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Mobility tech VC funding steers toward 6-year low as electric vehicle stocks limp

Venture capital investment in mobility tech—including electric vehicles, self-driving technology, fleet scooters and delivery robots—has plunged after flourishing in the bull market.

Investor appetite for mobility tech—including electric vehicles, self-driving technology, fleet scooters and delivery robots—has plunged after flourishing in the latter years of the bull market.

This year, US-based mobility tech companies have raised $6.1 billion total across 191 deals, according to PitchBook data. That’s a far cry from the $21.6 billion and 422 deals the vertical garnered in 2021. That puts total deal value in the sector on track to be just over 70% off the peak year and its lowest since 2017.

 


VCs have soured on the vertical in large part because the stocks of EV and autonomous driving companies that went public in recent years have performed “miserably,” according to Jonathan Geurkink, a PitchBook senior analyst covering mobility tech.

Truck manufacturer Rivian‘s stock is down more than 83% since its IPO in November 2021. Shares of Nikola, another EV vehicle developer, have lost more than 90% since its SPAC was announced in March 2020.

“All these companies came along in the wake of Tesla’s success, but they are realizing that [building cars] isn’t just like writing an app and putting it up in the cloud,” said Geurkink. “Disrupting the auto industry—it’s not that easy.”

While VC rounds for US-based EV manufacturers have all but disappeared, companies targeting batteries have gained traction. In Q3, EV battery recyclers Redwood Materials and Ascend Elements closed rounds worth $997 million and $460 million, respectively, according to PitchBook data.

“The other big gorilla in the room is China. China spent decades locking up a lot of the key materials and parts of the supply chain for the EV industry,” Geurkink said. “People are looking at the competitive landscape and thinking ‘why would I want to invest in EV manufacturers?’”

Companies developing autonomous vehicles and their parts haven’t fared much better. The stock price of autonomous trucking company TuSimple is down nearly 98% since its 2021 IPO. Last year, Volkswagen- and Ford-backed Argo AI shut down after failing to attract new investors in its autonomous driving systems. Argo had previously received $2.6 billion in venture funding.

The industry received a further blow last week when General Motors-owned Cruise announced that it is recalling 950 robotaxis after one collided with a San Francisco pedestrian in October.

While the promise of full-fledged autonomous driving will likely be on ice for years to come, Geurkink believes it’s possible to extract some value from these technologies.

“We’ve had massive investments in this area, and we’re now at the phase of picking it apart and for specific use cases,” he said.

Geurkink pointed to companies like Gatik, an autonomous commercial fleet startup working with Walmart to travel routes between certain stores and distribution centers. In 2022, Gatik raised a $159 million Series C at a valuation of $810 million. The deal was a meaningful step up from its 2021 Series B post-valuation of $307 million.

Featured image of a Ford Argo AI test vehicle by Jeff Kowalsky/Getty Images

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