Car makers have invested less and less in startups over the past four years, but now confidence is growing in areas like autonomy, AI and electrification.
For transport and mobility technology, 2025 was a bruising year. Investment slowed as climate-tech enthusiasm faded and carmakers grappled with tariffs, geopolitical tensions and weak consumer demand— conditions that made large, long-term bets on startups harder to justify.
“On the mobility side, there is a noticeable decline in CVC investment as corporates refocus on internal priorities amid sector slowdown,” says Raymond Zheng, senior managing director at Honda Xcelerator Ventures.
Zheng added that investors have started to consider a startup's cash reserves much more carefully and have become more conservative when investing at series B and later rounds. The downturn in investment can be seen in the amount of equity funding going from carmakers to startups, which has fallen every year since 2021.
Josh Berg, managing director of Magna Technology Investments, sees the same retrenchment. “I’ve seen a massive slowdown from my peers and others in the market in 2025 and really, it’s a reaction to what is being rewarded,” he says.
“I also just think it’s a really tough time in the industry, with tariffs and the competition [between] the German three and the American three and the Japanese and South Koreans against China, and this massive competition between, let’s say the East and the West,” he adds. “Because of that, there is less money on the balance sheet, and so companies are being very discerning in where they deploy their capital.
Cautious optimism for 2026
Despite the gloom, many corporate investors believe the worst may be over. As markets stabilise, IPOs slowly return and startups broaden the application of their technologies, sentiment is beginning to improve. Kei Onishi, chief executive of Yamaha Motor Ventures & Laboratory Silicon Valley, is among the more optimistic.
“While the industry itself faces challenges such as tariffs, supply chain issues and end-customer purchasing sentiment, which could dampen enthusiasm for innovation investment due to declining parent company profit margins, we believe the industry as a whole will continue to maintain its appetite for investing in new technologies,” he says.
There are early signs to support that view. Several corporates in or adjacent to transport have closed new venture funds recent months.
“We’ve seen significant investment activity and fundraises from corporates across multiple sectors,” says Mike Smeed, managing director of InMotion Ventures, the investment arm of Jaguar Land Rover. “We’ve had an incredibly active year, both with new investments and follow-ons, and have no plans to slow down in 2026.”
“We’ve had an incredibly active year, both with new investments and follow-ons, and have no plans to slow down in 2026”
Mike Smeed, InMotion Ventures
