Even in the face of considerable headwinds, dealmakers in the automotive industry 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 just as fast. In fact, a report from Bain & Company found that scope deals—in which firms penetrate a new market or acquire a new capability—now represent about 70% of automotive and mobility transactions over $100 million.
For an industry that's practically built on disruption and innovation, 2023 promises to be another paradigm-shifting year in automotive. The automaker of tomorrow will do way more than simply manufacture the car you drive—it will enhance your entire in-vehicle experience.
So what does this mean for automotive M&A in 2023? Find out when we release our 18th Annual Outlook report in November. Here's a sneak peek at three big trends to watch out for:
- Emissions get lower, demand gets higher
The digital transformation has illuminated the consumer's need for game-changing technological capabilities, and OEMs across the board are responding by increasing their investments in the EV space. Between the recent spike in gas prices and increased awareness of climate change, electric vehicle sales will continue their meteoric rise. In the M&A market, expect to see more consolidation between traditional OEMs and technology suppliers—like Endurance Technology acquiring a majority stake in Maxwell Energy Systems. - The driver of the future is... none? Despite ongoing questions around their safety and feasibility, driverless vehicles continue to zoom ahead in popularity—by 2030, the global autonomous vehicle market is projected to hit $1.8 trillion. In an effort to make these vehicles more commercially available, expect to see more deals between legacy automakers and autonomous technology companies—like GM upping its majority stake ownership in Cruise. As new research continues to advance the technology behind autonomous vehicles, we anticipate a huge increase in M&A transactions focusing on the growing need for strong cyber and data security measures, and firms increasing their investments in ACES (autonomous driving, connectivity, electrification, and shared mobility) technologies.
- EVs are no longer a novelty
2023 won't be the year that electric vehicles take center stage—they've held that spot for quite some time. It's the year that your friend's new electric or hybrid vehicle ceases to be a talking point. But one of the biggest hurdles preventing electric vehicles from reaching ubiquity is the infrastructure around them. This won't be the case for long. According to research from Reuters, global automakers are planning to invest over half a trillion dollars in electric vehicles by 2030. Next year, we can expect to see a significant increase in policy support for EVs, resulting in more investments in a public charging network, digital services, and government incentives to lure consumers away from gas-powered vehicles.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
