Beyond making Elon Musk the richest person in the world, the convergence of the auto and tech industries is producing a plate shift of epic proportion. A ripple effect will be many years of future M&A as this autotech market develops.
That’s the finding in a recent report from Hampleton Partners, a London-based M&A and corporate finance consultancy. Hampleton tracked 64 M&A transactions in the first half of 2022 in the auto tech & mobility industry, which among other things, it says represents an all-time high for the sector.
“Automotive megatrends are converging to definitively transform the global auto industry. Traditional industry players that fail to keep up with these tectonic trend shifts will inevitably be left behind,” says Michel Annink, a director at Hampleton. “Apart from the shift to electric propulsion and vehicles increasingly becoming software-centric, automotive business models are also changing, spurring global M&A activity in the retail and after-sales segment and further major investments in what promises to be the next major disruptive force: autonomous driving.”
The report breaks down M&A activity across four subcategories: Enterprise Applications, Internet Commerce & Content, Embedded Software & Systems, and Mobility & Fleet Management.
Electric Vehicles, Autonomous Vehicles, and EV-related infrastructure are leading the charge for future M&A, the report predicts. Global year-over-year growth for electric vehicle sales in 2021 saw a 112 percent increase year-on-year and has shown a notable increase in consumer adoption over the last few years.
As a result, EV charging and related infrastructure represent a market brimming with opportunity. In the past year over $4.8 billion was injected into the industry as a result of roll-out announcements, debt financing, investment, and M&A, the report says.
“The impact of societal forces around sustainability, e-mobility and customer experience combined with accelerating technological innovation in the automotive sector bodes well for an active M&A environment,” Annink says.
What’s your view on the Autotech market? Do you share in the report’s optimism for future M&A? Let me know your thoughts at [email protected]