Analyses
29 sep 17

Car makers invest $billions in ACES start-ups

Vehicle manufacturers are involved in a ‘land grab’ of the new mobility world, investing in or buying start-up companies that threaten to transform the way both company and private drivers travel.

The twin prospect of autonomous vehicles and mobility solutions is rapidly changing the automotive landscape, and car makers are prepared to spread their bets to ensure they cover all potential bases, or ACES - autonomous, connected, electric, and shared.

Business analytics company CB Insights calculated that OEMs invested more than $1billion last year on auto tech companies that specialise in the sensing hardware and vision technologies necessary for driverless cars, and more than $2billion in electric vehicle technology.

Casting their nets even more widely, manufacturers are also taking stakes in companies that offer alternatives to traditional fleet or private car ownership.

Toyota, for example, has made a strategic investment in Uber; Volkswagen has bought a $300 million share of Gett (formerly GetTaxi), a global ride hailing provider); and General Motors paid $500million for a stake in Lyft as part of a long-term strategic alliance to create an integrated network of on-demand autonomous vehicles in the US.

“We see the future of personal mobility as connected, seamless and autonomous,” said Dan Ammann, president, GM, adding that GM believes it can achieve this vision more rapidly by working with Lyft.

New Mobility modes
Other manufacturers are casting their nets beyond the traditional car world. Ford is moving into bikes and buses, launching bike share service GoBike, in collaboration with Motivate, and acquiring Chariot (pictured), a crowd-sourced shuttle service aimed at commuters. According to a KPMG study, every Chariot in operation can remove about 10 cars from roads, so at first glance this appears an unusual move for a car maker.

But the blue oval is not alone. BMW i Ventures is tasked with investing in cutting-edge solutions for BMW’s current and future business, and among several investments has bought stakes in both Rever, an app and website for motorcyclists, and RideCell, a software company focused on helping firms, mass transit agencies, and car sharing services to manage their vehicles.

So why are manufacturers partnering with start-ups rather than going it alone?

As BMW iVenture said, “We bring together the best of two worlds: the brand and engineering power of BMW with the agility and innovation of startups.”

Copyright: Ford

 

 

Authored by: Jonathan Manning