Impact of COVID-19 on the Investments in the AV Ecosystem
Tags: Automotive, Autonomous Cars, Automation, Self Driving Cars, Covid 19

What is the impact of COVID-19 pandemic on the investments and funding in the ADAS and AV industry? This year 2020 has been a major setback to the automotive industry followed by its corresponding sectors. The new passenger vehicle sales have declined drastically in the first half of 2020 causing a major shrink to the global economy.

These falling trend is attributed to the lock-down imposed in the major cities of many countries to control the spread of pandemic. This has resulted in the worst fall in GDP and increased trade tensions. However, regardless of this pandemic crisis and economic tension, the innovations and technology advancements have witnessed a steady trend of investments.

Autonomous driving and electric vehicle technology have been on the target of investors despite of the corona crisis.

However, the venture firms and capitalist have seen adopting the slower and selective funding procedures. Hence, according to the investments report of the first half 2020, investments are taped to decline in the regions of North America and South Asia. Europe is not spared from this as well. The AV industry has received the funding of nearly ~$4 billion in the next three months i.e. April, May, and June 2020. Conclusively, the first six months of 2020 witnessed a steady investment trend in autonomous vehicle technology development amounting around $7.2 billion.

The largest funding in this first half of 2020 was by Waymo. The company has raised its first external funding of $2.25 billion in the month of March followed by the additional $750 million in May, extending the total external funding to $3 billion. Didi Chuxing Technology Co. is the only ride hailing company that received fundraising in H1 2020. The investment of $500 million to Didi’s autonomous driving subsidiary was led by SoftBank Group’s Vision Fund 2 in the month of May. Despite of the lowest revenue generation from vehicle sales, OEMs like Volkswagen and Toyota have seen to be aggressively increasing their investments in development of AV technology. Volkswagen has closed its funding to $2.6 billion in Argo AI on 2nd of June, while Toyota led the series B funding round of Pony.ai by investing $400 million in the month of February.

Tier-1 and automotive suppliers are also actively involved in the funding rounds of several autonomous driving technology start-ups. For instance, in mid- June, Aisin Group through its corporate VC fund has invested undisclosed amount in Seoul based company StradVision developing vision processing software for AVs. In March, the LiDAR provider Blickfeld has completed its series A funding round led by venture capital unit of Continental. Another LiDAR solution provider Cepton Technologies has raised $50 million in series C funding led by South Korea based Tier-1 supplier Koito Manufacturing Co. in February. Also, NXP Semiconductors N.V. has invested €8 million (approximately US$9 million) in Kalray with an intent to jointly develop a scalable solution for AVs using Kalray’s intelligent processors.

Moreover, the emerging AV tech start-ups in the field of LiDAR sensor, artificial intelligence, simulation and validation, connectivity platform, computer vision, and AV software have secured funding in this first half of 2020 with an aim to accelerate their technology development, research, and implementation.

In the month of June, Beijing Jingwei HiRain Technologies Co., DriveU.auto, AIMotive, Locomation, Code42, and Otto Motors have received cumulative investments of ~$101.5 million.

There were no investments recorded in the month of January; apart from the announcement from GM that declared its plan to invest $3 billion for production of all-electric trucks and SUVs, as well as an autonomous vehicle.

Clearly, the funding and investments shows that the pandemic has not deviated the path of the automotive industry towards achieving the dream of self-driving cars.