With a faster moving world, we see an increasing demand for transportation both for people and goods. Causing over 8.05 gigatons of carbon emissions, the transportation sector makes up for around a quarter of the global carbon emissions. Projections have shown that those carbon emissions will double by 2050. Another challenge is urbanization: it is estimated that as of today, 4 billion people - 54% of the global population - live in urban areas. By 2050, that number could increase to 68%, causing even more congested streets. We need sustainable and smart solutions for those challenges, which in our eyes only technological innovation can offer.
The development and deployment of electric engines is one of the key measures in reducing carbon emissions. We simply can not afford to use combustion engines any longer. However, further research is needed for cleaner and more efficient and affordable batteries. In order to make that transition suitable for the needs of our society, we will also need to come up with a well planned out charging infrastructure and a smart energy network to support it.
Another alternative worth exploring is hydrogen propulsion, which can be an attractive transportation mode especially for long distances if made suitable for large-scale use, for example in semis, ships and airplanes. Yet, the possibilities of implementations for hydrogen are limited due to its rather low overall efficiency. In our eyes, much greater potential lies in the further development of batteries, which might transform not only our means of transport on the streets but also in the air.
Urban Air Mobility
The vision of flying cars has been around for over 50 years in futuristic literature and movies. Recent developments in battery density, materials science and computer simulations have brought this idea from the science fiction world into the real world. By moving transportation up to the air and shifting from 2D to 3D mobility, we can avoid the consequences of increasing urbanization. Furthermore, we don’t need to build more roads, which are among the most significant sources of CO₂ emissions. A great example of urban air mobility are flying taxis for people or drones for the last mile delivery of goods. Our portfolio company Lilium Aviation has taken this idea even one step further by reinventing how we fly as a whole. With their first principles thinking approach, they have come up with a disruptive technology that allows the Lilium jet to transition from hover flight to forward wing-borne flight, allowing for it to take off and land vertically and still reach high efficiency while in horizontal flight mode. At Freigeist, we are thrilled to invest early in disruptive technologies like this one. We have the technological know-how and the freedom in our investment decisions to make such tough calls. We understand the power of disruptive technologies and the unimaginable opportunities that they will bring.
Another technology that might have fallen under the category of “hard to image” a few years ago, is the Hyperloop technology. We see huge potential in this new means of transport and are backing the Dutch startup Hardt Hyperloop, which has developed a lane-switching technology that will ultimately enable the development of a much more efficient route network. There has been rarely any innovation in the railway system for over 100 years, leaving a lot of room for improvement in the field of mid to long distance transport of people and goods. With Hyperloop, we will be able to travel at speeds of up to 1200 km/h without harming our environment.
Besides new means of transport, software and AI will have a huge impact on our entire mobility sector as well. AI-powered software, robotics and drones will allow for faster, more efficient and more eco-friendly operations in logistics. As of right now, most of the route planning and route optimization is still done manually in Excel sheets. The amount of data we have at our hands today that could potentially go into those calculations, could never be replicated solely by manpower. Which is why we need smart software solutions for those challenges. Already today, software can help reduce costs in the logistics sector by 20%, as our portfolio company Smartlane has proven. This opportunity for improvement will grow rapidly with the development of quantum computers, which are ideal for route planning and traffic management due to the high number of parallel calculations possible. We see a lot of potential in this sector.
However far away it may seem, autonomous driving is actually just around the corner. Some startups have already developed and tested level 4 autonomy with semi trucks that drive autonomously unless they get stuck in a difficult situation in which a human driver can take over remotely. In Phoenix, Google’s Waymo ride-hailing service is up and running and a few colleges are already using self-driving buses on campus. This is great news for our society as a whole, as autonomous driving will help to connect remote or rural areas at a lower cost and make freight traffic more efficient and eco-friendly. Furthermore, it will make transportation safer, as 90% of all accidents are caused by human failure. But this also means that Europe has another critical area of innovation in which it needs to play catch-up. While Tesla’s fleet has been collecting data for years, European automakers have very limited resources in this area. Though it may take a few more years until cars will be legally able to drive autonomously, it is crucial that the data that is needed to train the software is already collected today.
New Mobility Concepts
As for public transport, smart software and an ever-growing amount of traffic data will allow us to optimize current mobility concepts, as well as implement new micro-mobility-concepts for short distances. Car-sharing and car-pooling will be further established within the years to come - and with the arrival of autonomous driving, we will experience an even greater increase in this field because once the consumer won’t be behind the wheel anymore, it will become less important to him to actually own a car. Having this paradigm shift in mind is crucial when building a new mobility concept of the future. We have a deep understanding of what makes markets change and we’d like to put this knowledge to use together with leading teams in this area.
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