Venture capitalists are throwing billions at the future of cars

In the future, we’re told, artificially intelligent electric cars will drive us around smart cities like little packages on a conveyor belt from one destination to the next. In the third quarter, venture capitalists dropped $1.9 billion into auto tech companies to bring that vision to fruition, according to a quarterly MoneyTree report from CB Insights and PricewaterhouseCoopers.

Lucid Motors, a luxury electric car company that competes with Tesla, received the most funding: $1 billion from the Saudi Public Investment Fund. Of the top five deals, three went to companies focused on self-driving car tech. That included Pony.ai, ThinCI, and Zoox.

What’s most remarkable is how much investment in the auto tech sector has leaped forward. Since the end of 2016, auto tech has garnered between $100 million and $350 million per quarter in investment funding. This quarter, two investments forced those figures upwards: the billion-dollar investment into Lucid Motors and a $500 million investment in Zoox.

Carmakers are very keen on electric cars, even if they’re not making money yet and may not make money in the near future. Tesla, which only makes electric cars, is famously in the red. Meanwhile, General Motors doesn’t plan on its electric vehicles turning a profit until 2021. Sales of electric vehicles in the United States are still modest, but manufacturers believe the customers of tomorrow will demand them.

Auto tech wasn’t the only big area of investment this quarter. Venture capitalists also put big bucks into digital health, agriculture, real estate tech, and insurance tech startups.