Since the early 2010s, mobility has been one of the most dynamic investment frontiers, fuelled by the promise of electrification, autonomy, and new transport models. Venture capital poured in, OEMs partnered aggressively, and the race to find “the next Tesla” dominated headlines. By late 2021, deal activity had peaked in a frenzy of valuations and capital deployment.

Fast-forward to 2025, and the mood is different. The pace of headline-grabbing megadeals has slowed. Capital is no longer chasing the shiniest “next-gen” prototype; instead, investors are leaning into scale, operational performance, and targeted bets. The McKinsey SILA (Start-up and Investment Landscape Analysis) data tells us that while aggregate funding volumes have remained stable, the shape of mobility investment is undergoing a structural shift.

From Gold Rush to Ground Game

The story begins with the cooling of specific high-hype categories—particularly early-stage EV brands, battery disruptors, and shared mobility start-ups. The wild spikes of capital in 2020–21 have flattened, but that does not mean investors have walked away.

Instead, the capital is concentrating. The number of disclosed deals has dropped, but the average deal size has almost doubled from 2010 levels. Larger cheques are flowing into later-stage, higher-conviction opportunities, especially in autonomous technologies and electrification infrastructure.

For UK players, this creates a challenge and an opportunity: a smaller pool of investable businesses is attracting more capital per deal, which means UK founders need to present a much more straightforward, scale-ready proposition to compete for global money.

ACESD Still Drives the Agenda

McKinsey’s ACESD framework—Autonomous, Connected, Electrified, Shared, and Digitalised—remains the main map of mobility investment flows.

• Electrified: EV manufacturing, battery production, and charging infrastructure remain the investment magnet, even after a modest slowdown in 2024. In the UK, this aligns with the government’s push for zero-emission vehicle mandates, but domestic battery production capacity still lags China, the US, and mainland Europe.
• Autonomous: Investment here has been buoyed by semiconductor plays and AI-enabled driver-assistance systems. UK strengths in software engineering, sensor development, and chip design (think ARM Holdings) are significant, but scaling hardware manufacturing locally remains a bottleneck.
• Shared: UK ride-hailing and micromobility players face regulatory friction, but niche plays in B2B and regional transport still have room to grow.
• Connected & Digitalised: Fleet management, automotive SaaS, and used-vehicle marketplaces are bright spots where the UK has competitive scale-ups.

The UK’s Paradox: Great Ideas, Modest Funding

Despite producing category leaders like ARM and Arrival, the UK still trails the US and China in total mobility investment volume—40% of capital flows to the US, 25% to China, and the UK is a distant third.

Part of this is structural:

• Risk appetite is lower among UK and European institutional investors.
• Funding networks are less dense, with fewer mega-funds focused on mobility.
• OEM presence is thinner than in Germany or Japan, and those that do operate in the UK tend to invest overseas.

For UK founders, this means cross-border capital raising is almost a requirement. For UK investors, it means the domestic market may offer asymmetric returns for those prepared to fund scale, not just seed.

OEMs: Partners More Than Investors

Only 8.8% of global mobility tech investment since 2010 has come from automotive OEMs. UK OEM-linked capital has been fragile, with most engagement happening via strategic partnerships or pilot projects rather than direct equity.

For British start-ups, OEM partnerships can provide validation and early customers, but they should not be mistaken for a capital strategy. Structuring a UK mobility business to appeal to international VC/PE is still the most reliable path to funding.

A More Risk-Averse, Higher-Conviction Market

The market’s post-2022 profile is clear:

1. Fewer deals, larger tickets. Scale matters more than ever.
2. Shift from next-gen to now-gen. Proven tech at scale beats unproven “moonshots.”
3. Profitability on the radar. Cash burn is no longer ignored in favour of growth at all costs.
4. Narrower competitive fields. Survivors are commanding higher valuations.

The UK Opportunity Set

 While the biggest cheques are still written in the US and China, there are very real plays in the UK mobility ecosystem for both investors and founders:

• Electrification Infrastructure: Home charging solutions, fleet depot charging, and energy management software for operators.
• Automotive SaaS & AI: Dealer systems, predictive maintenance, EV readiness platforms.
• Specialised Autonomy: Niche autonomous systems for logistics, ports, or off-road applications, where the UK’s engineering talent excels.
• Circular Mobility Models: Used EV remarketing, battery recycling, and subscription-based access to vehicles.

Looking Ahead

For UK investors, the “under the hood” reality is that global mobility hasn’t slowed—it’s matured. The winners will be those who can bridge the gap between promising UK tech and profitable, scaled deployment—often by pairing local IP with global capital and manufacturing reach.

For founders, the challenge is to position themselves not as “the next big thing” in mobility, but as “the next profitable thing” in a market where execution at scale is now the ultimate differentiator. Have a great week!