With Tesla shares (NASDAQ: TSLA) hitting all-time highs, up 74.1 percent YTD through 6 February 2020, the outlook for EVs—and autonomous vehicle technology (AVs)/intelligent mobility overall—is a hot topic once again among investors and industry participants. TSLA share performance comes at a time when there are mounting questions about the venture capital (VC) funding deal pipeline and auto company investment commitments, as well as the performance of current mobility start-ups.
VC funding of mobility companies (including autonomous vehicles, ridesharing and carsharing) remained vigorous through 2019 for U.S.-based technology start-ups and new ventures, as illustrated below:
U.S. Mobility Funding for Automotive Sector—Announcements 2012-2019 (USD billions)
Source: Crunchbase.com (6 February 2020)
More recently, however, the automotive mobility deal pipeline has shown signs of marked slowing as a result of changing investor sentiment. VC investors appear increasingly concerned about the delayed profitability outlook for start-ups, in particular, following some high-profile announcements by industry stalwarts. Most notably, on 16 January 2020, Magna International (NYSE: MGA) announced plans to end its 2-year partnership to develop AVs with Lyft (NASDAQ: LYFT). Magna will instead focus on advanced driver-assistance systems, also known as ADAS or SAE Level 2-3 Driving Automation.
U.S. Mobility Funding for Automotive Sector—Announcements January 2018, 2019, 2020 (USD millions)
Also, the January 2020 announcement of a management shake-up at May Mobility has raised some questions about performance outlook. To date, May has raised USD 83.6 million—including its most recent round led by Toyota of USD 50 million (Series B) in December 2019. May is currently considered among the leading developers of AV shuttles and is a bell-weather company for micro-transit services.
The automotive, transportation, and intelligent mobility industries are all experiencing transformative changes due to advancements in connectivity and automation technologies, data analysis, and the rise of mobility services. CAR closely tracks these developments in the Mobility Web of Deals—a proprietary database of investments, partnerships, mergers, acquisitions, and joint ventures in this space.
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