M&A in the Automotive Tech Sector

M&A activity in the automotive technology space has been robust over the last few years as buyers ‒ especially strategic buyers such as automakers and suppliers ‒ are turning to M&A as a way to acquire needed technologies, achieve scale, and enter new markets. From 2021 to 2024, there were almost 1300 M&A deals in the sector, and 2025 is also showing strong activity. Through the first eight months of 2025, there were 184 M&A deals, a 6% growth from the comparable period in 2024. 

A number of factors are driving M&A activity in the sector. Here are some of them.

Electric and hybrid vehicles 

Consumers are buying more electric (EV) and hybrid (HEV) vehicles than ever before, and so too are commercial companies looking to add EV and HEV vehicles to their fleets. This is fueling acquisitions of companies that offer technologies and specialized expertise in optimizing power usage, extending battery life, and managing EV charging infrastructure.

For instance, Ireland-based power management company Eaton recently acquired Resilient Power Systems, a developer of EV charging stations that utilize solid-state transformer technology to improve the connection between the power grid and charging stations. The acquisition allows Eaton to expand its offerings in the commercial and fleet EV charging markets, and provide a comprehensive EV charging software platform.

The growing adoption of hybrid and electric vehicles is also creating a demand for companies that offer data analytics capabilities in this arena. As an example, financial news and information giant Dow Jones recently bought data provider Eco-Movement, a Netherlands-based company that offers a data platform that collects and enriches data on nearly two million EV charging connectors in over 80 countries. The purchase strengthens Dow Jones's data and analytics offerings in its growing energy business, OPIS. 

Autonomous driving

The market for autonomous driving, the ability to operate a vehicle safely with little or no human input, is growing dramatically. Autonomous vehicles are already being used is some U.S. cities for ride-hailing services and for freight transport. That is expected to dramatically expand with advancements in technologies such as artificial intelligence (AI) and machine learning (ML) that enable autonomous driving. That growth will also be fueled by an increasing demand for safer and more efficient transportation, supportive regulatory frameworks, and the potential cost savings for commercial fleets, particularly in freight. 

AI and ML enable autonomous vehicles to perceive, decide, and act like human drivers by interpreting sensor data, predicting traffic, and controlling the vehicle's systems. These technologies analyze real-time data from cameras and other sensors to understand the vehicle's surroundings, make split-second decisions for safe navigation, and execute actions like accelerating, braking, and steering. 

Companies that offer these AV-related technologies are hot M&A targets. For example, NXP Semiconductors, a Dutch chipmaker and provider of automotive processing and networking, recently bought TTTech Auto for $625 million. TTTech Auto is an Austrian company that develops safety software and middleware for advanced driver-assistance systems (ADAS) and software-defined vehicles, that is, vehicles whose core functions, features, and performance are primarily controlled and enabled by software. And Indie Semiconductor, a provider of semiconductor and software solutions for the automotive industry, paid $20 million to purchase emotion3D GmbH, an Austrian developer of perception algorithms and software that process data from vehicle cameras and radar to monitor drivers and occupants, detect hazards, and assist in automated driving functions.

Supply chain resilience

Companies are pursuing M&A to enhance automotive supply chain stability and resilience in the face of geopolitical and economic uncertainties such as those posed by the COVID pandemic. For example, Ireland based consulting company Accenture acquired German consultancy Staufen AG to expand its expertise in manufacturing and supply chain management for the automotive and other industrial sectors. The deal will help manufacturers mitigate supply chain disruptions and improve overall business performance.

Companies are also making deals to reduce their reliance on external providers for the complex digital systems used in modern vehicles. For instance, American Axle & Manufacturing (AAM) acquired U.K.-based Dowlais Group, including its subsidiary, GKN Automotive, for approximately $1.44 billion. Dowlais Group manufactures automotive parts, and GKN Automotive provides integrated control software for automotive eDrive systems that power electric and hybrid vehicles.  The deal helps AAM align with the industry's shift toward EVs and software-defined vehicles.

Industry consolidation

The last few years have seen consolidation in the automotive tech sector as larger companies acquire smaller peers to grow their customer base, enhance their portfolios, and enter new markets. This is particularly true for automotive suppliers who are leveraging M&A to create larger entities with greater purchasing power and more stable financial positions. For example, Tenstreet, a provider of trucking fleet driver management software, acquired DriverReach, a smaller company that offers driver recruitment and compliance management software, to expand the scale of Tenstreet’s driver/carrier network.

Consolidation in the sector is also happening as companies look to make M&A deals that obtain the scale and financial resources required to invest in leading-edge technologies such as AI and ML. For instance iOffer.io, a vehicle value provider and AI bidding automation platform, merged with AutoAcquire AI, an AI-powered platform for automotive inventory acquisition, to create an end-to-end solution for dealerships to acquire used vehicles from private sellers at scale.

The consolidation trend is expected to continue as technological transformation, such as the shift toward electric, autonomous, and software-defined vehicles, as well as competitive pressures and supply chain issues drive companies toward mergers and acquisitions as a way to innovate and grow.