Intel Report: Mobility News

BY AUTOMOTIVE VENTURES | DEC 4 2023 | VIEW ONLINE ➡️

Steve is moderating this panel at the Consumer Electronics Show (CES) in January in Las Vegas (Link)

What We're Reading:

Chartr tracks the mix of U.S. new light-duty vehicles since 1975. How the sedan has fallen from favor, while the Truck/SUV has ascended. (Link)3,900 automotive dealers across the country wrote President Biden that electric vehicles are piling up unsold on their lots. They've asked for relief from his onerous and unrealistic EV sales mandate. Dealers have a 103-day supply of EVs compared to 56 days for all cars. (💲Link)The Haig Partners Q3 2023 Haig Report is out, and while profits at automotive dealerships are trending down, acquisition activity ("Buy-Sell") remains active, with average "Blue Sky" values still more than double 2019 levels. (Link)Black Book's Used Retail Days-to-Turn estimate is now sitting around 55 days, which is a negative leading indicator for the health of the used vehicle market. (Link)There’s never been a better time to buy an electric vehicle, at least in the US. The American market now has more than 50 unique models to choose from, over double the options two years ago. As production volumes for battery-powered cars catch up with demand, there’s also a glut of supply. EV inventories in the US are up fivefold over the past 12 months. (💲Link)Concerns about EVs share two fundamental misunderstandings: They assume that the electric vehicle industry is locked into today’s technology, and they discount the huge environmental drawbacks of gas-powered alternatives. Electric vehicles are like digital cameras in their early iterations. They are already better than the alternative for almost everyone, and improving at a breathtakingly fast clip. And while there are environmental concerns with them, they are dwarfed by the benefit they provide regarding climate change. (💲Link)For electric vehicles (EVs), repairs following a collision can cost thousands of dollars more than their gas-powered counterparts, because the fixes tend to require more replacement parts, the vehicles are more complicated and fewer people do such repairs. While those issues may ease over time, first-time electric owners may be startled by the higher costs and longer wait times. (💲Link)Electric vehicles (EVs) are far less reliable than gasoline-powered vehicles, according to Consumer Reports, but most of their issues represent growing pains as automakers launch models with new powertrains and the latest features that EV buyers expect. EVs had 79% more problems than vehicles with internal combustion engines, according to Consumer Reports' 2023 auto reliability survey of 330,000 vehicles. Plug-in hybrids were twice as bad with 146% more flaws than gasoline vehicles. But hybrids scored best, with 26% fewer problems than gasoline-powered vehicles. (💲Link)Some long-haul truck operators are betting that hydrogen fuel will be a better fit for long-distance commercial travel than battery-cell trucks. Why? Longer range and faster refueling. The problem, of course, is that there aren’t many hydrogen fueling stations around. At least not yet. (💲Link)If Trump is returned to office, he will seek to undo much of the Inflation Reduction Act, the landmark climate bill signed last year by President Joe Biden. While the law couldn’t be fully repealed without an act of Congress, Trump 2.0 would likely be able to undermine many of its provisions through the rule-making process. For instance, a future president could set the EV tax credit rules in such a way that no tax credits are actually awarded. (💲Link)The UAW formally launched one of the largest organizing drives in its history with campaigns at 13 automakers, in an effort to leverage record gains from its recent labor deals in Detroit. The UAW plans to target nearly 150,000 workers at U.S. factories owned by large foreign automakers including Toyota and Volkswagen, as well as newer electric-vehicle manufacturers such as Tesla and Rivian. The UAW now represents about 145,000 workers at Ford, GM and Stellantis. The widespread organizing campaigns are a bid to significantly add to its ranks for the first time in decades and rebuild the union’s clout in the auto industry, after company downsizing and outsourcing reduced its U.S. footprint. UAW membership has slipped from a peak of roughly 1.5 million people decades ago to around 400,000 today, a tally that includes non-automotive workers. (💲Link)Washington has effectively built a fortress to keep out Chinese EVs. Former President Donald Trump imposed a 25% tax on Chinese auto imports. President Biden backed that policy and went further, denying them “Buy America” credits that can reduce consumers’ price tag by thousands of dollars. These steps have made it virtually impossible for Chinese automakers to compete with vehicles built in the U.S. or imported from friendly nations, even as they rapidly penetrate other markets. (💲Link)The Tesla Cybertruck is loved and loathed. For fans, it’s a symbol of what Tesla and its CEO Elon Musk stand for: creativity, irreverence, and rebellion. Others see it as an act of hubris. It could be both. The Cybertruck could be Tesla’s magnum opus or its albatross. (💲Link)Tesla’s choice of metal for its Cybertruck—ultrahard stainless steel—has proven challenging to bend and manipulate, further complicating an already difficult launch. (💲Link)

The Boring Company has raised more than $795 million from venture capitalists on Elon Musk’s big idea: underground, multi-station roadways where autonomous vehicles could shoot off individuals to their destination at speeds of 150 miles per hour. But on the ground, after seven years, Boring is only operating a mere 2.4 miles of operational tunnel. Meanwhile, Boring projects from California to Illinois, Texas, Florida, and Maryland have all fizzled or been disbanded. The company seems to have lost the close attention of the man who started it all: Elon Musk. (Link)Lithium’s price slump over the past year has been as dramatic as its climb — and it’s probably not finished yet. The battery material’s benchmark price in China is now down about 80% from its November 2022 record high. At that time, lithium miners were enjoying soaring profits and carmakers were bemoaning surging costs. Now, lithium’s sharp decline, together with steep drops for nickel and cobalt, are driving battery prices to all-time lows, according to BloombergNEF. (💲Link)Yet another benefit of Manual Transmissions: Armed carjacking gang foiled because they couldn't drive Porsche's stick shift. (Link)New Jersey joined 10 states that have adopted a rule set by California to phase out sales of new gasoline-fueled cars and light trucks by the 2035 model year. Under California's Advanced Clean Cars II regulation, automakers would need to ensure 43% of their annual production volume by the 2027 model year is made up of zero-emission vehicles, such as battery-electric, plug-in hybrid and fuel-cell models. The regulation calls for ZEVs and plug-in hybrids to make up 68% by the 2030 model year and 100% by 2035. (💲Link)

Car insurance premiums in Florida have rocketed up *88%* this year, due to:— Higher cost of cars— Increase in fraudulent insurance claims— Higher labor/parts replacement costs. (Link)

Jamin Ball at Altimeter tracks SaaS valuations. Median EV/NTM revenue multiples are sitting at 5.8x. (Link)A plan to reduce traffic in Manhattan’s central business district set the charge for passenger cars to enter the area at $15, with discounts for some drivers who already pay a crossing fee to come into the city. The program, called congestion pricing, is the first of its kind in the US and is expected to raise $1 billion a year to help modernize New York City’s aging transit system. A six-member Traffic Mobility Review Board has been studying how best to implement the new fee for months. The goal is to reduce traffic, decrease air pollution and encourage mass-transit ridership. (💲Link)Neuralink, the Elon Musk-founded company developing implantable chips that can read brain waves, has raised an additional $43 million in venture capital. Neuralink hasn’t disclosed its valuation recently. But in June, Reuters reported that the company was valued at about $5 billion. Founded in 2016, Neuralink has devised a sewing machine-like device capable of implanting ultra-thin threads inside the brain. The threads attach to a custom-designed chip containing electrodes that can read information from groups of neurons. (Link)For the first time ever, a commercial plane flew across the Atlantic Ocean without using fossil fuels. Virgin Atlantic said the test flight from London to New York was powered only by sustainable aviation fuel, or SAF, a broad category of jet fuel that creates fewer carbon emissions than standard kerosene blends. The fuel on this flight was made from waste fats and plant sugars and emits 70% less carbon than petroleum-based jet fuel. (💲Link)

In a year defined by cooling values and economic uncertainty, collectors remained resolute in their willingness to pay top dollar for the rarest cars in the world. (💲Link)

Have a great week,Steve Greenfield

Forwarded this email and not yet a subscriber?

Subscribe Now

Notable & New

📢 On this week's Future of Automotive segment on CBT News: investment firm Coatue just released its investment thesis on artificial intelligence, which sheds light on the dramatic impact AI may have on organizational structures in the future. It’s worth reading through this document with an eye to how technology may transform the car dealer’s operations and cost structure. (💲Link)

It was great catching up with Bhaskar Deol from Automotive Ventures portfolio company eDRV in Atlanta last week! (

Link

)

Enjoying this newsletter? Please share with others!

Companies to Watch

🌟 Zeti helps fleets convert to EVs by making it as simple, easy, and transparent as paying for a utility with their patent-pending pay-per-mile financial technology. (Link)

Upcoming Industry Events