The mobility sector is getting serious about sustainability. There is a growing range of attractive future opportunities in “sustainable mobility” for investors and startups, which have been accelerated by the recent pandemic.
In the past year, where working from home has become the norm, travel has seen a major decline. Now when people do move around, they are increasingly choosing more sustainable options, with some of the most popular ones being electric cars and e-scooters.
Baloise recognised that sustainability is an important, growing trend in mobility. Accordingly, to identify (sustainable) market opportunities to invest in, our mobility team did extensive research on this subject in the first half of 2021. During the research, we identified a number of unique topics and businesses beyond the known trends of electrification and sharing, which hold interesting and emerging investment opportunities. Our top-3 picks are...
As the first generation of electric cars and micro-mobility are now approaching their end of life, many car manufacturers have noticed and started big projects, partnering up with energy companies to give these batteries a second life. Nissan, was one of the first major automakers to pilot second-life EV (Electric Vehicle) batteries in a grid-scale storage installation in 2015. Meanwhile, Daimler announced plans to build a 13-megawatt-hour second-life battery storage unit at a recycling plant. Mercedes Benz Energy also teamed up last year with Beijing Electric Vehicle, one of China’s largest EV makers, to build an energy storage system that uses retired EV batteries.
Some startups are also making the most of this opportunity. Bikefusion for example takes used parts and components to create electric bikes. Nevertheless, these sorts of upcycling projects are still in their early days, and investing is still considered risky, especially as battery technology is still developing.
The number of cities across Europe that restrict diesel cars continues to grow. Some of the bigger cities like London, Paris and Amsterdam are announcing even further ambitions to completely ban combustion engine cars. The fleet of ‘old’ cars can be expected to grow in the next few years, as people shift to owning, sharing, or subscribing to electric vehicles as well as other mobility solutions.
Meanwhile, in the bus sector, several efforts such as by Etrofit are underway to replace old combustion engines in existing buses with electric ones. As for passenger vehicles, some boutique companies provide a similar service, usually specialised in specific makes and models (including vintage cars).
Nevertheless, there are still major challenges to overcome. Responsibility for maintenance and warranty after the retrofitting are still issues, and the price for consumers is still extreme with prices currently starting at €50.000! Therefore, the cost and price will need to go down considerably before this concept appeals to a large market.
It’s very likely you’ve seen charging stations appear on your local streets. In fact, as the use of electric cars is on the rise, key industry players are trying to keep up with this growing demand.
Daimler and Volkswagen to name a few, are investing large amounts into charging infrastructures. Likewise, new companies such as JustPlugin who provide modular and complete charging-as-a-service solutions are also appearing. Indeed, around offices and homes, the number of charging points is growing rapidly. Meanwhile, in the retail space, innovative solutions are also being introduced. Ikea for example is combining electric car charging with their Family Loyalty Card.
However, in more public spaces like city centres, establishing this charging infrastructure is much slower. Indeed, many cities are hesitant to populate public spaces with charging points. In response, some ventures are offering more promising, mobile solutions. NIO, which provides mobile charging in a van, to get your EV charged anywhere or, Nimbee, which is piloting their mobile charging unit this summer.
It is still unclear if mobile charging can become profitable in the European market with some domains (like charging hardware) being already largely been claimed by big players. Even so, charging is still an interesting opportunity area…
There were also other attractive opportunity areas Baloise identified during the research.
One area is the maintenance of e-bikes, which are more expensive and complicated to maintain than traditional models. Currently, the focus of bike players is on sales and getting supply to meet this surge in demand but, it will only be a matter of time before these e- bikes need maintenance. Meanwhile, predictive maintenance of cars is another growing area and has in fact been a promising opportunity for cars for quite some time. New cars can have telematics built-in, and open platforms are being introduced with the support of European regulation.
While opportunities in sustainable mobility are increasingly attractive, success is also dependent on external factors. For some solutions (like vehicle-to-grid, or vehicle-to-vehicle charging) major energy infrastructure upgrades are required, and in-car technology needs to become more standardised and more open. Still, with the growth and market dynamics going on, sustainable mobility remains a topic to watch for opportunities.
Baloise is constantly on the search for interesting, sustainable opportunities to invest in. If you are active in this space, have ideas, or are looking for funding, we would love to get in touch!