Lately, there’s been a lot of talk on the Internet about how the global demand for cars will sharply decline in the coming years and how the internal combustion engine might soon be a thing of the past. But at the same time, it seems that a new trend is all set to take over the automotive world. In fact, it’s a trend experts have been investing in already for the past few years.
Joey Kyber/Unsplash | The latest trend to overtake the world of investing is Smart Cars Technology
If you haven’t guessed it yet, we’re talking about “Smart Car Technology.” Technically equipped automobiles and their usage is rapidly evolving, which implies that the demand for such cars has already picked up pace globally. Let’s delve a little deeper.
Why investors are turning to smart cars
There are two major reasons why people are investing in smart car technology.
Brock Wegner/Unsplash | Investors think of it as a good option since they believe people will never stop traveling in cars, but their preferences with respect to features and designs may evolve
The first is that even though the demand for cars, in general, is coming down (as pointed out earlier), fewer cars doesn’t mean people will stop traveling in personal four-wheelers altogether. This is especially not going to happen in the developed world, where more than 75% of households own cars.
The kind of cars they use can (and in all probability will) be different though, and vehicles will continue to evolve with newer models replacing the existing fleet. This essentially means that the companies that supply technology to these vehicles will continue to benefit from the increasing demand for the latest tech used in future cars.
The second reason is that automobiles are evolving towards safer, more connected, and less polluting avatars. The demands being made by consumers and regulators are having a significant impact on how cars are designed with each passing year.
The components are now becoming more integrated, complex, and much lighter in weight. This implies that the higher intellectual property content is translating into a bigger difference amongst component systems and larger pricing power for the manufactures. As a company gains more power over its products, naturally, potential investors get interested in them.
Why Kei/Unsplash | Following changing customer demands, automobiles are evolving towards safer, more connected, and less polluting avatars
What now
The pandemic has added another layer of complexity to investors of the mobility industry. During this time of uncertainty, it is essential for all stakeholders, including tech giants, incumbents, and investors, to better understand the dynamics of the market.
This can be done by analyzing the investments being done in the underlying technologies. In simpler words, the ideal way to understand the current highly volatile mobility market is by following the investment being done and keeping up with the upcoming technology.