Key takeaways

• Funding
  • Mega rounds in the EV Economy industry drove funding growth: Passenger Mobility Tech raised USD 7.8 billion in Q1, up 178.2% YoY and 26.2% QoQ. This growth was largely led by EV battery developers and passenger EV manufacturers (such as NorthVolt and Lucid Motors) in EV Economy, with support from ride-hailing service providers in Shared Mobility (such as Lyft and inDrive). However, funding declined in the Auto Tech, Passenger eVTOL Aircraft, and Smart Mobility Information industries. Technological complexities and regulatory hurdles may delay autonomous vehicle deployment at scale—hence, the industry witnessed funding support withdrawals (e.g., General Motors’ [GM’s] Cruise, and Motional).

• Product updates
  • Autonomous and automated driving tech updates and AI feature integrations fueled the Auto Tech industry: Autonomous vehicle tech companies (Amazon’s Zoox, Waymo, and and advanced driving assistance systems (ADAS) makers (BMW, Mobileye, Luminar, and Magna International) continued to enhance and update their respective technologies. However, product discontinuations, closures, and layoffs in the industry reflect the challenges in the sector.
  • EV updates centered on new EV models, infrastructure developments, and improving battery supply: EV Economy saw a surge in innovation and growth, with new EV models launched by Rivian, and Additionally, efforts to fortify the EV ecosystem were evident, as companies focused on improving charging infrastructure. EV battery manufacturers also dedicated efforts to augment battery supply and advance technology this quarter.
  • Smart Mobility Information saw geographic expansion, while Passenger eVTOL commercialization began: Smart Mobility Information players experienced significant geographic expansions. Significant milestones were achieved in Passenger eVTOL Aircraft, with launching the world's first commercial customer eVTOL flights, while others continued to progress with the launch of online aircraft sales and unveiling prototypes.

• Partnerships
  • NVIDIA supplied ADAS compute platforms to Auto Tech players, while others focused on AI integrations: NVIDIA was seen forging back-to-back deals with EV manufacturers and technology developers for the advancement of safety and driving assistance technologies. AI integrations remained a key trend, with industry players looking to update their ADAS and connected vehicle features with AI integrations.
  • EV Economy and Passenger eVTOL Aircraft industries saw expansion and enhancement of charging infrastructure: Notable collaborations in EV Economy included major automakers, energy companies, and highway systems teaming up with third parties to expand EV charging networks or access to existing networks. Passenger eVTOL Aircraft disruptors also concentrated on infrastructure building while some also looked to expand their geographical coverage.
  • Smart Mobility Information advanced multimodal mobility management: Players working on multimodal mobility management technologies looked to integrate advanced technologies to improve user experience and expand geographical coverage.

• M&As
  • Q1 saw limited activity in industry consolidations: Only two notable M&A deals took place and were related to the Auto Tech and Smart Mobility Information industries: 1) Karma Automotive acquired Airbiquity to enhance its EVs with advanced connected software capabilities and 2) ParkHub merged with JustPark, aiming to bolster parking solutions and geographical reach across North America and the UK.

• Regulations
  • As the landscape for Passenger Mobility Tech evolves rapidly, it is shaped by regulatory frameworks, government funding, and geopolitical considerations: Companies worldwide are advancing by securing approvals for robotaxi deployments, with notable progress in the US and China. However, local concerns in the US over the safety of autonomous vehicle deployments have led to legal and legislative pushbacks against state-level authorizations. Concurrently, significant investments in EV and smart mobility technologies from authorities aim to bolster the adoption of EVs and improve infrastructure for safer, smarter mobility. Amid this push toward innovative transportation solutions, US national security concerns over Chinese auto tech companies introduce additional regulatory complexities.

• Outlook
  • Active engagements from leading OEMs in the Auto Tech space signal a rising trend in AI integration within ADAS and connected car technologies. We noticed companies are increasingly collaborating with AI specialists, paving the way for a generation of vehicles that are smarter and more secure—a trend observed in past quarters as well. While companies strive for long-term commercial success, resource reallocation has led to layoffs, which may persist, as businesses adjust capacities, potentially leading to further layoffs.
  • The ongoing expansion of the EV ecosystem, particularly in charging infrastructure, and introducing new models from manufacturers are expected to bolster EV adoption. Improved infrastructure, a wider range of models, advancements in battery technology, and customer incentives are key trends contributing to this positive outlook, consistent with observations from previous quarters.
  • Smart Mobility Information’s global expansion indicates widespread demand for advanced mobility solutions. As smart mobility becomes more user-centric by incorporating personalized features and improved accessibility, the sector is poised for a dynamic and technology-driven future.
  • Passenger eVTOL Aircraft should continue marching toward commercialization as evidenced by LIFT Aircraft’s customer launch, Pivotal’s online sales opening, and several other partnerships with infrastructure providers, indicating positive signs for commercialization in the future.

Funding: Two deals in EV Economy account for three-quarters of funds raised; autonomous vehicle players lose funds

Analyst Take: In Q1 2024, funding rose 26.2% YoY to USD 7.8 billion—largely led by EV Economy—with Northvolt and Lucid Motors securing 77.1% of the total funds raised (88.7% of funds raised by EV Economy startups). The only other industry to witness an uptick in funding was Shared Mobility, while Auto Tech, Passenger eVTOL Aircraft, and Smart Mobility Information attracted less investment this quarter. This trend is also evidenced by the withdrawal of funding from autonomous passenger vehicle manufacturers Motional and Cruise, with their main investors (Aptiv and GM, respectively) pulling their financial support. Overall funds raised comprised mostly post-IPO and debt financing (90% of funds raised in Q1 2024).

Passenger mobility tech sector Q1 2024 funding summary

• In Q1 2024, funding in the Passenger Mobility Tech space rose 178.2% YoY to USD 7.8 billion, despite the number of rounds falling 12.5% YoY to 28 (USD 2.8 billion across 32 rounds in Q1 2023). The surge in funds raised was predominantly due to the heightened funding activities of startups in the EV Economy industry (up 3.6x YoY to USD 6.8 billion) and was supported by higher funding in the Shared Mobility industry (up 117.4% YoY to USD 0.72 billion).

• Funding growth was largely due to substantial debt funding rounds in the EV Economy and Shared Mobility industries. Norvolt raised a substantial USD 5 billion in debt (73.9% of funds raised in EV Economy in Q1) for debt refinancing and facility expansions. Lyft also raised USD 400 million in post-IPO debt financing (55.5% of funds raised in Shared Mobility) to buy back senior notes and common stock from institutional investors.

• The Auto Tech, Passenger eVTOL Aircraft, and Smart Mobility Information industries attracted less investment in Q1, witnessing drops of 34.5% YoY, 66.0% YoY, and 69.7% YoY, respectively.

• The overall average deal size for Q1 2024 tripled YoY, with the most notable increases coming from EV Economy and Shared Mobility, which rose about 2.8x and 1.8x YoY, respectively.

• Conventional seed, early (Series A and B), and growth-stage funding were less popular and collectively accounted for only 10% of total funds raised in Q1 2024 (down from just over 25% in Q1 2023). An increase in other funding rounds drove the average funding round growth—mostly post-IPO equity and debt financing—accounting for 90% of total funds raised in Q1 2024, as well as the average other funding rounds growing a substantial 3.2x YoY to USD 335 million in Q1.

• Notable funding rounds: Besides Northvolt’s funding, Lucid Motors’ USD 1 billion post-IPO equity funding for corporate purposes was the next largest funding round in Passenger Mobility Tech during Q1 2024. Notably, the top 10 funding rounds for Q1 2024 had a combined value of ～USD 7.4 billion (96% of the funds raised during the quarter). Most of the top 10 rounds were in the EV Economy and Shared Mobility industries.

Product updates: Autonomous vehicle and safety tech development at the forefront; growing momentum in EV and charging infrastructure development

Analyst Take: Product updates in Q1 2024 were driven by the Auto Tech and EV Economy industries, with a combined share of 86% of updates. In Auto Tech, players continued to update and upgrade autonomous vehicles and related technologies (Amazon’s Zoox, Alphabet’s Waymo, and Pony.ai) like the previous quarter. Waymo further broadened its market presence and continued its expansion, similar to its efforts in Q4 2023.

In the EV Economy industry, EV makers introduced new models (Rivian, BMW, Toyota, Honda, VinFast, and Tesla), while several players also looked to strengthen the EV ecosystem by enhancing the charging infrastructure (Blink Charging, LG Electronics, Nxu, and Wallbox). EV battery makers worked on enhancing the supply of batteries with new R&D and manufacturing facilities and further tech upgrades (NanoGraf, Addionics, Northvolt, and 24M Technologies).

However, product discontinuations, closures, and layoffs underscore the persistent challenges facing autonomous vehicle development. These difficulties were observed at companies such as GM, Apple, Motional, May Mobility, and Aurora Innovation.

Players in the Smart Mobility Information industry experienced significant geographic expansions (SkedGo, Optibus, and Hayden AI), while startups in Passenger eVTOL Aircraft launched products/services (LIFT Aircraft and Pivotal) and concepts (Hyundai's eVTOL division, Supernal).

• We observed 66 product updates during Q1 2024 in the Passenger Mobility Tech sector. These were mostly centered on Auto Tech (31) and EV Economy (26).

• Auto Tech updates were driven by autonomous technology updates, ADAS improvements, and AI integrations
  • Autonomous passenger vehicle developers continued to upgrade their hardware and software in Q1 2024 and included 1) Amazon Zoox enhancing features of its robotaxis and initiating test phases and 2) Pony.ai boosting its R&D capabilities by establishing a new R&D center in Luxembourg. Waymo also actively addressed software issues through recalls and updates. 
  • Meanwhile, other positive developments included 1) Waymo expanding its driverless operations across Los Angeles, Austin, and Phoenix and 2) EV manufacturer Rimac Automobili establishing Project 3 Mobility, becoming the first passenger EV startup to branch into developing a fully autonomous robotaxi ecosystem.
  • New ADAS features and related systems were released throughout the quarter with notable developments, including 1) BMW upgrading its systems to include enhanced Highway Assistant capabilities; 2) Luminar introducing an Automatic Emergency Steering (AES) feature, 3) Mobileye unveiling its "DXP" operating system tailored for automakers to develop ADAS products; and 4) Magna International launching a pre-development technology focused on assessing driver fitness, aiming to reduce incidents related to impaired driving.
  • However, closures and discontinuations reflect the challenges tech companies face in the autonomous vehicle and safety and driving assist tools segments. Apple experienced another downsize of its self-driving car project in Q1, leading to the project's eventual discontinuation. Mobileye decided to phase out its aftermarket ADAS unit, pivoting toward more integrated solutions. Similarly, GM strategically began discontinuing its "Ultra Cruise" ADAS, opting to concentrate on developing and enhancing its more popular "Super Cruise" system instead.
  • Players also looked to integrate AI-based technologies into connected vehicles, emphasizing the pivotal role of AI in advancing automotive technology and security. Google and Mercedes-Benz rolled out AI-powered infotainment features, while BMW introduced its GenAI-powered connected car features. Additionally, Upstream Security launched a GenAI-based vehicle cybersecurity system.

• Passenger EV launches and infrastructure and battery developments drove EV Economy product updates
  • New EV concepts and launches were announced by many automakers during the quarter, including Rivian, BMW, Toyota, Honda, VinFast, and Tesla. EV makers and incumbents also actively expanded their EV production capabilities by investing in establishing and enhancing manufacturing facilities. The list includes notable companies such as Toyota, Canoo Technologies, and VinFast.
  • Efforts to strengthen the EV ecosystem continued, focusing on enhancing EV charging infrastructure. Blink Charging and LG Electronics advanced plans to construct additional EV charger production facilities in the US. Similarly, Nxu and Wallbox initiated commercial production of their charging units, NxuOne and Supernova 180, respectively. Furthermore, Rivian announced plans to open its charger network to non-Rivian customers in the second half of 2024 to expand accessibility, following Tesla's footsteps.
  • Meanwhile, several disruptors expanded their EV battery development solutions, including 1) NanoGraf inaugurating a new R&D facility in Chicago; 2) Addionics investing in a battery manufacturing plant in the US; 3) Northvolt starting construction of its battery gigafactory in Germany; and 4) 24M Technologies’ upgrading to Li-ion battery technologies for improved cycle life, rate capabilities, and battery safety.
  • Companies were also seen offering incentives to boost EV adoption, with GM and Ford spearheading initiatives to increase EV sales by offering purchase incentives and adjusting prices.

• Smart Mobility Information product updates were directed at geographic expansions
  • Several startups chose to expand their geographical coverage in Q1 2024, including 1) transport planning app provider SkedGo (to include France) and 2) multimodal mobility management company Optibus (Manaus, Brazil).

• Passenger eVTOL Aircraft saw new product concepts and commercial launches
  • LIFT Aircraft initiated commercial customer eVTOL flights at Lakeland Linder Airport (till the end of April), with plans to expand operations to Austin, Texas, marking the world's first commercial launch. Pivotal started online sales of its lightweight electric personal aircraft, with US deliveries anticipated to begin in June 2024.
  • New eVTOL aircraft concept unveilings included Hyundai's eVTOL division, Supernal, introducing a prototype concept, setting the stage for commercial air taxi services expected to commence in 2028.

Partnerships: Incumbents partner to enhance automated driving features and EV infrastructure; infrastructure development for eVTOL operations underway

Analyst Take: NVIDIA, Bosch, Tesla, and Mercedes-Benz were the most active players in the Passenger Mobility Tech sector, with NVIDIA inking seven deals, while the latter three entered five partnerships each over the quarter. Most of the partnerships were in the Auto Tech industry. These were led by the safety and driving assist tools segment, with NVIDIA signing customer partnerships to supply compute platforms for ADAS development. AI integrations remained a key trend in Q1 2024 as well, as companies increasingly sought to update their ADAS and connected vehicle features with AI integrations. Most of the partnerships in EV Economy were related to EV charging infrastructure development and improving EV charging networks to deliver better access to customers. Not many incumbent partnerships were seen in Passenger eVTOL Aircraft or Smart Mobility Information industries; however, disruptor collaborations to enhance multimodal mobility management and build up infrastructure for eVTOL aircraft operations were more plentiful.

• Two-thirds of incumbent partnerships in the Auto Tech industry focused on driving assistance tools and connected car experiences
  • We observed 34 partnerships in the Auto Tech industry, 27 of which were driven by incumbent partnerships. The majority of established partnerships focused on the development of safety and driving assist tools. These were largely led by tech provider NVIDIA to provide compute platforms for diverse customers, including EV manufacturers and technology developers, such as Foretellix, Li Auto, Mercedes-Benz, Cipia, Luminar, and Lenovo, to advance safety and driving assistance technologies.
  • Notable partnerships also emerged for integrating AI features (including GenAI) into safety and driving assist tools. Such deals included 1) Bosch partnering with Microsoft (to explore the use of GenAI in evaluating road situations for appropriate responses), 2) Tesla joining forces with OpenAI (to integrate AI-based video generation into Tesla's automated driving systems), and 3) Cognata partnering with Microsoft (to integrate high-precision AI simulation for automated driving feature development).
  • Collaborations in AI integration were also seen with connected platforms and related infotainment, underscored by notable partnerships that focused on AI-based voice assistant technologies. These included the 1) Honda-Sony joint venture (JV) partnering with Microsoft, 2) Volkswagen collaborating with Cerence, 3) Cerence partnering with Microsoft, 4) Stellantis with OpenAI, and 5) BMW joining forces with Amazon for such purposes. Cerence also announced OEM customers (names not disclosed) for its AI-powered voice assistance tech.
  • Autonomous passenger vehicle developers predominantly engaged in partnerships to expand their geographical presence. These largely included collaborating with governments, city authorities, mobility service providers, and technology companies. Key initiatives included 1) Beep and Oxa launching autonomous shuttles at Florida State College in Jacksonville; 2) Toyota deploying robotaxis in Odaiba, Tokyo; and 3) Pony.ai extending operations to South Korea and Luxembourg.

• Almost half of incumbent EV Economy partnerships were in EV charging infrastructure 
  • We observed 31 partnerships in the EV Economy industry, 20 of which were driven by incumbent partnerships. With EV adoption, there was a greater emphasis on infrastructure, particularly the expansion of EV charging networks, with several notable incumbent partnerships, including
    • 1) Autobahn’s collaboration with Fastned, E.ON, Autostrom Nord, and TotalEnergies to establish 1,000 fast-charging stations at 200 motorway service areas in Germany.
    • 2) Tesla’s partnerships with Choice Hotels to install its Universal Wall Connectors at multiple hotels in the US and N1 to establish 20 new EV charging stations in Iceland.
    • 3) GM partnering with FreeWire Technologies to expand ultra-fast EV charging infrastructure across the US.
    • 4) TotalEnergies collaborating with Wenea to develop a network of high-capacity charging points in Spain.
    • 5) ENGIE North America launching a project with Cupertino Union School District in California which includes establishing 72 EV charging stations.
  • In addition, several other partnerships focused on increasing user access to EV charging, such as 1) BMW’s partnership with Shell Global to give its driver access to over 100,000 EV charging sites from multiple providers in the US and Canada via the “My BMW” app and 2) Lotus’ collaboration with Bosch to give its customers access to 600,000+ charging stations across Europe. 
  • Disruptors offering EV charging solutions such as Blink Charging and EVgo and EV maker NIO were also seen collaborating with third parties to strengthen their respective EV charging networks in various geographies.
  • Prominent incumbent collaborations in the development of Li-ion EV batteries focused largely on supply agreements for battery materials. Notable agreements include 1) Nouveau Monde Graphite (NMG; a multi-year partnership to supply 18,000 tonnes of active anode material per annum to Panasonic); 2) LG Chem (a USD 18.6 billion deal with GM to supply cathode materials for 10 years); 3) Albemarle (a multi-year partnership to deliver battery-grade lithium to BMW); and 4) Shengxin Lithium Energy (a four-year contract to supply battery-grade lithium to Hyundai).

• Partnerships in the Passenger eVTOL Aircraft industry centered on building operational infrastructure 
  • eVTOL aircraft makers partnered with third-party aviation services, airport operators, and charging infrastructure providers to develop vertiports and charging infrastructure to facilitate eventual operations. Notable deals included
    • 1) Lilium’s partnerships with Atlantic Aviation to electrify Atlantic's existing airport infrastructure network in the US, Star Charge to purchase 120 chargers, and Fraport to develop vertiport infrastructure at multiple airports in Germany and Europe.
    • 2) BETA Technologies partnering with Golden Triangle Regional Airport (GTRA) and Avflight to install an electric aviation charging station in Mississippi.
    • 3) Overair’s partnership with Clay Lacy Aviation to set up vertiports operations and charging facilities in Southern California.
    • 4) Joby Aviation, which also partnered with Clay Lacy Aviation to set up an electric air taxi charger at the John Wayne Airport (SNA), California.
  • eVTOL aircraft makers also expanded their geographical coverage internationally by partnering with parties such as vertiport operators, aviation companies, and government bodies. The list includes Eve Air Mobility (Japan and Southeast Asia), Lilium (Southeast Asia), eHang (Japan), and Joby Aviation (the UAE).

• Collaborations in Smart Mobility Information revolved around the multimodal mobility management segment
  • Notable partnerships in the multimodal mobility management area included
    • 1) Bosch, Storm Reply, and Amazon AWS’ collaboration to offer a unified approach for the end-to-end route planning process.
    • 2) Drover AI partnering with NAVEE and KNOT Charging Pile to offer its advanced rider assistance services and co-develop related software.
    • 3) Optibus partnering with Geoactio to extend its transit data management software to Spain.

M&As: Smart Mobility Information and Auto Tech continue to drive industry consolidation; limited activity compared with the previous quarter

Analyst Take: In Q1 2024, we saw limited activity in industry consolidations, with only two notable M&A deals taking place within the Passenger Mobility Tech sector (compared with nine M&A deals in Q1 2023 and 10 in Q3 2023). The Auto Tech and Smart Mobility Information industries continued to drive M&A activities, highlighting focused strategies to expand product offerings and integrate cutting-edge technologies in a competitive landscape. Even though the previous quarter also saw notable M&A deals in the EV Economy industry (4), no M&A deals were reported in Q1 2024.

• In February 2024, Karma Automotive, a Southern California-based ultra-luxury EV manufacturer, acquired the technology assets and intellectual property (IP) of Airbiquity, a Seattle-based connected vehicle software company, to integrate Airbiquity's software into its Karma Cloud Services and embedded vehicle technology.

• In March 2024, ParkHub, a North American parking inventory management solution provider, merged with JustPark, a UK-based parking discovery and payment website and mobile app, to complement its product offering and expand geographic coverage across North America and the UK.

Regulations: Robotaxi progressing with commercial deployments amid regulatory hurdles; government investments in EV and mobility technologies promote adoption

Analyst Take: The push for robotaxi deployments globally continued with companies like Waymo and Pony.ai securing approvals, leading the way in the US and China. However, regulatory hurdles—particularly at the city level in California—underscore the complexity of integrating autonomous vehicles into existing urban landscapes, mirrored by legal action and demand for local oversight, which reflect concerns over safety and control. US national security apprehensions are also creating regulatory challenges for Chinese auto tech firms, which may result in downsizing or ceasing their operations in the US.

Meanwhile, significant investments in EV and smart mobility infrastructure by federal and state authorities in the US indicate a broader commitment to transforming passenger mobility, balancing innovation with public safety and environmental sustainability.

• Companies secured approvals for robotaxi deployments despite tightening regulations 
  • Companies are obtaining the green light to launch driverless commercial robotaxi services across the globe. Waymo is set to roll out its robotaxi service in Los Angeles, the San Francisco Peninsula, and San Francisco freeways (California) after approval in March 2024. Meanwhile, Pony.ai secured approvals to deploy its robotaxi service in China, specifically in the cities of Shenzhen and the Nansha district of Guangzhou.
  • In California, city regulators are restricting the deployment of robotaxis due to safety concerns and past incidents, challenging state-level authorizations. San Francisco has escalated its concerns into legal action, suing the California Public Utilities Commission (CPUC) for allowing Waymo and Cruise to broaden their operations within the city, while San Mateo County is advocating for increased local control over robotaxi deployments. These moves reflect growing tensions between local safety priorities and the push for autonomous vehicle expansion.

Notes: 1) The list contains companies offering fully autonomous/automated passenger mobility solutions covered within the Auto Tech industry; 2) Apple discontinued vehicle development efforts in February 2024; 3) Refer Appendix 3 for more information

• US Federal and State authorities fund various passenger mobility tech-related projects
  • EV-related projects to promote the adoption of EVs in the country included 1) the US Energy Department approving nearly USD 710 million in loans for EV technology manufacturing ventures; 2) the California Energy Commission (CEC) approving a USD 1.9 billion funding plan that aims to further develop the state's EV charging and hydrogen refueling infrastructure; and 3) the US Government announcing USD 623 million in grants to introduce US-made EV chargers, with plans to have 500,000 EV chargers by 2030.
  • To improve smart mobility, California regulators announced a USD 236.9 million investment to improve neighborhood connectivity, roadway infrastructure, and street safety.
  • The US national security concerns pose regulatory hurdles for Chinese auto tech companies. These growing concerns of the US could compel Chinese autonomous vehicle companies (e.g., Baidu’s Apollo, Pony.ai, WeRide, Didi, and AutoX) to scale back or entirely halt their testing activities in California. Meanwhile, the Biden administration is also investigating Chinese-made "smart cars" due to fears that these vehicles could collect sensitive data on American drivers, potentially leading to espionage or cyberattacks.

Value chain: R&D led by Auto Tech players looking to bring autonomous/automated vehicles and AI features; outbound logistics driven by partnerships to build EV infrastructure

Analyst Take: R&D efforts were central in product development and partnerships, primarily led by Auto Tech companies. Product development initiatives focused on autonomous vehicle technologies, with Amazon’s Zoox, Alphabet’s Waymo, and Pony.ai enhancing safety and innovation. Partnerships mainly involved integrating automated driving and AI into the automotive industry and were led by players such as NVIDIA, Mercedes-Benz, Cerence, and Microsoft. Outbound logistics also saw many activities driven by partnerships in the EV Economy industry. Most of these were led by companies like Tesla, GM, EVgo, and Blink Charging, which partnered with third parties to strengthen EV charging infrastructure.

Notes: 1) Comprises data from all five hubs in scope (only funding activity considered in Shared Mobility); 2) darker colors indicate greater intensity; 3) includes incumbent and disruptor activities; 4) value chain definitions are provided in Appendix 4

Appendix

01. Notable incumbent partnerships across Passenger Mobility Tech