Key takeaways

• Funding
  • Mega quarter dominated by mega rounds across all hubs: The mobility sector raised USD 4.7 billion in Q3, up 46.7% YoY, with all hubs witnessing an increase in funding. This was largely led by growing investor interest in the EV Economy and Auto Tech industries with Li-ion EV battery maker Northvolt raising USD 1.2 billion to further expand in Europe and North America, while self-driving software developer Aurora Innovation raised USD 820 million to launch its products commercially. 

• Product updates
  • Self-driving tech, subscription services, and battery tech marching forward: Q3 saw continued advancement of product hardware and software for autonomous vehicles, with a strong emphasis on enhancing driving safety, with General Motors (GM), May Mobility, and Mobileye introducing noteworthy innovations. The LiDAR and sensor market saw strategic moves from companies like Bosch and PreAct Technologies, highlighting its ever-evolving nature.
  • Subscription-based services for driving and safety, like those from Mercedes-Benz, Ford, and Tesla, gained global traction. Meanwhile, autonomous vehicle makers Cruise and Waymo, expanded both locally and internationally, emphasizing the industry's commitment to widespread adoption of autonomous vehicles. 
  • In the EV Economy space, the spotlight is on passenger EV manufacturing, with ONE’s LFP battery breakthrough pointing to advances in EV battery technology. NIO’s introduction of a photovoltaic self-consumption system with a vehicle-to-grid (V2G) charger also pointed to promising developments in EV charging infrastructure.

• Partnerships
  • Active expansion in charging networks and GenAI-based integrations:  Notable collaborations in the EV Economy space included major automakers such as BMW Group, GM, Honda, Hyundai, Kia, Mercedes-Benz, Stellantis, Ford, and Tesla teaming up with each other to expand charging networks and the ecosystem. In the Auto Tech space, startups such as Beep and May Mobility as well as established players like Toyota and Volkswagen worked on autonomous vehicle development and deployments, while GM and Continental were actively experimenting with GenAI-based connected vehicle integrations. The Passenger eVTOL Aircraft sector disruptors concentrated on infrastructure, while two startups Volocopter and Archer Aviation secured aircraft orders.

• M&A
  • Siemens’ acquisition of Heliox expanded its EV infrastructure with fast-charging solutions, reinforcing its commitment to sustainability. Meanwhile, XTI Aircraft's merger with Inpixon and its plans to go public highlighted the increasing convergence of technology and aviation. The period also witnessed a continued trend of companies going public via SPAC deals, including VinFast and Horizon Aircraft— highlighting the ongoing appeal of the SPAC route for mobility sector firms seeking to access the public markets.

• Regulations
  • Q3 saw Auto Tech players (GM, Alphabet, Pony.ai, and Ford) and Passenger eVTOL players (ASKA, Lilium, and EHang) obtaining approval from regulatory authorities in the US and other geographies, marking significant strides toward full commercialization. However, safety concerns continue to be a bottleneck, highlighted by San Francisco authorities suspending Cruise’s driverless vehicle deployment permit, citing safety issues with the technology. 

• Outlook
  • Cruise’s permit suspension could signify a refocus by regulators on safety: Cruise received approval from the California Public Utilities Commission (CPUC) to launch fully driverless commercial robotaxi services in August 2023 in San Francisco. However, within a week, Cruise was asked by the California Department of Motor Vehicles (DMV) to reduce its fleet by 50% due to a crash with a fire truck. Within the next two months, the CPUC and DMV suspended Cruise's permit, citing safety and misrepresentation concerns. This could lead to regulators enforcing additional scrutiny when granting permits in the future, delaying the robotaxi rollout.
  • GenAI is poised to become an area of interest for automakers: Incumbent players seem to be keen on further strengthening the EV ecosystem and developing cutting-edge solutions such as autonomous driving and safety tools. Also, collaborating with GenAI infrastructure providers will enable them to enhance their connected car features, including voice assistance, ultimately improving the overall customer experience.
  • eVTOLs seem to be closer to take off: Having secured critical approvals in Q3 2023, the Passenger eVTOL Aircraft industry is likely to be taking significant steps toward its eventual commercialization. The milestones in Q3 signal a promising future with the prospect of more widespread eVTOL operations and potential advancements in urban air mobility.

Funding: Two deals account for half the funding raised

Analyst Take: The funding raised in Q3 2023 rose 46.4% YoY to USD 4.7 billion, led by growing investor interest in the EV Economy and Auto Tech sectors. For example, Northvolt, a Li-ion EV battery maker, raised funding to further expand in Europe and North America, while Aurora Innovation, a self-driving software developer, raised funding to launch its products commercially. Investments in the EV Economy industry, however, were spread across the whole EV ecosystem including passenger EVs, EV components such as batteries, and charging infrastructure. Two players in the EV Economy space, Northvolt and passenger EV company NIO, secured almost half the funds raised by mobility sector startups during Q3 2023. It is also notable that most of the funds raised were from various stages such as post-IPO fundraising, debt financing, grants (72% of funds raised in Q3 2023), and seed funding (26%), as opposed to growth- and early-stage financing.

Mobility sector Q3 2023 funding summary

• In Q3 2023, mobility-sector-related companies raised USD 4.7 billion across 24 funding rounds. The total was 46.4% higher YoY, with the number of rounds down 7.7% YoY (just over USD 3.2 billion across 26 rounds in Q3 2022). The increase was primarily due to an increase in the funds raised by startups in the EV Economy and Auto Tech industries. 

• Startups in the EV Economy space raised USD 3.3 billion in Q3 2023 (up 15.4% YoY) led by large funding rounds from Northvolt (USD 1.2 billion) and NIO (USD 1 billion); Auto Tech startups raised a total of USD 1.1 billion in Q3 2023 (up 309% YoY), largely owing to Aurora Innovation (USD 820 million). 

• Passenger eVTOL Aircraft and Shared Mobility industries also saw upticks in investment during Q3 2023. The former witnessed funding increasing 818% YoY to USD 253 million, while the latter saw its funding growing 9.7% YoY to USD 80 million.

• On a QoQ basis, the funds raised in Q3 2023 were 39% lower (down from USD 7.7 billion raised in Q2 2023), mainly due to the massive funding raised by passenger EV makers Lucid Motors (USD 3 billion) and Vinfast (USD 1.5 billion) in Q2 2023.

• Average deal sizes were up across the board, with overall average deal size for Q3 2023 rising 58.6% YoY. The most notable increases were in the Passenger eVTOL Aircraft and Auto Tech industries, which rose about 9x and 6x YoY, respectively. Growth- (Series C and above) and early-stage (Series A and B) funding were not popular and accounted for merely 2% of the total funds raised in Q3 2023. Most of the funds raised were from other stages, mostly led by publicly listed companies raising post-IPO equity and debt financing (accounting for 72% of total funds raised in Q3 2023), which contributed to the higher deal sizes. Seed financing also accounted for 26% of the funds raised during Q3 2023.

• Northvolt’s USD 1.2 billion raised in convertible notes led by the Investment Management Corporation of Ontario (IMCO), BlackRock, Canada Pension Plan Investment Board (CPP Investments), and OMERS was the largest round in the mobility sector during Q3 2023. This was followed by NIO’s USD 1 billion post-IPO debt financing and Aurora Innovation’s USD 820 million post-IPO equity financing. 

• Notably, the top 10 funding rounds for Q3 2023 had a combined value of around USD 4.4 billion (93% of the funds raised during the quarter). Almost all of the top 10 rounds (except for the USD 215 million post-IPO equity raise by eVTOL company Archer) were in the EV Economy and Auto Tech spaces.

Product updates: Autonomous vehicle and safety tech development at the forefront of Auto Tech; growing momentum in EV production

Analyst Take: In the Auto Tech sector, the emphasis was on the ongoing refinement of product hardware and software to usher in innovative features for autonomous vehicles and enhance the safety of the driving experience. For example, GM’s Cruise unveiled a wheelchair-accessible robotaxi, May Mobility updated its self-driving software, and Mobileye launched a camera-only intelligent speed assist system. The dynamic landscape in the LiDAR and other sensors segment also resulted in companies such as Bosch and PreAct Technologies making strategic decisions in response to the challenges and opportunities it presents. As such, innovation and market dynamics would continue to shape the LiDAR segment’s landscape. Companies offering subscription-based driving and safety assist tools also made notable efforts to make the technology accessible to consumers around the world. This includes Mercedes-Benz’s "Drive Pilot" subscription service launch in the US, Ford’s shift to subscription-based ADAS, and Tesla’s’ FSD beta expansion into China. Furthermore, autonomous vehicle leaders including Cruise and Waymo expanded domestically and abroad, emphasizing the industry's commitment to widespread adoption.

In the EV Economy space, two of the four product updates were related to passenger EV manufacturing. In addition, ONE’s breakthrough in LFP batteries might signal an important milestone for future EV battery technology, and the world’s first photovoltaic self-consumption system with a V2G charger by NIO serves as a strong indicator of the promising prospects within the EV charging infrastructure segment.

• We observed eight product updates announced by players in the mobility sector in Q3 2023. These product updates were centered around Auto Tech (six) players, with the rest coming from startups in the EV Economy field. In addition, several players also sought to broaden their geographical reach by launching products and services in new markets. 

• Half of the product updates in the Auto Tech space were in relation to autonomous vehicles
  • Autonomous passenger vehicle developers looked to upgrade their hardware and software to better serve the industry. In fact, GM-backed Cruise revealed a custom-built wheelchair-accessible robotaxi catching up with its rival Alphabet-owned Waymo, which already operates robotaxis with this feature. May Mobility also introduced upgrades to its self-driving software to support its forthcoming fully autonomous operations (i.e., operations without a safety driver on board).
  • Incumbents increased their efforts to develop and deploy autonomous vehicles. For example, Volkswagen established a new subsidiary called Volkswagen ADMT (autonomous driving, mobility, and transport), which would focus on autonomous vehicle deployments—aimed at providing self-driving vans and fleet management software to third-party companies for delivery or ride-hailing purposes. The company began testing the units in Austin, Texas and Munich, Germany in Q3 2023.
  • We also observed several notable developments in the LiDAR and other sensors segment, with companies entering and exiting the market in response to its challenges and opportunities. Notably, PreAct Technologies introduced an advanced, cost-effective LiDAR sensor, underscoring the market's potential, while Bosch's decision to exit LiDAR R&D reflects the recognized complexity and prolonged time-to-market associated with the technology.
  • Most other product updates in the Auto Tech space were in relation to introducing safety and driving assist features for vehicles. Meanwhile, Mobileye announced the launch of the world’s first camera-only intelligent speed assist system; Mercedes-Benz announced plans to introduce its production-ready “Drive Pilot,” a conditional, automated highway driving system, in the US on a subscription basis by Q4 2023; Ford shifted its payment structure of its ADAS, “Blue Cruise,” to offer the technology on a subscription basis like most other automakers (vs. having to opt for the tech at the point of purchase); and Tesla is to introduce its FSD beta technology in China (currently widely available in North America, with limited availability in Europe and Australia).
  • In addition to product updates, autonomous vehicle companies also sought to broaden their geographical reach. Notably, Cruise and Waymo extended their operational presence by initiating robotaxi test programs in multiple US cities. Furthermore, Cruise demonstrated its global vision by venturing into international territory and launching test operations in Dubai.

• Two of the four product updates in the EV Economy space focus on manufacturing passenger EVs
  • A couple of developments underscore the growing momentum and innovation in the thriving EV production sector. Bollinger Motors launched the design validation and announced plans to invest in a manufacturing plant to produce its all-electric Class 4 chassis cabs, while Fisker looked to produce 100 limited edition EVs for the Indian market.
  • ONE reported its LFP battery pack closing the gap in range and mass between it and leading nickel cobalt manganese (NCM) battery packs currently used in EVs. Though this development would not have a major impact on the industry right now, it may mark a major milestone for the future of EV batteries.
  • The other product development in the space was in relation to EV charging infrastructure, with NIO assembling the world's first photovoltaic self-consumption system with a V2G charger in Qilian Mountain National Park in China.

Partnerships: More incumbents partnering to enhance EV charging ecosystem; increasing efforts to develop autonomous and automated driving solutions

Analyst Take:  Siemens and GM have been the most active in the mobility sector, inking four partnership deals each. Most of these partnerships were in EV Economy’s EV charging infrastructure development. In Auto Tech, Mobileye had three partnerships, mostly to offer autonomous driving technology for automakers to develop automated or autonomous passenger vehicles. Furthermore, we noted GenAI making inroads in the automotive sector as well. In Q3 2023, GM and Continental announced plans to use GenAI technologies for conversational content in connected vehicles. No major incumbent partnerships were seen in the Passenger eVTOL Aircraft industry during Q3 2023. However, disruptors partnered to build up infrastructure, while two startups Volocopter and Archer Aviation secured aircraft orders.

• We observed 39 partnerships in Q3 2023, primarily driven by incumbents, where both automotive industry players, as well as tech and electronic companies, were looking to partner up and enhance the mobility experience for users. All the partnerships were limited to EV Economy (20) and Auto Tech (19) in Q3 2023, with product collaborations (30) dominating the mobility sector.

• Three-fifths of incumbent partnerships in the EV Economy industry were in the EV charging infrastructure segment
  • As EV adoption continues to surge on a global scale, nations are compelled to make preparations that revolve around essential infrastructure, particularly the expansion of EV charging networks. The momentum continued in Q3 2023, with a number of notable incumbent partnerships: 1) seven automakers BMW Group, GM, Honda, Hyundai, Kia, Mercedes-Benz Group, and Stellantis announced a joint venture (JV) to build 30,000 charging ports across the US and Canada; 2) E.ON partnered with hypermarket chain Kaufland to install charging points across its store network in Czechia; 3) Schneider Electric partnered with McDonald’s to install charging stations at 10 more McDonald’s UAE locations; and 4) Siemens partnered with electric mobility services provider ENGIE Vianeo to install 64 chargers in France. Disruptor Electra also formed a JV with Energy Infrastructure Partners (EIP) to install charging stations in Switzerland and Austria.
  • In addition to expanding charging networks, we noticed several other partnerships focused on enhancing the user experience of EV charging. Such deals included: 1) BMW, Honda, and Ford joining forces to create “ChargeScape,” a JV focused on optimizing EV grid services for customers, and 2) Tesla adding Honda as another partner to its North American Charging Standard (NACS) vehicle charging ports at Tesla’s Supercharger network, which was opened up for third-party vehicles in May 2023.
  • Chemical and electronic companies such as BASF, LG Electronics, and Panasonic were also seen making efforts toward further development and production of Li-ion batteries for EVs to make units more efficient and affordable. Notably, GM was the only automaker to have collaborated on EV battery development in Q3 2023.

• Auto Tech partnerships focus on developing driver assistance systems (ADAS) and autonomous vehicles
  • Incumbents are accelerating the development and rollout of autonomous vehicles. Toyota established a JV with Pony.ai to produce Toyota EVs integrated with the latter’s autonomous driving software for deployment in China, while Volkswagen partnered with Mobileye to develop self-driving vehicles.
  • Startups too are deploying autonomous vehicles in partnership with authorities. Such deployments include Beep and May Mobility, which partnered with various city authorities in the US to launch their self-driving shuttles.
  • Notable incumbent deals on automated driving functions during Q3 2023 include Tesla’s partnership with Samsung to manufacture next-gen chipsets for its driving assistance technology “Full Self-Driving” (FSD) and automakers FAW Group partnering with Mobileye to power its vehicles using the latter’s automated driving assistance technologies.
  • Furthermore, the automotive industry is incorporating GenAI technologies into its products. In Q3 2023, GM and Continental partnered with Google Cloud to use GenAI to further build conversational AI content including voice assistants and natural language communication in cars, following in the footsteps of Mercedes-Benz, the first automaker to do so in June 2023.

• Disruptors establish the infrastructure necessary for eVTOL operations; two startups secure orders to supply eVTOL aircraft
  • Most of the disruptor partnerships in the eVTOL Aircraft industry have revolved around the setting up of essential infrastructure, including vertiports and operational hubs to support aircraft operations. Many of these agreements in Q3 2023 were formalized with Volatus Infrastructure, a developer of eVTOL infrastructure technology. eVTOL companies such as ACE VTOL, LEO Flight, EHang, and GREENPORT International Airport and Technology Center were among the notable entities that entered into these partnerships.
  • In addition, two companies secured aircraft orders in Q3 2023. Volocopter received an order for two units from Bristow, a company that provides vertical flight solutions (with the option to purchase 78 more); Archer Aviation signed contracts amounting to USD 142 million with the US military to deliver up to six aircraft and provide other services.

Key incumbent partnerships in the EV Economy industry (Q3 2023)

Source: Created by SPEEDA Edge based on company disclosures

Key incumbent partnerships in the Auto Tech industry (Q3 2023)

Source: Created by SPEEDA Edge based on company disclosures

M&A: Siemens and XTI Aircraft make strategic moves in the mobility sector; players go public via SPAC deals

Analyst Take: The only two M&A deals in the mobility sector during Q3 2023 underscore their significance. Siemens’ acquisition of Heliox added fast-charging solutions to its EV infrastructure portfolio, enhancing its commitment to sustainable transportation. Additionally, XTI Aircraft’s merger with Inpixon, with plans to go public, marked a significant development in the mobility sector, highlighting the growing convergence of technology and aviation. Listing via mergers with SPACs continued to be popular in Q3 2023 as well.

• In August 2023, Siemens agreed to acquire Heliox, a Netherlands-based provider of fast-charging solutions for commercial fleets and passenger EVs, to complement Siemens’ charging infrastructure portfolio.

• In July 2023, XTI Aircraft Company, a VTOL aircraft developer, entered into a merger agreement with Inpixon, a developer of real-time location systems (RTLS) (expected to close in Q4 2023). If completed, the deal would take the combined company XTI Aerospace public on Nasdaq.

• Two companies are going public via SPAC deals: VinFast, a Vietnamese EV company (listed on Nasdaq in August 2023) and Horizon Aircraft, a Canada-based developer of hybrid-electric VTOL aerial vehicles (entered into SPAC deal in August 2023; expected to close in either Q4 2023 or Q1 2024).

Regulations: eVTOLs progressing toward commercialization while robotaxis commercialize the tech; government offerings to boost mobility sector initiatives

Analyst Take: The regulatory approvals obtained by three eVTOL aircraft companies, namely, ASKA, Lilium, and EHang, signify a major leap toward the commercialization of urban air mobility. These milestones demonstrate the industry's commitment to safety and compliance, which is crucial for the public's trust in this transformative technology. Simultaneously, the green light given to GM, Alphabet, Pony.ai, and Ford for autonomous vehicle and automated driving tech deployments by the US, Chinese, and German authorities underlines the broader support for advanced mobility solutions, indicating a global shift toward self-driving tech. While these regulatory developments mark a pivotal moment in the evolution of the Auto Tech and air mobility sectors, much will depend on demonstrating that these vehicles are on average safer than when being driven by humans.

• Three eVTOL aircraft companies obtain approvals from different authorities across various regions in a significant step toward eventual commercialization
  • ASKA’s A5 prototype progressed with its US Federal Aviation Administration (FAA)-type certification process, obtaining the certificate of authorization (COA) and special airworthiness certification by the FAA.
  • Lilium completed the fourth and final Design Organization Approval (DOA) audit done by the European Union Aviation Safety Agency (EASA) to become an EASA DOA holder, which is a requirement for aircraft manufacturers, as it confirms that a company has the required organization, procedures, competencies, and resources to design and certify aircraft.
  • EHang’s Unmanned Aircraft Cloud System (UACS) was approved by the Civil Aviation Administration of China (CAAC) for trial operations in the country.

• GM, Alphabet, and Pony.ai secure commercial robotaxi deployment permits in various territories, while Ford expanded its reach in Europe to offer its ADAS system; safety of autonomous vehicles still a major concern
  • GM’s Cruise and Alphabet-owned Waymo received the approval of the CPUC to launch fully driverless commercial robotaxi services in San Francisco around the clock (i.e., without a safety driver). However, autonomous vehicles may still take a while to hit their full potential due to safety setbacks. For example, an incident in which a pedestrian, initially struck by a human-driven vehicle, became trapped beneath a Cruise robotaxi, led the California Department of Motor Vehicles (DMV) to suspend Cruise’s driverless vehicle deployment permit in October 2023—impacting its commercial plans. The incident is also under a separate investigation by the National Highway Traffic Safety Administration (NHTSA) at the federal level. Pony.ai received approval to conduct fully driverless commercial robotaxi rides in Beijing, while GM also obtained approval to test Level 4 autonomous driving technology in China (i.e., fully autonomous vehicles limited to specific locations and/or conditions).
  • Ford expanded its “BlueCruise,” a suite of Level 2+ semi-autonomous driving features, to Germany (i.e., Level 2 refers to vehicles that can control both the speed and the steering but require a driver to be present, maintaining full vigilance). This marks the second European country, following the UK, to approve the system.

• The US and UK authorities look to fund mobility-related projects during the quarter to enhance EV and self-driving tech adoption
  • The US Department of Energy (DOE) announced a USD 15.5 billion package of funding and loans to convert existing factories for the production of EVs under President Joe Biden’s “Investing in America” agenda.
  • The UK's Centre for Connected and Autonomous Vehicles (CCAV) allocated GBP 18.5 million (USD 23.3 million) for 13 projects related to self-driving technology to promote green technology and job creation.

Appendix

01. Notable incumbent partnerships across mobility sector