Weekly Intel Report: Automotive & Mobility News

BY AUTOMOTIVE VENTURES | AUG 21 2023 | VIEW ONLINE ➡️

Our Latest Investment: VINCUE

Introducing our latest investment out of the Automotive Ventures DealerFund: VINCUE.Stocking the correct inventory is the lifeblood of a dealership. Ensuring that you don’t overpay for that inventory, and can make dynamic price changes as local supply and demand changes in your market, can literally mean the difference between the top and bottom performers in a market.This week it was announced that Automotive Ventures invested in VINCUE’s Series B financing round, alongside Holman Growth Ventures and AutoTech Ventures. We’re very honored to have a chance to invest in this amazing, Kansas City-based company. VINCUE is a revolutionary end-to-end inventory lifecycle solution for retail automotive dealerships.We created the Automotive Ventures DealerFund to enable car dealers to invest in technology solutions that help improve their operations. I can’t think of a better company for the new fund than VINCUE, which will deliver a dramatic impact on both driving incremental revenue for dealers, while also finding and realizing efficiencies in their cost structure.

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What I'm Reading:

Ford has received a patent for a technology that would allow it to shut off air conditioning, radio, cruise control, remote key fobs or other systems if the consumer has missed their car loan payment. The technology could even cause the vehicle to "emit an incessant and unpleasant sound" when the owner is inside until action is taken. (💲Link)Current EV market growth "cannot be sustained," an analyst says. The shift from early adopters to regular customers is the next big growing pain. The cap for rapid EV growth appears to be around 7% of the market. (Link)Tesla has begun opening up its vast, exclusive network of Superchargers to drivers of other electric vehicles in the U.S. earlier this year. But there's one problem: The charging cables, which were designed for Teslas, aren't long enough to comfortably accommodate some other cars. It means non-Teslas have had to park awkwardly to plug in. Or worse yet, park in the wrong spot, blocking off two charging stalls instead of one. (Link)Satisfaction with public charging during the first half of the year fell to its lowest level recorded in J.D. Power studies and as electric vehicle adoption increases, industry leaders should be concerned. Most consumers who are reluctant to buy an EV worry that public chargers are not available. Poor charger performance could be another hindrance. (💲Link)For a gas station, the return on investment on an EV charger could be 7 to 10 years on average. The hardware and software for fast charging can run between $50,000 for one charger and $500,000 for multiple fast chargers and dispensers. A traditional gas station may have two islands with four pumps each for liquid fuel; the same utilization rate would require about 40 charging stations. (Link)California regulators gave Waymo and Cruise the OK last week to scale up their robotaxi services in San Francisco, but now it seems the city itself won’t have it. On Wednesday, San Francisco filed motions with the California Public Utilities Commission to pause the firms’ plans to charge for robotaxi rides in the city at all hours. (Link)Cruise, the self-driving car subsidiary of General Motors, has been asked to reduce its robotaxi fleet by 50% in San Francisco following a crash Thursday night with a fire truck. (Link)An artificial intelligence (AI) camera system caught almost 300 drivers breaking the law during the first three days of its use in the UK. The motorists were found to be using mobile phones or not wearing seatbelts. (Link)CATL, the Chinese battery giant and a major supplier to Tesla, unveiled its latest product that aims to solve electric vehicles’ charging and range limitations. The battery, dubbed Shenxing or “god-like movement,” is able to refuel up to 250 miles of range in 10 minutes. Mass production of the battery is expected to be underway by the end of 2023, with shipping to begin in 2024. (Link)Tesla reduced starting prices by $10,000 on its flagship models, the Model S sedan and Model X crossover, by introducing new versions with less battery range and slower acceleration. (💲Link)Ford sees revenue from in-car software services, like its hands-free driving feature, surging by 10x over the next few years. Ford already has a half-million software subscribers, mostly in its commercial fleet business. Selling services, such as software that controls the speed of the vehicle, generates gross margins above 50%. That compares to the 8.3% margin before interest and taxes that Ford had in this year’s first half. (💲Link)Ford is installing its hands-free highway driving hardware as standard equipment on many Ford and Lincoln brand models, part of a larger industry push toward greater subscription revenue. Ford customers will be able to activate BlueCruise at the time of vehicle purchase for three years for $2,100 or after a free 90-day trial for $800 annually or $75 a month. Ford is aiming to generate over $20 billion in annual revenue from subscriptions by 2030. (💲Link)Since the Inflation Reduction Act was signed into law one year ago this week, there's been $59 billion in new EV investments announced in the U.S. (💲Link)Vietnamese electric vehicle (EV) manufacturer VINFAST saw its valuation surpass that of legacy US carmakers Ford and General Motors (GM) on its first day of trading on Nasdaq (Aug. 15). (Link)VINFAST recently changed its distribution strategy and now wants to sell through a dealer network. (💲Link)CB Insights reports that startup valuations at the Seed stage (where Automotive Ventures invests) are down 15% from last year, but are trending up quarter-over-quarter. (Link)A lesson to take away from the WeWork saga: Venture capital can be excellent for quickly scaling technology startups, but the model is not a good fit for lower-margin businesses. (Link)When valuations of VC-backed companies began to reset downward in 2022, one stage bucked the trend: Seed (the stage at which Automotive Ventures typically invests). But after climbing for nearly every quarter since Q2 2020, the median pre-money valuation of Seed-stage deals has dropped 17%, according to PitchBook Data's Q2 2023 US VC Valuations Report. (Link)Our nation’s most critical infrastructure—from pipelines and industrial plants to ships and suspension bridges—is slowly going to pieces, leading the American Society for Civil Engineers to give our infrastructure a C-minus on its most recent report card. The solution may be robots that fly, walk, swim and crawl, equipped with new types of sensors, and artificial intelligence to digest the data they gather and make predictions based on it. (💲Link)AI won’t be assembling apartments or erecting stadiums any time soon, but in construction — an industry stereotypically known for clipboards and Excel spreadsheets — the rapid embrace of the technology may change how quickly projects are finished. Drones, cameras, mobile apps and even some robots are increasingly mapping real-time progress on sprawling job sites, giving builders and contractors the ability to track and improve a project’s performance. (💲Link)A 1962 Ferrari 250 GTO with an asking price above $60 million will go to auction this fall. Back in 1985, after a lengthy search that took him across Europe, Ohio resident Jim Jaeger, 75, bumped into someone at a race who knew an owner looking to sell the exact model he wanted. The car was sitting in Detroit, just four hours from his Cincinnati home. He purchased the car for $500,000. The last time RM Sotheby’s sold a 250 GTO was in 2018, a 1962 model that went for $48.4 million. (💲Link)

Have a great week,Steve Greenfield

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Notable & New

🎥 It was a real pleasure co-hosting the ASOTU Morning Show this week with Paul J Daly. (Link)

🗞️ On this week's Future of Automotive segment on CBT News I share the latest investment out of our DealerFund: VINCUE. (💲Link)🎥 Check out my segment this morning with Paul J Daly from ASOTU where we cover Automotive Ventures' latest investment in Treehouse and the benefits for dealers. (Link)🎥 Automotive Ventures portfolio company RoboTire was featured on Tire Review. (Link)🎥 Great video of Automotive Ventures portfolio company Recurrent at ADESA Seattle, demonstrating how the Recurrent report helps sellers realize a $1,400 increase in sales price, and a 9% increase in sales conversion rate. (Link)🎤 I look forward to participating in next month's Ted Ings' Fixed Ops Roundtable. (Link)

Companies to Watch

🌟 Moonware connects ground crew, aircraft, and ground support equipment to efficiently service flights. Their long-term vision is to handle aircraft autonomously from touchdown to takeoff, providing seamless aircraft turnarounds for a streamlined airport experience.

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🌟 Civ Robotics CivRobotics provides autonomous layout solutions for land surveying. Think about those guys in hard hats and vests that come down your street and mark underlying pipes or wires with spray paint. The CivRobotics robots, called CivDots, allow you to lay out a construction site eight-times faster, with only one operator.

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