Electric mobility hits the ground running: the race—and the bumps in the road—for a critical sector for the future of the planet

Entrepreneurship and technology are driving the transition towards more sustainable mobility, and electrified solutions are helping to pave the way. Alongside other major trends like micro-mobility and pay-as-you-go, several innovative ventures are already plugged into the electric mobility mainstream. To celebrate World Environment Day on 5 June, let’s take a deeper dive into the transport of the future.

According to warnings from the International Energy Agency (IEA), the transport sector is not on track to meet the goal of achieving net zero emissions by 2050. Still predominantly dependent on fossil fuels, it accounted for 37% of global energy-related CO2 emissions in 2021: up to 91% comes from the combustion of petroleum products.

A radical change in mobility is therefore needed to preserve the planet, a particular concern on World Environment Day, which is celebrated on 5 June. The European Union has recently taken firm steps towards shifting these figures in the right direction by banning the purchase of new combustion cars and vans across all Member States from 2035 onwards. The Biden administration has also set a target for electric vehicles (EVs): that they make up 50% of all new car sales in the United States by 2030.

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Against a background where the sector has to quickly restructure to comply with legislation and align with the SDGs, startups that focus on alternative mobility solutions are positioned to play a pivotal role. Electrification is one of the current trends poised to put sustainable mobility into practice and onto the market: globally, the sector is currently valued at $130.02 billion and could reach revenues of $325.64 billion by 2030. Global sales of electric cars exceeded $10 million in 2022, 14% of all new cars sold, up from 9% in 2021.

On two and four wheels: the race for electric vehicles

While production of electric planes is still in its infancy, electrically powered road vehicles like cars, motorcycles and bicycles are ready to take to the roads, particularly in cities. Urban mobility is one of the main sources of the pollution problem: more than 70% of the CO2 emitted into the atmosphere comes from urban environments, and in the EU, urban mobility accounts for up to 40% of all road transport emissions.

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Two-wheeled electric solutions offer an agile answer to this problem. Startups like Kleta and Wifly let customers rent electric bikes with a subscription; others, like Yego, offer electric motorcycle rentals. Cooltra, created in 2006, offers rental by the minute, day and month of motorcycles and bicycles, and currently has a fleet of some 20,000 vehicles, 85% of which are electric. “When I started Cooltra, electric vehicles or shared mobility technology didn’t exist. Now we’re at the start of the growth curve”, explains the company’s co-founder and CEO, Timo Buetefisch. “But the ultimate goal remains the same: cleaner cities, fewer cars, more car sharing and more space for pedestrians”.

"The endgame is cleaner cities, fewer cars, more car sharing and more space for pedestrians"

Electric scooters, which globally represent an estimated market value of $37.07 billion in 2023, are represented by startups such as the American Lime and Bird, the Swedish VOI and the Spanish company Rhyde. Other companies like the Estonian Bolt and Cabify, the first Spanish unicorn (a company with a value of $1 billion or more in funding), are banking on multi-mobility solutions that integrate services such as VTC (vehicles for rent, for its acronym in Spanish). “We offer different urban transportation options so that all those people and companies that are committed to the environment have a transport option at their disposal that meets their needs”, says David Pérez, Senior Vice President of Stakeholder Relations at Cabify. “In addition, in 2022 we are launching the ‘Cabify Eco’ category for companies, which offers the possibility of travelling only in electrified vehicles”.

Entrepreneurship is also helping the manufacture of electric vehicles to gain momentum. In Spain, the sector is represented by startups like Liux, which is about to launch the first Spanish electric car; Velca, which produces motorbikes; and Lampsy, which focuses on electric scooters. The ecosystem is rounded out by startups such as Wallbox, backed by BBVA Spark and focused on manufacturing electric batteries; and Evsy, the first social network for drivers that offers a map of charging points.

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A connected web: the road network of the mobility of the future

Electric solutions also go hand in hand with mobility trends like car sharing  and ride hailing as well as new consumption models such as pay-as-you-go versus ownership and second-hand trading.

This makes synergies between players in the mobility ecosystem key to the growth of the sector. Cooltra, for example, collaborates with several delivery companies such as JustEat and Glovo, as well as ride hailing platforms like FREENOW and Cabify. Cabify’s agreements with startups such as Cooltra and Wible are part of the company’s efforts to decarbonise its fleet. “The goal is for 100% of trips on the platform to be in decarbonised or electric fleets by 2025 in Spain”, says Cabify’s David Pérez. To reach this goal, the company has also received support from the European Investment Bank. “We have strategic agreements that allow us to both accelerate our own electrification and help companies and freelancers that collaborate with us, including Mobilize Driver Solutions, Tesla and Feníe Energía”.

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Also of note are synergies between manufacturers and digital marketplaces such as Mundimoto, a company that sells second-hand motorbikes online, which in November 2022 announced its intention to offer new electric motorbikes on its platform. “We’re making a solid commitment to contribute to redefining the future of urban mobility”, explains Josep Talavera, CEO and co-founder of Mundimoto. “We believe that this is a reality and a trend that will soon take over, which is why we are committed to adding more than 20 models of electric motorbikes and we’re making it easy for our customers to swap their old combustion motorbike for an electric one”.

"Electric mobility is a reality and a trend that will soon take over"

Insights and support for crossing the finish line

In Spain, where the government has recently extended the Moves III programme’s EV subsidies and there are already 21,500 public charging points, an estimated 180,000 electric vehicles are now on the road, with a target of five million by 2023. And even though Latin America is lagging  behind, the growth in the sale of electric and hybrid vehicles in the region is strong, up 21.7% from 2021 to 2022. “It’s important that governments help renew vehicles”, says Mundimoto’s Josep Talavera, “by installing recharging points on the streets, providing subsidies for this renewal or speeding up the process for receiving financial aid“.

“Upcoming regulations, like the establishment of Low Emission Zones in Spanish cities with populations of over 50,000 people, will drive a transformation of urban mobility that will affect everyone”, says Cabify’s David Pérez. “For companies to take up the challenge and push for change means accelerating the path to the finish line and having the support we need to achieve our goals”.

"Upcoming regulations will drive a transformation of urban mobility that will affect everyone"

Investment in electric mobility, while down from 2021 (consistent with the general slowdown in venture capital), remains strong: in 2022, venture capital investments in startups engaged in producing electric vehicles and batteries reached $1.2 billion. In Europe, venture capital funding for electric mobility accounted for 61% of the total investment in mobility in 2022. Supporters like BBVA Spark also help inject capital into the sector: “As scaleups, we’re a bit of a special breed. Initiatives like BBVA Spark help us find the right partner for our financing strategy”, says Cooltra’s Buetefisch.

Amidst disruptive legislative change, with strong investment backing and a wide range of mature players in an interconnected ecosystem, electric mobility has shifted from warming up to rocketing towards the finish line: the (green) transport of the future.

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