Generally speaking, the capital investments into the mobility landscape have increased dramatically during the last few years. Just comparing the periods between 2010-2013 and 2014-2018 saw a sevenfold increase in investments across all technology sectors. More than half of this sum is reportedly on individual amounts greater than $1 billion, making them industry-shaping moves that affect the mobility sector as a whole, many of them being large-scale mergers or acquisitions. Furthermore, it is estimated that it would cost a single company north of $70 billion to acquire a strong position within all four of the ACES development areas (Automotive, Connected, Electric & Shared vehicles), a sum which is doubtful any company has access or willingness to invest on their own, which explains the many mergers, partnerships and acquisitions that are taking place in the mobility playing field.
It also seems that traditional OEMs are rapidly getting new competitors on multiple fronts, as new tech companies (Waymo, Uber etc.) together with venture capitalists and private-equity firms are behind over 90% of the investments into new mobility services the last few years. Still, with under 10% of total investments, traditional vehicle manufacturers still issue around 85% of all new patents in the area, pointing toward a strong focus on internal R&D.
Examining these investment trends geographically points toward the US being the country leader of mobility developments as cash flow goes, followed by China, the UK and Israel. Interesting to note is that the EU only received 5% of global funding, even though it contains 19% of all identified companies in the mobility sector.
With comprehensive data on where investments flow and bets are made within the evolving mobility industry, it is becoming even clearer that traditional vehicle technology focused on actual transportation is becoming merely a base pillar in future services aimed at delivering mobility per the ACES paradigm. The real race for dominance thus lies in adding complimentary technology and services onto traditional vehicles, which now has shifted long dominating incumbents to become sub-contractors in favour of tech and IT companies, some of which have already overtaken some OEMs in terms of valuation and impact in the emerging mobility sector. A good example of this effect is the dramatic increase in investments into ride-hailing services, which currently outpace both electric and autonomous vehicle developments, and also tells us where the industry is expecting the biggest payback in the years to come.
Written by Darijan Jelica, RISE Viktoria.
1. 2019-04. Start me up: Where mobility investments are going.