Welcome to our end of summer blog. As the seasons transition, it’s time to reflect on the mobility investment banking sector and the broader automotive industry. There are some things that have been rattling around the old melon for a while, so this is the month to clear those out and make space for some new things.
One pressing topic that’s caught our attention? Autonomous driving.
Y’all are doing autonomous driving wrong
It turns out the problem with autonomous driving isn’t the technology, or the weather, or the infrastructure, or the exorbitant cost of the technology, nope, the problem all this time has been you.
Yes, you, the living, breathing, thinking, sentient human driver. We just don’t like autonomous vehicles enough. Every few months it seems there’s a survey showing consumers are cool to autonomous vehicles, like this one from AAA that says 68% of drivers are “afraid” of self-driving vehicles.
That’s a problem because a lot of money has been spent (wasted?) on autonomous technology. Two of those big spenders, Cruise and Waymo, recently took to the digital airwaves to suggest you weren’t appropriately appreciative of their big spending.
And that you’re all bad drivers. Cruise ran a newspaper ad that said “You might be a good driver, but many of us aren’t.” I suppose they deserve credit for admitting they’re bad drivers, but the 86% of us who are great drivers don’t appreciate the insinuation. Some critics took issue with citing traffic fatalities, saying the use of the “pain and suffering of those deaths for self-promotion of an unproven and unsafe product is unscrupulous.”
We humbly suggest a more effective strategy would focus on convenience, or the value proposition. You’re setting a pretty high bar for yourself to say your product will save lives.
What if the cash wasn’t all wasted?
But what if the benefit of all that money spent on level 5 is staring us in the face: safety tech that’s achieving the goal level 5 was supposed to achieve? There isn’t just one path to reducing traffic fatalities.
Just off the top of my head, better driver education, including teaching car control, and weaning people off their cell phones when they’re driving would be huge, make that capital HUGE. But we’ve wound up with some pretty nifty automotive technology that solves some real problems and nuisances.
Oh, and surveys show consumers love safety features. S&P Global’s June 2023 mobility survey show high levels of trust in things like collision warning, blind spot monitors, night vision, and more.
There are lots of ways to slice and dice transportation statistics but do an internet search and you’ll find a lot of reports that say most vehicle trips are under 10 miles, like this one. So if most of our trips are short, do we really need our cars to drive for us?
Heaven help us if we do.
I always thought the buying public would be content with technology that made parking easier, gave them some help seeing in bad weather and at night, and that made long distance driving less of a hassle, i.e. when you’re on I-95 cruising at a totally legal speed limit and all of a sudden you have to slam on the brakes because a truck tried to pass on an incline and caused a slowdown that takes 45 minutes to clear.
I bet a warning that a slowdown is imminent and some low-speed adaptive cruise control to navigate the slowdown would make most people happy.
Getting trendy yet?
The eagle-eyed contrarians out there might have noticed a March 2023 article in the UK’s Autocar about Citroen bringing back gas and diesel powered versions of a car that had gone all electric (the non-Americanized version goes like this:
Citroen brings back petrol and diesel Berlingo MPV due to demand and filed it away in the “Hmm, I wonder if this will happen again” portion of your brain. We’re not ready to call it a trend yet, but definitely worth remembering, especially when you hear things like Porsche rethinking plans to scrap its ICE-powered Macan, the vehicle that accounts for a third of the company’s U.S. sales.
Who doesn’t miss Bob Lutz?
I recently fell down a rabbit hole and was surprised this Detroit Bureau post came from January 2010: “The problem is that ever-toughening government regulations may create a disconnect between what buyers actually want and what the industry will have to offer, Lutz warned.
A sharp increase beyond the already tough 2016 fuel economy mandates might mean, “We’ll have to sell more electrified vehicles, even if the public doesn’t want them.”” Sometimes the customer is wrong, and sometimes the customer is right.
The Memory Hole
Remember when the co-founder of Lyft predicted a majority of their trips would be autonomous by 2021? And that private car ownership would be all but ended by 2025 in major cities?
Such bold predictions captured the attention of many in the mobility investment banking realm. Yet, as we delve deeper into the era of technological advancements, the line between ambitious foresight and reality blurs. It’s crucial to discern between what is feasible and what remains an aspirational goal in our rapidly evolving industry.
Driving Forward: Navigating the Capstone Automotive Industry
As the horizons of the automotive world expand, it’s evident that strategic thinking and solid investment strategies are more critical than ever. Mobility investment banking, especially in the realms of M&A transactions, can be the guiding light in navigating this complex landscape.
With Capstone M&A’s vast experience, executing over 150+ M&A transactions within the automotive aftermarket and autotech space, we offer an unmatched blend of knowledge, speed, and value. Whether you’re considering an acquisition, exit, or fundraise, our expertise ensures minimized delays and maximized returns.
Interested in steering your automotive venture in the right direction? Let Capstone be your trusted navigator.
Reach out to us today and embark on a journey of unparalleled success.