Toyota subsidiary Woven Planet announced plans to purchase Lyft’s Level 5 autonomous vehicle division for $550 million, per The Wall Street Journal. With the purchase, Toyota—the world’s largest carmaker by shipments—gains access to Lyft’s fleet of driverless vehicles along with its team of engineers and research scientists. Toyota has been quietly working on its own self-driving cars for several years, and previously invested $500 million in Uber to jointly develop autonomous cars. The Lyft acquisition will put Toyota more in line to compete with other automotive heavyweights like Volkswagen and General Motors that have spent big to acquire AV startups.
Toyota’s acquisition marks the latest instance of the rapid consolidation sweeping the AV industry. Here are some of the other recent major AV acquisitions:
Since many AV startups lack the deep pockets and extensive resources needed to successfully bring their driverless cars to market, consolidation will likely continue throughout the industry. Autonomous vehicles are a complex, capital-intensive technology that’s proven to require more money and research to develop than many startups had anticipated. That reality was amplified during the pandemic: Last May, Aurora Innovation CEO Chris Urmson predicted that a decrease in VC spending would accelerate AV consolidation even further, a sentiment echoed in Mobileye CEO Amnon Shashua’s warning of an impending “great consolidation” on the horizon. Startups simply lack the resources and engineering talent of automotive giants like Toyota, which have decades of experience researching and manufacturing at a global scale and navigating regulatory and consumer safety frameworks.
Aside from gaining the technology and talent from these companies, AV acquisitions also increasingly provide traditional automakers with a trusted brand name. Consumer perceptions of autonomous vehicles are undergoing a shift. According to a 2020 Deloitte study, just 23% of US internet users in 2018 said they trusted new AV companies to offer fully autonomous vehicles, compared with 47% who trusted traditional car manufacturers. Those responses reversed considerably by 2020, with 36% of respondents saying they trusted new AV companies, compared with 31% for traditional automakers.