safety [25] - Innovate in technology and processing to reduce costs and increase profitability [29] - Use machine learning and AI to optimize recycling operations and improve decision-making [31] - Leverage economies of scale to achieve higher profitability, as demonstrated by Asian recyclers [34] Insights for the Industry - Building partnerships across ecosystems is vital for stabilizing supply and demand in the battery recycling industry [36] - Early planning and investment are crucial for gaining a leadership position as recycling volumes increase [37] - Monitoring regulatory changes and potential subsidies can help underpin investment in recycling businesses [37] - AI can provide a competitive advantage by enabling better demand and material price predictions [38]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights the slow progress towards sustainable mobility despite technological advancements, with only a modest increase in the share of sustainable transport modes from 57% to 65% over 15 years, while 70% of citizens still rely on private cars for daily commutes [4][6][7] - A comprehensive approach involving funding, governance, and the implementation of high-impact solutions could potentially double the global share of sustainable mobility from approximately 30-60% of passenger kilometers within the next decade [10] - The report emphasizes the need for integrated policies that combine electrification with modal shift and transport demand reduction to effectively mitigate climate change [12][13] Summary by Sections Mobility Vision and Policy - Significant progress has been made in developing long-term mobility visions and policies, particularly in Europe, through sustainable urban mobility plans (SUMPs) [11] - Challenges remain in adopting integrated policies that effectively address climate change and achieve net-zero targets [12] Key Levers for Achieving Net Zero in Transport - The report identifies three key levers: transport demand reduction, modal shift to less energy-intensive mobility modes, and decarbonization through electrification [13][14] City of Proximity Concepts - The "city of proximity" concept aims to reshape urban spaces to promote sustainable mobility, with successful implementations observed in cities like Paris and Copenhagen [16][17] Mobility Supply - Authorities are encouraged to develop multimodal master plans and prioritize transport services based on performance and affordability [19] New Mobility - Micromobility services, such as e-scooters and e-bikes, show high demand and are often used in conjunction with public transport [21] - The report stresses the importance of fostering partnerships with new mobility service providers to enhance the overall mobility ecosystem [21] Smart Mobility - Technological innovation is crucial for creating a more virtuous mobility system, but it must be guided to address genuine needs [22] Mobility as a Service (MaaS) - The MaaS concept has not yet fulfilled its potential, with less than 5% adoption among the target audience, indicating a need for evolution beyond a technology-centric approach [24] Autonomous Mobility - The report discusses the slow progress of autonomous vehicle technology and emphasizes the need for integrated mobility systems rather than isolated vehicle solutions [25] Mobility Demand Management - Effective demand management strategies are essential, as only 30% of potential readiness to abandon personal cars is influenced by alternative mobility services [27][28] Rethinking the Mobility Funding Equation - Significant investment is required to expand mass transit and transition to net-zero, necessitating new funding sources and enhanced expenditure efficiency [29][30] Overall Conclusions - The report concludes that while the potential for transformation exists, significant challenges remain in implementation, requiring system-level coordination and collaboration among stakeholders [32][33][35]

Investment Rating - The report does not explicitly state an investment rating for the steel industry but emphasizes the growing importance of scrap steel as a critical resource in the transition to greener steel production methods. Core Insights - The steel industry is under pressure to decarbonize, with a focus on reducing CO2 emissions by transitioning from traditional blast furnaces to Direct Reduced Iron (DRI) and Electric Arc Furnaces (EAF) [2][6][9] - The demand for steel is projected to rise, making the decarbonization of steel production essential for achieving sustainability goals [2][5] - The scarcity of clean scrap steel is expected to drive prices higher, highlighting the need for steelmakers to secure sufficient scrap supplies [3][24] Summary by Sections Industry Overview - Steel production accounts for approximately 7% of global CO2 emissions, necessitating urgent action to reduce its carbon footprint [4][6] - The European Union aims to cut CO2 emissions from steel production by nearly 25% by 2030, reflecting regulatory pressures on the industry [2][6] Technological Transition - The shift from blast furnaces to DRI and EAF technologies is crucial for reducing emissions, but it requires significant investments and a reliable supply of competitively priced green energy and scrap steel [3][10][12] - EAF technology is mature, while DRI technology is still developing, with no large-scale hydrogen-powered DRI facilities yet operational [14][15] Scrap Steel Market Dynamics - The report highlights the increasing global competition for scrap steel, particularly clean scrap, as demand grows due to the transition to EAFs [5][24] - In Europe, an estimated annual shortage of 9 million tons of scrap is projected by 2030, which will likely increase prices and competition for supplies [24][25] Investment and Economic Considerations - Meeting the EU's 2030 targets requires an estimated €85 billion in investments, with significant reliance on state subsidies to fund new green steel projects [15][16] - The cost of processing scrap steel is competitive compared to DRI processes, making it an economically viable option for steel production [22][24] Strategic Recommendations - Steel producers are encouraged to build ecosystems and circular economies to secure scrap supplies through partnerships and acquisitions [34][35] - Companies should explore global sourcing for cost-effective scrap, particularly from regions like Africa and Latin America, to meet growing demand [34][35]