Corporate investors pile in electric car startups

DETROIT (Reuters) – Corporate investors from outside the automotive industry are placing an increasing commitment to electric vehicles, which compete with automobile manufacturers and suppliers to bankroll the startup of companies that work on everything from advanced batteries to the charging devices and all the new EVs.

FILE PHOTO: A Chevrolet Volt plug-in hybrid vehicle is charged at Stewart Chevrolet in Colma, California, USA, 3 October 2017. REUTERS/Stephen Lam

About 250 startups that are involved in a particular aspect of the electrification of more than $20 billion in venture capital, in particular from a wide range of companies in various industries, according to a Reuters analysis of publicly available data.

“Electrification will be a number of economic changes in the traditional value chain in and around vehicles,” said Reilly Brennan, director of the San Francisco-based Trucks and Venture Capital.

As a result of these changes, in addition to the funding EV development, investors see the revenue opportunities in related markets, such as consumer products and home energy, Brennan said.

These options are supported by steady improvements in the lithium-ion battery energy, which forecasts a peak in the fleet electrical center of the global fight against fuel consumption and emissions of a traditional internal combustion engine.

Large oil companies such as BP PLC Royal Dutch Shell PLC, see EV-related investments, partly as a hedge against the dwindling demand for fossil fuels for private vehicles, according to venture investor Evangelos Simoudis, managing director of Synapse ners.

But they also see an opportunity for the electric car charging stations now dispense petrol and diesel.

Simoudis, who advises corporate executives on new mobility innovation strategy, said aerospace companies have an interest in startups working on advanced battery systems: “Boeing and Airbus are both working on electric aircraft.”

Large telecommunications companies such as Verizon Communications Inc will play a role in the connected electric vehicles, while semiconductor manufacturers like Intel Corp Qualcomm Inc see their computer chips are used in an increasing number of applications in the future electric and self-driving vehicles, Simoudis added.

By far the most active corporate investor in electrification so far is Intel, that a backup battery startups Prieto, Qnovo and Enovix and the charging of startups WiTricity and Chargifi.

The global car manufacturers are heavily invested in battery startups. The area includes General Motors Co, BMW AG, Mercedes-benz, Renault SA, Nissan Motor Co, Hyundai Motror Co and SAIC Motor Corp

Outside the auto industry, corporate investors in the battery startups are technology companies, Samsung, and Motorola Solutions Inc and energy company Schlumberger NV.

Dozens of startups focused on EV charging and infrastructure are funded by many of the same corporate investors, including Chevron Corp and ABB AG [ABB.UL].

Related Coverage

  • Factbox: Corporate investments in EV-startups

The greatest interest of investors, but is in the EV start-ups. There are more than 50 in total, including a number of high-profile and well-funded Tesla wannabes based in China.

Corporate investment in China is startups has come from the big Chinese companies like automaker FAW Car Co. and battery maker, Contemporary Amperex Technology Co., supported Byton; car maker Zhejiang Geely Holding Group [GEELY.UL] and technology company Baidu Inc., which funded the WM Engine, and the internet giant Alibaba Group Holding, which has invested in Xiaopeng Engines.

In the United States, GM and BMW have supported Proterra, the electric bus maker, while Caterpillar Inc., which is best known for heavy construction equipment, has invested in Henrik Fisker’s latest electric vehicle project, Fisker Inc.

Reporting by Paul Lienert in Detroit; Editing by Tom Brown

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