Changes in the mobility market and investment environment after the pandemic

The first thing to note is that while the mobility market itself continues to expand, the way startups receive money has changed dramatically.

On a global level, the Mobility as a Service (MaaS) market is estimated to be worth approximately $200 billion in 2024, and is predicted to grow several times in size through the first half of the 2030s.Tailwinds such as urbanization, the spread of smartphones, and pressure for decarbonization remain strong, and it can be said that the trend of “from ownership to usage”, including ride sharing, car sharing, and subscription-type vehicle usage services, has taken root in the United States.

however, compared to the period of “excess money” around 2021, venture investors’ attitude from 2023 to 2025 is clearly more cautious. A typical example is the field of micromobility, such as electric scooters, and some reports suggest that global investment in 2024 will drop to about one-quarter of the previous year.

What is interesting is that “demand” is actually growing. In North America as a whole, it is reported that the number of uses of shared micromobility (shared bicycles and shared scooters) will reach 225 million times in 2024, an increase of approximately 30% from the previous year. Simply put, while user behavior is moving towards using mobility services, investors have switched their evaluation axis from a `loss-producing growth story'' to a `business model based on profitability and regulatory compliance.”

As an inevitable result,US mobility startups are under pressure from: One is to pivot to a more infrastructure-oriented business based on partnerships with cities and state governments. The other is to survive as a “B2B/B2G platform” that supports existing players (automobile manufacturers, transportation operators, energy companies) through software and data services. Funds are increasingly being attracted to modest businesses that continue to generate cash flow, rather than flashy unicorns.

Restructuring of self-driving startups: the dream and reality of robotaxis

Self-driving robotaxis have been attracting attention as a symbol of mobility. It was once said that there would be no drivers left in a few years, but that expectation has been shaken up in recent years.

Especially impactful were GM’s (General Motors) decision to suspend investment in its self-driving subsidiary Cruise and its decision to withdraw from the robotaxi business. GM announced a strategic shift in ending funding for Cruise at the end of 2024 and redirecting resources to advanced driver assistance features for its vehicles.

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The Evolving Mobility Landscape: From Robotaxis to Ecosystem Redesign

The future of mobility is shifting. Initial enthusiasm for self-driving robotaxis is waning, while investment and entrepreneurial energy are increasingly focused on foundational elements like electric vehicle (EV) charging infrastructure, micromobility solutions, and the data platforms that underpin them.this represents a move away from solely focusing on the vehicle itself, towards a comprehensive “redesign of the entire ecosystem” encompassing infrastructure, software, and regulatory frameworks. This shift has critically important implications for countries like Japan as they formulate their own mobility strategies.

The Shift Away from Robotaxis

Early projections for the rapid deployment of fully autonomous robotaxis have faced significant hurdles. Technical challenges, regulatory complexities, and public acceptance issues have slowed progress. Companies like Cruise and Waymo have scaled back or paused their robotaxi operations in several cities, demonstrating the difficulties in achieving widespread, reliable autonomy. The New York Times reported on Cruise’s suspension of operations following safety concerns, highlighting the challenges. This has led to a reassessment of investment priorities within the mobility sector.

Rise of Ecosystem-Focused Innovation

Capital and innovation are now flowing into areas that support the broader mobility ecosystem. These include:

• EV Charging infrastructure: The expansion of EV adoption necessitates a robust and accessible charging network. Companies are investing in both public and private charging solutions, as well as technologies like fast charging and battery swapping. The International Energy Agency’s Global EV Outlook 2024 details the rapid growth and infrastructure needs of the EV market.
• Micromobility Infrastructure: Electric scooters, bikes, and other small vehicles are becoming increasingly popular for short-distance travel, particularly in urban areas. Investment is focused on infrastructure to support these modes, including parking, charging, and maintenance.
• Data Platforms: The collection and analysis of mobility data are crucial for optimizing transportation systems,improving efficiency,and enabling new services. Platforms that integrate data from various sources – including vehicles, infrastructure, and users – are gaining prominence.
• Fleet Management Software: As businesses transition to electric fleets, sophisticated software solutions are needed to manage charging, maintenance, and overall fleet operations.

Japan’s Mobility Strategy: A holistic Approach

Japan’s approach to mobility is recognizing the need for a comprehensive strategy that extends beyond simply replicating successful models from other countries. A key takeaway from the American experience is the importance of integrating:

• Investment in urban Infrastructure: Modernizing and expanding transportation infrastructure to accommodate new mobility solutions. This includes smart traffic management systems, dedicated lanes for micromobility, and EV charging stations.
• Power Systems: Ensuring the electricity grid can support the growing demand from EVs and other electrified transportation modes. This may require investments in renewable energy sources and grid upgrades.
• Dialog with Regulations: developing clear and adaptable regulations that foster innovation while ensuring safety and public welfare. This requires collaboration between government, industry, and academia.

Japan’s unique urban landscape and societal needs require tailored solutions. Simply copying app-based services or vehicle designs without considering the broader ecosystem will likely yield limited results. Japan’s Ministry of Economy, Trade and Industry (METI) is actively working on strategies to promote the growth of next-generation mobility technologies and infrastructure.

Key Takeaways

• The focus in mobility innovation is shifting from autonomous vehicles to the broader ecosystem.
• Investment is flowing into EV charging, micromobility, and data platforms.
• Japan shoudl prioritize a holistic strategy encompassing infrastructure, power systems, and regulatory frameworks.
• Learning from the experiences of mobility startups in the US is crucial for shaping Japan’s future policies.

Looking Ahead

The redesign of the mobility ecosystem is an ongoing process. As technology continues to evolve and consumer preferences change, further innovation will be needed. Countries that embrace a