Automotive & Assembly Practice How batteries will drive the zero-emission truck transition Battery electric vehicle technology will be key to reducing road freight emissions and achieving global climate targets. by Jakob Fleischmann with Lena Bell and Patrick Kroyer Road freight vehicles1 account for a significant share of global CO2 emissions. Hence, minimizing their carbon footprint is a vital step toward achieving global climate targets. Over the past decade, governments, fleet operators, and truck OEMs ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The industry is undergoing a transformation driven by generative AI (gen AI), which is reshaping talent strategies and software development processes [2][5] - Companies that effectively leverage gen AI can significantly enhance productivity, with reported improvements of up to 40% in product management and 30-40% in software development [4][10] - The current adoption of gen AI in software engineering is limited, with only 13% of companies using it systematically, indicating a substantial opportunity for growth [4][5] Summary by Sections Talent Strategy - Companies need to rethink their talent strategies by focusing on skills rather than traditional roles to adapt to the evolving demands of software development [2][5] - The skills required for software engineers and product managers are changing, necessitating a shift towards higher-value skills such as user story development and effective communication [11][12] Generative AI Impact - Gen AI is expected to impact every phase of the product development life cycle (PDLC), improving efficiency in tasks such as requirement definition, coding, testing, and documentation [6][10] - The technology is particularly effective in content-heavy tasks, suggesting that its integration can lead to faster development cycles and improved code quality [6][10] Skills Development - A strategic workforce plan centered around skills is essential for companies to identify and nurture the talent needed for future success [15][18] - Companies should treat skills as data, enabling the use of AI to analyze and prioritize skill development needs [16][18] Apprenticeship and Upskilling - Developing apprenticeship capabilities is crucial for effective upskilling, allowing employees to learn through hands-on experience and mentorship [19][22] - Companies should create incentives for participation in apprenticeship programs, integrating them into performance evaluations to ensure success [22] Leadership and Oversight - Leadership must focus on standardizing skills and capabilities across the organization to manage the integration of gen AI effectively [13][14] - Clear guidelines and expectations regarding the use of gen AI are necessary to mitigate risks and ensure responsible adoption [13][14]

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Automotive & Assembly Practice Truck as a service: The next step en route to zero-emission fleets Commercial vehicle decarbonization requires changes to the ways fleet trucks are financed and serviced. The truck-as-a-service model is the next logical step toward zero-emission trucking. by Anna Herlt and Tobias Schneiderbauer with Eric Morden and Lena Bell Today, more than 95 percent of trucks on the road around the world run on diesel or gasoline.1 The traditional truck ownership model of combining purchasi ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The transition to zero-emission trucks is hindered by significant challenges, including the need for infrastructure investment, regulatory compliance, and the development of new powertrains [2][3][11] - Regulatory interventions are driving the shift towards zero-emission trucks, with the European Union and North America implementing stringent targets and subsidy programs to facilitate this transition [3][5][7] - The market for zero-emission trucks is expected to grow significantly, with projections indicating that by 2035, zero-emission trucks could account for approximately 20% of truck-related value and profit pools, amounting to around $140 billion [25][36] Summary by Sections Regulatory Landscape - The European Union mandates a 43% reduction in emissions for new medium- and heavy-duty trucks (MHDT) by 2030 and 90% by 2040, with substantial fines for noncompliance [5][7] - In the United States, the Environmental Protection Agency has set targets for zero-emission trucks to account for 25% to 60% of new annual sales by 2032, with California aiming for stricter targets [5][7] Infrastructure Challenges - The report estimates that charging infrastructure alone will require investments of $30 billion by 2035 and $60 billion by 2040 in the U.S. and Europe [18] - A significant portion of these investments is yet to be committed, creating a risk-averse environment for infrastructure players [18][19] OEMs and Suppliers - Original Equipment Manufacturers (OEMs) must develop a comprehensive zero-emission vehicle portfolio and scale up production capacities while reducing product costs, which currently have a total cost of ownership (TCO) disadvantage of up to 40% compared to traditional trucks [12][13][32] - Cost reductions of over 50% for fuel-cell systems and achieving battery costs of around $105 per kilowatt-hour are essential for competitive pricing [13][32] Market Dynamics - The shift to zero-emission trucks will disrupt the existing supply chain, requiring new sourcing strategies and partnerships to accommodate the demand for batteries and fuel cells [17][29] - The aftermarket is projected to grow, with potential profits reaching $17 billion to $18 billion by 2035, driven by an increase in the overall vehicle parc [31] Customer Considerations - Small fleets dominate the European market, and many operators are hesitant to transition to zero-emission trucks due to concerns about costs, reliability, and operational fit [20][21] - Fleet operators need to assess their driving patterns and infrastructure requirements to optimize their transition to zero-emission vehicles [21][22] Future Opportunities - By 2035, the truck industry value pools in the U.S. and EU are expected to surpass $680 billion, with zero-emission trucks capturing a significant share of this market [25][36] - New business models, including financing and data-enabled services, are anticipated to emerge as key profit pools in the zero-emission truck ecosystem [34][35]

Investment Rating - The report does not explicitly provide an investment rating for the healthcare delivery sector Core Insights - Organizational health is a critical differentiator in the care delivery sector, linked to value creation, profitability, resilience, and safety metrics [3][14] - There has been a significant decline in organizational health in North American care delivery organizations, with an 11 percentage point drop from 2014-2018 to 2019-2023, contrasting with a 3 percentage point increase globally [13][15] - Key factors affecting organizational health include employee motivation, work environment, and external orientation, which are correlated with patient satisfaction [9][12] Summary by Sections Organizational Health Index (OHI) - The OHI measures critical elements of high-performing cultures across nine dimensions, based on surveys from over 2,500 organizations [5][6] - The index shows a decline in organizational health in the care delivery sector, with specific management practices linked to this decline [12][19] Declines in Organizational Health - The report highlights a decrease in organizational health scores, with significant declines in motivation-related practices such as career opportunities and rewards [20][21] - The decline in organizational health is attributed to broader industry trends and the lasting impacts of the COVID-19 pandemic [18][23] Management Practices and Opportunities - Organizations are encouraged to focus on management practices that enhance work environment, external orientation, and motivation to improve overall health [24][30] - Specific practices that have seen declines include performance transparency, customer orientation, and recognition of employee contributions [20][21] Cultural Transformation - The report suggests a two-speed approach to cultural transformation: quick wins and a more sustainable, long-term strategy [24][32] - Organizations should engage staff in shaping cultural practices and prioritize transparency and accountability to improve organizational health [36][30]

Industry Investment Rating - The report highlights a significant opportunity for banks, insurers, multi-family offices (MFOs), asset managers, and WealthTechs to serve the growing number of family offices in Hong Kong and Singapore, driven by an estimated $5.8 trillion intergenerational wealth transfer in the Asia–Pacific region by 2030 [4][6] Core Viewpoints - The Asia–Pacific region is experiencing a family office boom, with the number of single-family offices in Hong Kong and Singapore quadrupling since 2020 to approximately 4,000 [4] - Ultra-high-net-worth (UHNW) families are expected to account for about 60% of the total wealth transfer, with UHNW and high-net-worth (HNW) families increasingly setting up family offices to manage their wealth [4][6] - The growth of family offices presents opportunities for financial service providers to offer differentiated services, including estate planning, investments, philanthropy, and tax management [4] - Hong Kong and Singapore are key hubs for family offices in the Asia–Pacific region, accounting for approximately 15% of the world's single-family offices, supported by tax benefits, clear regulations, and mature financial ecosystems [12][13] Industry Analysis Wealth Transfer and Family Office Growth - Between 2023 and 2030, UHNW and HNW families in the Asia–Pacific region are expected to transfer $5.8 trillion in wealth, with UHNW families accounting for 60% of this transfer [4][6] - The number of single-family offices in Hong Kong and Singapore has quadrupled since 2020, reaching approximately 4,000, driven by the need to manage intergenerational wealth transfers [4] Key Differences Between Asia–Pacific and Western Family Offices - Family offices in Asia–Pacific are less professionalized compared to their Western counterparts, with only about 5% of UHNW households having single-family offices, compared to over 15% in Europe and North America [10] - Wealthy families in Asia–Pacific prefer single-family offices for tighter control over their wealth, while Western families are more open to multi-family offices for cost efficiency [10] - Asian family offices show a rising interest in alternative investments, with about 30% allocated to alternatives, compared to 50% in Europe [10] Hong Kong and Singapore as Family Office Hubs - Hong Kong and Singapore manage approximately $1.3 trillion each in offshore assets, making them key players in the global financial ecosystem [13] - Wealth flowing into these hubs primarily comes from mainland China, India, and Indonesia, with increasing interest from Europe and North America as Asia–Pacific is seen as a third safe haven for portfolio diversification [13][16] Family Office Archetypes - Single-family offices in the Asia–Pacific region fall into four main archetypes: Visionary Entrepreneur, Traditional Business Owner, Embedded, and Professionalized family offices, each with distinct investment preferences and operational models [16][19] - Professionalized family offices, with in-house chief investment officers and higher assets under management (AUM), account for the largest proportion of family offices in the region [19] Challenges and Opportunities for Service Providers - Family offices face challenges such as weak governance, rising operational costs, limited access to bespoke alternative investments, and outdated technology [17][22][26] - Service providers, including banks, insurers, MFOs, and WealthTechs, can address these challenges by offering tailored solutions, improving governance structures, and leveraging technology for operational efficiency [17][22][26] Provider Types Serving Family Offices - Five types of providers serve family offices: banks with integrated or à la carte approaches, insurers, MFOs, and WealthTechs, each offering differentiated services and fee structures [28][32][36][37] - WealthTechs, in particular, are gaining traction by using technology to transform investment management and offering scalable solutions at competitive rates [37] Framework for Serving Family Offices - Providers should focus on scalability, solutions, service, and security to effectively serve family offices, with banks and insurers enhancing their operating models through partnerships, technology, and tailored offerings [43][46]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Generative Artificial Intelligence (GenAI) has the potential to significantly enhance efficiency in public administration by automating tasks that currently consume 60-70% of employee time, such as content synthesis and citizen interaction [3] - The German government plans to invest €1.5 billion by 2025 to expand the AI sector and leverage its potential for employees and businesses [3][4] - Successful scaling of GenAI in public administration depends on seven key factors, including regulatory frameworks, centralized provision of solutions, and effective risk management [5][15] Summary by Sections Investment Rating - No specific investment rating provided in the report Core Insights - GenAI can close efficiency gaps and accelerate the digitalization process in public administration [3] - Current usage of GenAI in public administration is primarily through pilot projects, with a focus on creating acceptance and demonstrating effectiveness [3] - The true potential of GenAI lies in its scaled, widespread use across different authorities [3] Preconditions for Widespread Use of GenAI - A reliable regulatory framework is necessary for scaling GenAI applications in Germany, addressing data protection and quality assurance [5] - Transparency regarding data protection and security is essential for GenAI to be perceived as a reliable technology [7] Success Factors for Technical Scaling - Centralized provision of functional GenAI solutions can facilitate broader use in administrative organizations [8] - A unified governance structure for the widespread deployment of GenAI solutions is crucial [9] - Existing technical infrastructure must be expanded to support GenAI solutions effectively [10] Success Factors for Accelerated Scaling - Systematic development of skills and recruitment of GenAI talent is necessary for effective deployment [13] - Encouraging the exchange of GenAI solutions among different authorities can reduce redundancy and improve efficiency [14] - Establishing effective risk management practices is vital to identify and mitigate risks associated with GenAI usage [15][16]

Investment Rating - The report does not provide a specific investment rating for the industry Core Insights - Versatile leadership is essential for navigating complex business environments and engaging effectively with diverse stakeholders [4][5][22] - Leaders must cultivate a mix of humility, confidence, and resilience while being adaptable to changing circumstances [4][5] - The ability to communicate authentically on social and environmental issues is increasingly important for CEOs [19][20] Summary by Sections Leadership Versatility - Successful leaders are characterized by their ability to pursue diverse experiences, maintain curiosity, and master stakeholder dynamics [4][5] - Versatile leaders know when to broaden their focus and when to delve deeper into specific issues [5] Challenges Faced by Leaders - Leaders today must manage external challenges such as supply chain disruptions, inflation, and generational differences among employees [3][4] - The rapid pace of technological change, particularly in AI, is reshaping business models and workforce dynamics [3] Importance of Diverse Experiences - Leaders should seek varied environments and challenges to develop a broad skill set [10][12] - Versatility allows leaders to pivot between different operational modes, such as cost-cutting and growth [7][10] Deep Learning and Curiosity - Deep, creative thinking is crucial for leaders to understand their business intricacies and competitive landscape [13][14] - Continuous learning and curiosity enable leaders to adapt and thrive in changing conditions [16][17] Communication and Social Responsibility - CEOs must navigate the complexities of taking public stances on social and environmental issues [19][20] - Authenticity in leadership is vital, as stakeholders expect leaders to align their actions with their stated values [22][23] Conclusion on Leadership Versatility - Cultivating versatility is critical for leadership success, requiring leaders to identify necessary skills and experiences [24] - Leaders should focus on areas that are most relevant to their organizations and invest time in deepening their understanding [24]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The energy transition is in its early stages, with only about 10 percent of the required deployment of low-emissions technologies achieved by 2050 in most areas, indicating significant room for growth and investment opportunities [9][15][28] - Twenty-five interlinked physical challenges must be addressed to advance the energy transition, which involves developing new low-emissions technologies and entirely new supply chains and infrastructure [9][10][29] - Understanding the physical challenges can help CEOs and policymakers navigate the transition effectively, identifying viable opportunities and addressing bottlenecks [11][42] Summary by Sections At a Glance - The energy system accounts for over 85 percent of global CO2 emissions, necessitating a transition to low-emissions technologies while expanding energy access globally [9][15] - Progress has been made in some areas, but the most demanding challenges remain largely unaddressed [9][28] Introduction - The global energy system is complex and has been optimized over centuries, but it is responsible for high emissions and inefficiencies [14][57] - The transition aims to reduce emissions while maintaining or improving energy system performance [57][58] Executive Summary - The current energy system is high-performing but generates significant emissions, with two-thirds of energy currently wasted [24][57] - Low-emissions technologies like solar and wind power need to be deployed effectively to ensure a successful transition [25][27] Energy Transition Challenges - The transition involves transforming seven interlinked domains: power, mobility, industry, buildings, raw materials, hydrogen, and carbon reduction [26][40] - Addressing the hardest of the 25 identified physical challenges is crucial for reducing energy-related emissions [29][35] Physical Challenges Overview - The report categorizes challenges into three levels based on technological performance and interdependencies, with Level 3 challenges being the most difficult [34][35] - Significant scaling of low-emissions power generation capacity is required, alongside advancements in electric vehicles and industrial decarbonization [36][37][38] Conclusion - A successful energy transition requires a comprehensive understanding of physical challenges and the interdependencies within the energy system [20][42] - Stakeholders must consider both immediate actions and long-term strategies to facilitate the transition while ensuring affordability and reliability [43][44]