Goldman Sachs Expands Interests Into Automotive Tech

Matt Posky
by Matt Posky

Goldman Sachs is creating a joint venture that will help it capitalize on automotive technology firms while they’re consistently being overvalued on the New York Stock Exchange. Automotive startups have become a hot item, so long as they’re trading on the assumed merits of new technologies, and there’s no shortage of new companies being propped up by established players. The last few years have been a merry-go-round of establishment automakers and financial intuitions investing in startups on the off chance they might have something useful.

Meanwhile, burgeoning electric vehicle companies are using special purpose acquisition firms (aka blank-check companies) to maximize their advantage. Even though some have argued this is being done unfairly, there’s not much accountability in general. The iron could not be more primed for striking if you happen to be one of America’s largest banks.

According to Bloomberg, the investment bank chose San Francisco-based technology banker Chris Buddin and New York-based industrial banker Fausto Monacelli as the co-heads of the automotive offensive.

From Bloomberg:

The venture formalizes a partnership between Goldman’s industrial and technology, media and telecommunications teams that had been collaborating already on deals for years, David Friedland, head of the Americas cross-markets group, said in an interview.

“It will lead to greater collaboration, greater dedication of resources, more efficient execution on opportunities and more internal institutional support,” Friedland said.

Goldman Sachs’ strategy appears similar to the Softbank Vision Fund that has been on a technology buying spree with a clear aim to control certain technologies in the near future. The fund makes strategic investments in companies across the technology sector, with a focus on artificial intelligence, applications, and devices that use sensors to network with other devices or the internet (e.g. smartphones, tablets, home assistants, wearable fitness devices, robots, modern cars). Some of Softbank’s biggest investments have been in the automotive realm and it has become increasingly close with Toyota. The financial entity has a clear interest in buying up businesses pertaining to food delivery, freight and parcel services, online vehicle sales, car sharing, and autonomous technologies.

While Goldman Sachs may have different objectives, seeing another gargantuan financial institution take a similarly strong interest in automobiles makes you wonder. The bank may just be trying to secure investments in a period where technology startups are guaranteed money makers on Wall Street, especially once they’re supported by larger entities. But there’s also a sense that it would like to take control of various business sectors before their respective markets reach maturity.

“After Tesla’s IPO many people believed that it’s lightning in a bottle and it will not happen again because of the capital needs,” Buddin said. “The way that Tesla has grown and is valued gives people faith that there’s room for startups to grow in this sector.”

[Image: Goldman Sachs]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Conundrum Conundrum on Feb 15, 2021

    Goldman Sachs and Blackstone, the epitomes of good old-fashioned greed. If there's a nickel to be squeezed out of anyone anywhere, these guys will be right there promoting whatever it is that'll make them some money. Right now EV stocks are where the punters are "investing". Soon all their money will be ours is the Goldman Sachs outlook. On a country level, they pulled it off on Greece. Wonderful company.

  • Matt Foley Matt Foley on Feb 17, 2021

    Goldman Sachs funds the politicians who will outlaw human-driven and fossil-fuel-powered cars, thus creating the demand that will make their investments profitable.

  • RHD The re-paint looks like it was done with a four-inch paintbrush. As far as VWs go, it's a rebadged Seat... which is still kind of a VW, made in Mexico from a Complete Knock-Down kit. 28 years in Mexico being driven like a flogged mule while wearing that ridiculous rear spoiler is a tough life, but it has actually survived... It's unique (to us), weird, funky (very funky), and certainly not worth over five grand plus the headaches of trying to get it across the border and registered at the local DMV.
  • Kat Laneaux I get the point that Musk is making. I wouldn't want everyone to know my secrets. If they did, they could or would shout it out to the world. But then, if Musk certified certain folks and had them sign Confidentiality agreements, which would allow them to work on cars that Musk had made, that could allow others to work on his cars and not confine vehicle owners to be charged an arm and a leg for the service. It's a catch 22. People are greedy little buggers. If they can find a way to make money, they will even if it wrong. People...sad.
  • 285exp I have been assured that EVs don’t require maintenance, so this seems pointless.
  • Slavuta "The fuel-economy numbers are solid, especially the 32 mpg on the highway"My v6 Highlander did 31 over 10 hour highway trip
  • Aja8888 As I type this, my 4 months old Equinox's Onstar module that controls the phone is broken. Yep, 4 months (never worked right from day one). Replacement will be a REFURBISHED unit since no new ones can be obtained (from China?). I really don't miss the phone via Bluetooth. And I have a great Garmin that I have used for years for trips which has free lifetime maps and traffic.