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Even in the face of significant headwinds, the auto industry’s dealmakers have continued to stay busy. The emergence of new technologies continues to transform the M&A market, and automakers who want to stay competitive need to transform at the same speed. In fact, a report from Bain & Company found that range deals— in which companies break into a new market or acquire new capacity — now accounts for about 70% of auto and commuting transactions over $100 million.
to make this practical Building In terms of turbulence and innovation, 2023 promises to be a new year for a paradigm shift in the automotive field. The automaker of the future will do more than just build the car you drive – it will enhance your entire in-car experience.
So what does this mean for auto M&A in 2023? Find out when we release our 18The tenth November annual outlook report. Here’s a sneak peek at three big trends to watch:
- Emissions decrease, demand increases
Digital transformation has highlighted consumer need for game-changing technological capabilities, and OEMs across the board are responding by increasing their investment in electric vehicles. Between the recent rise in gas prices and increased awareness of climate change, sales of electric vehicles will continue to skyrocket. In the M&A market, expect to see more consolidation between traditional OEMs and technology suppliers – such as Endurance Technology taking a majority stake in Maxwell Energy Systems.
- Future driver…nothing? Despite persistent questions about their safety and feasibility, self-driving vehicles continue to move forward in popularity – by 2030, the global autonomous vehicle market is expected to reach $1.8 trillion. In an effort to make these vehicles more commercially available, expect to see more deals between legacy automakers and independent technology companies — like General Motors increasing its majority stake in Cruze. As new research continues to advance the technology behind self-driving vehicles, we anticipate a massive increase in M&A transactions focused on the growing need for robust internet and data security measures, and companies increasing their investment in ACES (Autonomous Driving, Connectivity, Electricity, Shared Mobility) technologies.
- Electric vehicles are no longer new
2023 won’t be the year electric cars take center stage – they’ve held that spot for quite some time. It’s the year your friend’s new electric or hybrid car stopped being a moot point. But one of the biggest obstacles preventing electric cars from getting everywhere is the infrastructure around them. This will not be the case for long. According to research from Reuters, global automakers plan to invest more than half a trillion dollars in electric vehicles by 2030. Next year, we can expect a significant increase in policy support for electric vehicles, leading to more investments in the public charging network, digital services and government incentives to lure consumers away from gas-powered vehicles.
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