How Advances In AI And AV Boost Mobility Sector Funding

After two years of somewhat flat funding, mobility technologies and services are starting to attract investment again. Funding in 2024 — the basis of the 2025 Mobility Investment Radar — saw a US$10 billion spike, pushing the global total to $54 billion. That’s the highest it has been since 2021 when it hit a record $88 billion and the second highest ever.

The world of innovative mobility has changed considerably since we started the Radar in 2017. To account for the many players within our database of 20,000 companies that would no longer be considered startups, we changed the name of the report in 2025 to the Mobility Investment Radar from the Mobility Startup Radar. We have maintained the same database and methodology so that this Radar can be compared to our earlier annual reports.

Exhibit 1: Global mobility funding per year

In US $ billions

Now in its seventh edition, the Mobility Investment Radar presents an in-depth analysis of the evolving landscape of global mobility startups. It tracks four technology categories: mobility services, which includes ride-hailing, carpooling, and other on-demand services; sustainable mobility, including electric vehicles, battery production and recycling, and charging; connected and self-driving solutions, including both hardware and software; and sales and after-sales, which includes online marketplaces, financing, dealership services, and insurance.

Sustainability leads 2025 funding — electric and autonomous vehicles drive growth

Sustainability received the most funding in 2024 with $19.6 billion. Six of the 10 highest funded enterprises were working on electric vehicles (EVs) or charging capacity. While the highest funded category, sustainability was still 21% below the category’s 2023 funding when significant investment flowed into Chinese EV manufacturers.

In the United States, many greenfield projects in such areas as battery production and recycling were already started in 2023 using Inflation Reduction Act (IRA) incentives, taking some of the steam out of the category. Among newcomers to the sustainability category last year were upstream suppliers of electric powertrains and other EV and autonomous vehicle (AV) component makers, as well as charging capacity startups looking to expand from regional players to multinational providers.

Exhibit 2: Mobility funding segment comparison

In US $ billions

US and Chinese AVs may be headed in different directions

The connected and self-driving sector experienced the biggest growth among the categories — thanks to recent advances in artificial intelligence (AI), particularly in China. Total funding reached $18.2 billion — double what it reached the year before.

This was driven by substantial funding for larger, established self-driving frontrunners in the US and overall investor excitement about the AV future in both the US and China. While the US has some of the bigger AI and AV players, China has a much more deregulated environment for testing AVs.

Because of these differences, as well as restrictions on sales of semiconductor chips between the US and China and other geopolitical concerns, two separate autonomous driving networks seem to be developing in China and the US. This could make it harder for players who want to sell into both markets if the ecosystems end up not being compatible.

Exhibit 3: Mobility funding by country

The rise of ride-hailing in emerging markets

The mobility services category jumped 89% this year, although the increase was off a low base in 2023. Much of the new money went to developing ride-hailing and vehicle-sharing in emerging markets.

The sales and after-sales category rose 9% to $4.8 billion, although it still is smaller than it was in 2019 and at the beginning of the decade. The main business models attracting funding are focused on providing more flexible financing solutions that leverage additional datapoints or use the car equity as security for credit cards.

The US dominates mobility and sustainability investments

Regionally, the Americas — and specifically the US — dominated the funding rounds, receiving almost 56% of the total and almost $20 billion just for sustainability and connected and self-driving businesses alone. The Americas’ total of $30.1 billion for the year was almost 54% higher than the $19.6 billion raised the year before.

Sustainability still got a boost from the IRA in 2024, which has energized the US EV sector since its passage in 2022, but the money was less than in 2023. The category’s funding is also likely to come to an end or at least curbed with the inauguration of Donald Trump who has pledged to repeal Biden administration initiatives designed to fight climate change.

Overall, the mobility sector may benefit because of current low interest rates, which are expected to increase the number of initial public offerings (IPOs). The Trump administration’s emphasis on deregulation may also open new funding opportunities in areas such as autonomous driving if restrictions on testing loosen up.

The Americas also overshadows other regions when it comes to connected and self-driving as commercialization prospects for the technology became more real as the number of weekly paid US rides reached into the six digits for the first time in 2024. The region attracted $10 billion in the category, with the next closest region, Asia, at $6.6 billion. Europe only raised $1.5 billion.

Mobility and tech funding trends across Asia and Europe

Conversely, overall funding in Asia saw a slight decline, dropping to $17.1 billion, a decrease of $800 million, or a little more than 4%, versus 2023. Asia’s share of the global total dropped to about 32%. For the last decade, it had previously been between 35% and 45%.

While sustainable mobility funding in Asia declined by 42%, investments in connected and self-driving technologies rose 127%. This mirrored the impressive 130% growth in the Americas. Chinese enterprises raised the most in the region, at $11.2 billion. That was followed by Vietnam with $3.5 billion, and India at $1.5 billion.

Overall, Europe experienced modest growth of 6% to $6.9 billion compared with 2023. The region accounts for 13% of the global total. The growth in Europe was largely driven by Spain and France as regional charging enterprises collect funding to expand networks internationally, while the United Kingdom saw a drop of $1.6 billion in investment dollars.

Despite the dip, it’s important to note that the UK has positioned itself as the European leader for autonomous vehicles with local startups collecting more than $1 billion in funding in 2024. This could give the UK a boost in future Radars, given the enthusiasm around AVs.

Exhibit 4: Global average funding round size

In US $ millions

New startups get overlooked in rush to scale mature tech

But while the story is basically a positive one for mobility, there is one concerning trend: As the sector matures, investment is tending to flow toward more established businesses. Funding rounds are getting bigger and fewer in number and go toward companies with proven business models and demonstrated long-term viability.

Another problem has been a lack of an exit strategy with insufficient IPO activity in the face of the last two years’ higher interest rates post-COVID-19. This situation has prevented more mature companies from going public and freeing up money for early-stage startups. The tightening of funding options, particularly for Series A and B rounds, may stifle innovation, causing many promising ideas from emerging companies to struggle to reach commercialization. This reflects more conservative investor criteria.

The number of funding rounds decreased 30% versus 2023, but there was a significant increase of 75% in average funding per round, which reached $78 million. That is the highest value ever — even exceeding average funding per round in the record year of 2021. The significantly higher average funding reflects the magnitude of the capital expenditure needed by more mature enterprises to scale such new mobility as EV, battery, and AV production.

2025 is a potentially pivotal year for autonomous driving

Overall, while the amount of money pouring into the sector rose, the emphasis has been on maturing technologies and proven business models among electric, connected, and autonomous vehicle businesses rather than on nurturing upstarts with untested ideas. The new commercial scale in more mature mobility enterprises is unlocking what could turn into large ecosystems, including upstream suppliers of both hardware and software for EVs and AVs, to support these expanding technologies.

Within the mobility world, the focus over the years to come seems to be less about disrupting how people move but rather about reaching commercial scale for technologies already deployed in pilots all around the world, such as AVs, EVs and Urbain Air Mobility. A new wave of anticipated IPOs could support in pouring money into the market. Given lower interest rates, that could happen this year.

Mobility Investment Radar Deep Dives

An in-depth look at the key trends in mobility investments, funding shifts in Asia and Europe, the role of data, and the surge in financial services innovation. Click our deep dives to learn more.

The mobility sector is undergoing a transformative shift with the emergence of new types of suppliers, particularly those focused on data-driven business models. These business models range from data generation for developing and deploying sensors to data structuring that enables artificial intelligence (AI) training, to data contextualizing that unlocks and analyzes telematics data. These innovative models are crucial for the realization of the value of data collected across various use cases, with a significant emphasis on enhancing autonomous driving capabilities. Over the past few years, funding for data-driven business models has surged dramatically, with a compound annual growth rate (CAGR) of 45% between 2020 and 2024. This trend highlights the increasing recognition of data's role in shaping the future of mobility.

The largest flows of funding are directed toward solutions that assist players in enhancing their research and development efforts. The rapid adoption of generative AI has further accelerated this growth, with AI-based software solutions experiencing astounding 70% annual growth since 2022. This surge has unlocked numerous AI use cases within the mobility sector, enabling companies to harness data more effectively.

A significant portion of the latest breakthroughs in autonomous vehicles (AV) can be attributed to these data-based business models, as they facilitate coding processes and the generation and consolidation of data in a cost-effective and efficient manner. Notably, three of the five largest funding rounds for data-driven business models have been linked to solutions that enhance AV development, underscoring the critical role that data plays in advancing this technology.

While data-driven business models have primarily flourished in the United States, partly due to the lack of regulation and easier access to data, the landscape is evolving. In recent years, broad coalitions have been formed to generate and share mobility data. But while many players, such as car companies and insurers, want to access a wider range of data to improve their offerings, they remain reluctant to share their own driver data for fear of eroding their competitive advantage.

The mobility sector is currently witnessing a surge in funding directed toward financial services innovation, particularly in the areas of alternative vehicle financing and in-vehicle payment solutions. This trend is predominantly being led by financing startups in the United States. Here, innovative financing encourages vehicle ownership for low- to middle-income populations, capitalizing on Americans willingness to go into debt for a car. In contrast, China has yet to develop a robust ecosystem of financial services-related mobility startups. This is likely due to the presence of super apps, such as WeChat, that dominate this market segment, leaving limited room for new entrants.

The global funding landscape has favored players offering innovative vehicle financing solutions. In 2024, funding for vehicle financing solutions reached approximately US$3.8 billion, up from $200 million four years before. The predominant use cases for this funding include the overhaul of traditional credit-scoring methods, especially in the US. By leveraging a combination of additional datapoints and predictive AI solutions, these innovative models aim to improve access to vehicle financing for a broader range of consumers.

Additionally, ride-hailing-related financing options have emerged, allowing drivers to earn and pay off their vehicle costs based on their ride-hailing revenues without the burden of down payments or guarantees. This opens financing solution for low-income workers and removes a significant hurdle to entering the market, while raising the risk profile of these loans. Another notable development is the unlocking of a vehicle's equity value through credit cards secured against the customer's car, providing an alternative financing avenue.

The second-largest area of growth in funding since 2020 is related to mobility-related payment solutions, which reached $400 million in 2024, jumping 81% since 2023. These are solutions that integrate payment methods and biometric authentications into vehicles, similar to what is done with mobile phones. These advancements aim to streamline processes and enhance user satisfaction while also facilitating the collection of payment data.

Despite the promising potential of payment solutions, the space presents several complex challenges that make it less attractive for startups. The overall payment process is dominated by large incumbents that benefit from volume and greater organizational trust. To successfully position their services as more than a commodity, startups must integrate value-adding use cases for vehicle manufacturers or charging providers into their payment orchestration processes.

Moreover, technical and regulatory constraints, including payment authentication and cross-border payments, introduce additional complexities. This indicates the necessity of addressing payment solutions within the broader context of vehicle development from the outset.

Overall, the highest success rates for startups are likely to come from those offering niche use cases or those that focus strongly on value-added services. By homing in on specific needs within the financial services landscape, these startups can carve out a sustainable position in the evolving mobility ecosystem, ultimately contributing to the sector's growth and innovation.