Sector trends

Micromobility: a new and growing market

The UK’s second micromobility conference, hosted by WMG and sponsored by NatWest, explored the latest developments in this fast-moving market. Here are some key takeaways for your business.

There were presentations from key influencers and policymakers, including junior transport minister Trudy Harrison, as well as consumer groups, vehicle designers and innovators, finance specialists, founders and entrepreneurs.

What opportunities are there in micromobility?

The micromobility sector offers a chance to make cities cleaner and greener as well as nicer places to live, work and play. It represents a substantial industrial opportunity for the UK. 

Professor David Greenwood, CEO of WMG, says: “As a High Value Manufacturing Catapult, we want to see companies making more of high value in the UK. This new and growing market is a fantastic opportunity to take companies from a variety of sectors and find new products and services in this area. And it’s not just the vehicles, it’s also the infrastructure and service backbones that support them.”

Richard Hill, the bank’s Head of Automotive and Manufacturing, explains how we are playing our part in helping the sector make the most of the opportunity. “The transition and disruption in the automotive and transport sectors today are like nothing seen since the advent of mass vehicle production, dating back to Ford’s Model T 120 years ago. The industry in the UK is in its infancy, but we’re keen to help the transition and grow with it. I’m really proud, for example, to collaborate with WMG on the NatWest Clean Transport Accelerator programme.”

Collaboration was a common theme running through the conference. As the nascent sector powers up its supply chain, an ecosystem is starting to develop, supporting new products and schemes. 

Some context: why is micromobility growing?

The world faces significant challenges as increasing urbanisation brings with it more congestion and pollution. Throw in the need to decarbonise economies, and we need new thinking about how people and freight move from place to place. Switching from the internal combustion engine (ICE) to electric vehicles (EVs) can address some of these challenges, such as pollution, but not all. As carmakers address concerns on range anxiety, so EVs get larger and heavier, which increases total lifetime emissions. 

Public transport forms part of the answer, helping to move people long distances efficiently. But such systems can’t get passengers or parcels where they want to go with the precision offered by a car or van.

How could micromobility help with the environment?

Powered micro vehicles (PMVs) offer a low-emission option with enough benefits to encourage drivers out of traditional cars and vans, reducing congestion and pollution. Spend time in any modern city and you’ll see that PMVs, in the form of light electric cargo vehicles, e-bikes and scooters, hoverboards and other innovations, are already here.

Over the last few years, demand for such vehicles has grown steadily, attracting entrepreneurs and finance. The whole sector received a boost from the pandemic, as consumers favoured the social distancing of an e-scooter or bike over crowded buses and trains. 

The transition and disruption in the automotive and transport sectors today are like nothing seen since the advent of mass vehicle production 120 years ago

Richard Hill
The bank’s Head of Automotive and Manufacturing

There has been a proliferation of new developments in the sector. And from the evidence on display at Micromobility UK 2022, there are plenty more on the way. Many of these vehicles have been designed and built in the UK. 

But there is a major problem. At the moment, a lot of these vehicles are illegal. 

Integrating PMVs into transport networks

Most PMVs can’t legally be used on UK roads because they are classed as motor vehicles, meaning they must meet requirements that are difficult to reconcile with the design of the vehicles. The junior transport minister, Trudy Harrison, acknowledged the need to update regulations. “These vehicles can have a transformative impact on transport across our cities, towns and villages,” she said. “But we face the challenge of integrating these new vehicles into an existing transport network.”

The intention is to create a new category of vehicle that can flex to encompass future types of micromobility vehicles. A flexible regulatory framework will ensure that vehicles are regulated to improve safety not just for the users of the vehicles, but also for other road users and pedestrians. 

There is a strong desire that this transport revolution doesn’t ignore the needs of minorities and those with disabilities. Sales data presented by Halfords showed the existing market for e-scooters to be heavily biased towards young men, often on lower incomes; while e-bikes are more likely to be purchased by older, wealthier men. Making sure that future frameworks and policies are equitable for all users is vital. 

What are the challenges for the micromobility sector?

Until the UK regulatory environment is resolved, start-ups  may continue to head overseas to other countries where a more certain regulatory framework makes investment decisions easier. The full weight of private equity, for example, is not yet open to the sector in the UK, largely because it is difficult to accurately predict demand and market size. The cost of having to hire private land to run real-world tests is another factor driving start-ups overseas, with many firms already having offshored manufacturing. This matters because making things in less carbon-conscious emerging markets and shipping them back to the UK seriously impacts their green credentials. 

What are the opportunities for micromobility within the UK?

Analysis by WMG shows that the equivalent manufacturing footprint of a typical car could make 14 scooters in China, while manufacturing in the UK, with its greener energy mix and a lack of shipping, you could make 40 scooters for the same footprint. 

  • The UK has a highly skilled and adaptable industrial base that is well set to offer the facilities needed to manufacture many of these vehicles. 
  • An extremely strong materials science base is also available to help develop the lighter composites (such as thermoplastics) that can reduce weight and emissions further.

Change is coming to the way we live, work and travel

At this conference, we learned that the micromobility market presents a huge opportunity for established players and new entrants that are able to be visionary and seize the chance. 

Legislative change, including the creation of a new legal category of vehicle, is needed to bring clarity and certainty to the market and help to unlock public and private investment in infrastructure and vehicle innovation.

With its rich automotive and manufacturing heritage, the UK will be well placed to take advantage of this boom. 

Join the transport revolution: five things to consider

  1. Identify your role – explore whether you could have a future in this space by testing the business model.
  2. Discover whether you can nurture partnerships in your sector to aid joined-up thinking.
  3. Learn more about e-mobility technology and the return on investment it could offer.
  4. Attract and retain the talent required to embrace the opportunities and challenges in this sector.
  5. Understand how the transition to micromobility could help your decarbonisation journey.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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