Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | Feb 2 2026 | VIEW ONLINE

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Automotive

In 1908, 253 American automobile manufacturers competed for the market. By 1929, just 44 remained. The assembly line didn’t just change how cars were made. It changed who got to make them. Ford’s Highland Park plant, operational in 1913, slashed the time to build a Model T from 12 hours to 93 minutes. That 90% productivity gain restructured an entire industry. Manufacturers who couldn’t match Ford’s efficiency faced a simple choice : adapt or exit. The consolidation was swift. Between 1908 & 1929, 83% of automakers vanished. Some merged. Most failed. The survivors shared a common trait : they adopted Ford’s methods. General Motors, Chrysler & the handful of remaining independents all built assembly lines. | Tomasz Tunguz

In the presentation touting General Motors' quarterly and full-year 2025 results, the word “tariff” appears 14 times. That’s because tariffs cost GM more than $3 billion, gross, last year. Tariffs account for the majority of the company’s year-over-year decline in profits, and this after the company figured out how to mitigate 40% of tariff impacts through pricing and cost adjustments — which highlights just how big the underlying tariff hit was. | Quartz

KIA Motors said U.S. tariffs cost it 3.3 trillion won ($2.3 billion) last year and the South Korean automaker will roll out incentives to boost sales as competition intensifies. Tariffs totaled about 1 trillion won in the fourth quarter alone, Kia said Wednesday, driving a 32% slump in operating profit from a year earlier to 1.8 trillion won. That missed analyst estimates for 1.9 trillion won and came despite the company reporting its highest-ever fourth-quarter revenue on strong demand for electric and hybrid cars. While South Korea and the US reached a deal to lower import duties to 15% from 25% from Nov. 1, Kia didn’t reap the full benefit because it had already paid the higher rate on inventory sitting in the US, Chief Financial Officer Kim Seung Jun said during a conference call. Shares closed 2.5% lower. | Bloomberg ($)

Toyota CEO Koji Sato warns of seven new challenges to Japanese automakers' global survival:1. Securing the stable procurement of critical resources and components2. Implementing a multipathway approach to achieving carbon neutrality3. Building mechanisms for a circular economy4. Strengthening human resources and their foundational role5. Creating transportation systems premised on the integration of automated driving6. Promoting fundamental reform of automobile-related tax systems7. Enhancing competitiveness across the entire supply chain | Automotive News ($)

Europe’s automotive industry faces a pivotal 2026. Dealers are squeezed by rising costs and weak demand, manufacturers are dealing with overcapacity and Chinese competition, suppliers are bracing for another crisis year and software-defined vehicles are moving from vision to market reality. Throughout 2025, these challenges deepened as economic uncertainty collided with structural transformation, leaving few stakeholders unaffected. In 2026, European automakers face intensifying capacity utilization struggles, particularly at high-wage European plants. Suppliers remain caught between shrinking revenues and mounting electrification investment demands while supply chain pressures persist. The industry’s software transformation extends into another critical phase as the first software-defined vehicles transition from prototypes to production reality. | Automotive News ($)

High costs and continued distress in the automotive supply chain could lead to a wave of supplier consolidations in 2026, industry analysts and executives said. High costs, labor shortages and volatile production schedules have squeezed the finances of many parts makers since the pandemic. Tariffs and geopolitical tensions in 2025 further strained some suppliers by increasing costs and risks. Additionally, many automakers made major changes to their electrification plans after years of massive investments in the supply base. Those pressures are driving some suppliers to consider mergers and acquisitions aimed at making their businesses more cost efficient and less vulnerable to geopolitics and rapid shifts in the marketplace. And as suppliers start feeling more stability after a volatile 2025, expect more of them to pursue deals, said Lenny LaRocca, the U.S. automotive industry leader at KPMG. Supplier financial health has been a major focus for automakers and major Tier 1 parts makers in recent years, and particularly over the past 12 months as the industry adjusted to rapidly changing U.S. trade policy and a pullback in electrification plans. | Automotive News ($)

Genesis has become the latest automaker to abandon a direct-sales model in Europe in favor of a traditional dealership retail system, as the Hyundai Motor Company premium brand enters new markets in an effort to increase sales from 2025’s figure of 2,500. Genesis decided in the second half of 2025 to switch to a dealer distribution model from a direct sales model operated through company-owned showrooms. Genesis is one of a number of automakers who have retreated from a direct-sales, or agency, model, in which the automaker controls the inventory rather than a dealer. Those distribution models gained popularity in recent years, as automakers sought more data from customers and more efficiencies — and lower costs — in the distribution system. But the market has swung toward buyers in the past two years, as the semiconductor shortage removed supply constraints and the economy tightened. At the same time, the agency model rollout proved more complicated than expected. With the more flexible dealership model giving more leeway for incentives, automakers including Volkswagen and Stellantis have rolled back agency or delaying it indefinitely. | Automotive News ($)

Tesla will end production of its high-end Model S sedan and Model X crossover next quarter and use the California factory space to build an Optimus robot assembly line, CEO Elon Musk said Jan. 28. Killing its first volume models is part of Tesla’s transition from an automotive company to a physical-AI provider focused on personal autonomous vehicles, robotaxis and humanoid robots, Musk said on the company’s fourth-quarter earnings call. “It’s time to basically bring the Model S and X programs to an end with an honorable discharge because we’re really moving into a future that is based on autonomy,” Musk said. The ultimate goal of Tesla’s new business model is to transform the global economy to one where so much wealth is produced by autonomous robots that everyone will have high income, Musk said. Musk predicted that in the future only 5 percent of driving — and perhaps as low as 1 percent — will be done by humans and the vast majority will come from autonomous vehicles. Musk gave no timeline for that transition. | Automotive News ($)On Wednesday, Tesla’s chief executive, Elon Musk, announced that the company would stop making the Model S and the Model X, a roomier vehicle that came out three years after the S, and use the space in a California factory for robot production. The decision followed several years of sluggish sales for the two cars. Almost all the cars that Tesla sells are either the Model Y or the Model 3, which are smaller and more affordable than the S and X. Despite its recent weak sales, auto executives and analysts widely regard the Model S as one of the most important cars the industry has produced in its 125-year history. It was the modern equivalent of Ford Motor Company’s Model T. Both cars upended conventional notions of what a car is, how it could be made and what it could cost. There were electric vehicles before the Model S, but they were niche products sold in very small numbers. Most were designed to cut tailpipe emissions to satisfy laws and regulations and appealed to a small group of environmentally conscious drivers. In a word, they were boring. Tesla designed the Model S to be sleek and exciting. Its electric motor gave it acceleration that had been available only in a few specialized cars, hence the sensation Mr. Ramsey felt in that first ride. The Model S was not cheap when it went on sale for $57,400 in 2012, but it cost a lot less than the sports cars it could outrun. The car now starts at $95,000. The Model S became a sales and cultural sensation, redefining what a luxury car was, and upended a segment that the likes of Audi, BMW, Mercedes-Benz and Lexus had dominated for more than two decades. But the impact of the Model S went far beyond its sales figures. It was a software-defined car, meaning a central computer controlled how all of its components worked. These days, virtually every automaker is seeking to put software at the center of its vehicles. Many cars can now connect to the internet, but Tesla was the first company to send software updates wirelessly to its cars. Like an Apple iPhone, the Model S could get new features overnight. Tesla used the updates to improve how the brakes worked or increase how far the car could travel on a charge. | The New York Times ($)

Three of Elon Musk’s companies — SpaceX, xAI, and Tesla — are in play for a potential merger. While the talks appear to be in the early stage, according to reports from Bloomberg and Reuters, it could eventually lead to at least one company folding into SpaceX. Two scenarios are being hashed out. In one, SpaceX and Tesla would merge, per Bloomberg, citing unnamed insiders. In another, SpaceX and aXI (which already owns Musk’s social media platform X) would combine. According to reporting by Reuters, a merger between SpaceX and xAI could take place ahead of a planned SpaceX IPO this year. This would bring products like the Grok chatbot, X platform, STARLINK satellites, and SpaceX rockets together under one corporation. Company representatives from SpaceX and xAI have not discussed this possibility in public. However, recent filings show that two new corporate entities were established in Nevada on January 21, which are called K2 Merger Sub Inc. and K2 Merger Sub 2 LLC. This suggests that Musk is keeping all options open. | TechCrunch ($)

Tesla mission has been updated to "amazing abundance" and its investment budget will more than double. The company's fourth-quarter results were weak, with overall operating margin falling to 5.7% and GAAP earnings slumping by 60% year over year. Tesla plans to invest about $2 billion in xAI, Musk's own artificial intelligence venture, and will burn a lot of cash this year, with a capex budget of $20 billion-plus. | Bloomberg ($)

Tesla CEO Elon Musk has signaled he intends to remain involved in politics, including during the 2026 midterm elections. His political engagement and online identity are separate from his Tesla work, analysts say, but they’ve become intertwined to the company’s detriment. Tesla’s stock price has fallen as Musk’s public statements and corporate scandals have amassed controversy, and this month the company posted an underwhelming annual deliveries report, indicating sales are down. The company has now lost its status as the world’s leading seller of EVs (to China's BYD). Tesla’s continued struggles demonstrate the breadth of the backlash Musk’s political involvement ignited last year, and its potential to trigger lasting brand damage. A Yale University study last year estimated Musk’s political activity cost Tesla sales of more than 1 million vehicles. | The Washington Post ($)

Before Elon Musk, most electric vehicles seemed less like an alternative to gasoline than an argument in its favor. The sad state of affairs for EVs for many years was that they were slow, impractical, and largely enticing only if you lived with copious guilt over your carbon emissions. Then Tesla came out with the Tesla Model S. The speedy, high-tech sedan didn’t just leave other EVs in the dust; it could compete with the likes of BMW and Mercedes-Benz. “EVs went from ‘eating your vegetables’ to getting you super-car performance in a vehicle that’s luxurious and quiet,” says Jake Fisher, the senior director of auto testing at Consumer Reports. The Model S proved something that’s now easy to take for granted: EVs can work, and ordinary people might actually want one. A year after the Model S’s 2012 debut, Musk personally drove one coast-to-coast to prove that it was just as capable as a gas car. Now the Model S is going away. During Tesla’s earnings call this week, Musk announced that his company will soon stop manufacturing the car that launched his empire. “That is slightly sad,” he acknowledged on the call. In a sense, it was inevitable. Tech products get killed off all the time to make way for something better; Apple no longer sells the iPhone 4. Indeed, the Tesla Model S has become irrelevant and overpriced compared with the company’s newer cars. (As a Road & Track headline put it in 2023, “The Tesla Model S Has Lived Long Enough to See Itself Become a Villain.”) Nearly all of Tesla’s global sales come from the more affordable Model Y and Model 3, leaving the original Model S unceremoniously lumped in with “Other Models” in the company’s financial reports. | The Atlantic ($)

For years, Elon Musk has insisted Tesla isn’t really an automaker. Slowly but surely, that statement is becoming more accurate. On Wednesday, the Texas-based company posted its first-ever annual revenue decline, with 2025 sales falling 3% to $94.8 billion. Behind the drop was a 10% dip in automotive revenue, as weaker EV demand pushed vehicle deliveries and selling prices lower. Automotive makes up nearly three-quarters (73%) of Tesla’s business… but it seems Elon Musk would like at least some of that share to be replaced by robot sales. On Wednesday, Musk said Tesla will wind down production of its two priciest EV models next quarter, converting that factory space to produce Optimus (though the humanoid robot won’t be commercially available until late 2027). | Sherwood

After nine confirmed deaths in car accidents in which cheap, Chinese-made airbag parts blew apart—including two in the past two months—federal regulators issued an unusual and stern safety warning Friday, telling all used-car owners in the U.S. to try to get to the bottom of their vehicles’ maintenance histories. The unsettling reality: It isn’t easy to know where a used car’s air bag came from. For months, federal auto-safety regulators and investigators have been trying to assess the potential danger of substandard air-bag parts from an obscure supplier in China to understand how their products made their way into the U.S. They don’t yet know precisely how many of the air bags from the company, DTN Airbag, are in cars and trucks in America. “Anyone who buys a used vehicle that’s been in a crash so severe that the airbags deployed is really rolling the dice,” said Adam Raviv, former chief counsel at the National Highway Traffic Safety Administration (NHTSA), the U.S. auto-safety regulator. On Friday, NHTSA took the extraordinary step of launching a dedicated resource page about DTN’s air-bag parts, even though the agency estimates that as few as 10,000 might be on American roads. The Chinese company makes airbag inflaters, which contain hazardous chemicals that ignite during a crash to fill an airbag with gas rapidly. | The Wall Street Journal ($)

Sales of fully electric cars surpassed those of petrol-only vehicles in the European Union for the first time in December, data from ‌the European Automobile Manufacturers' Association (ACEA) showed on Tuesday, even as hybrids held onto the largest overall share of the market. The data underscores how the bloc is shifting slowly towards electric and hybrid vehicles, even as policymakers have proposed loosening emission regulations that should allow vehicles with combustion engines to stick around for longer. Fully electric vehicles made up 22.6% of cars registered in the EU last month, edging out petrol cars ‍on 22.5%. Gasoline-electric hybrids, including plug-in hybrids that can go limited distances on battery power alone, were the top group with 44%. | Reuters ($)

For years, EV drivers in America had plenty of complaints about fast-charging their electric cars. Many chargers were broken or glitchy; at the same time, drivers had to juggle several different smartphone apps and find chargers that matched the particular charging port on their car. But now, even as EV sales are slumping, deployment of fast chargers is booming. According to a report released Wednesday by the charging data company Paren, the fast-charging network increased more than 30 percent in 2025, with over 18,000 new ports installed. (Like a gas station with multiple pumps, each charging station can have multiple ports for cars to plug in.) The country now has over 13,200 public fast-charging stations dotting the country — with more than 3,300 of those stations installed just last year. It’s a far cry from a few years ago, when gaps in the charging network prevented drivers in some areas from confidently taking road trips. The issue was particularly pronounced for drivers of non-Tesla EVs — while Tesla’s well-known “Superchargers” dotted the country, drivers of cars from Ford or Kia or Toyota had to make use of a complex mix of different chargers made by different companies. | The Washington Post ($)Data collected since the congestion pricing program began in January 2025 show that Manhattan’s streets are indeed flowing faster, with taxis and buses reporting quicker trips inside the congestion relief zone. The majority of drivers’ time savings has accrued to those traveling outside the toll zone entirely — for instance, those commuting from Brooklyn to Queens or within Northern New Jersey. There is no evidence that drivers seeking to avoid the toll have slowed journeys in places like Staten Island or the Bronx, and roadways throughout the NY tri-state area got at least a little bit faster. | Bloomberg ($)

Do you happen to be shopping for a race track? You’re in luck: Chuckwalla Raceway is for sale for $26 million. Chuckwalla’s does have one thing many tracks don’t: its own paved runway that also serves as a drag strip, complete with staging lanes. As the listing page notes, the site is conveniently located just off I-10 almost smack-dab between Los Angeles and Phoenix. | The Drive

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China

We are witnessing a great reversal in global technology flows. For decades, China lagged behind the west. American and European companies sold products to Chinese consumers and set up factories in the country, lured by its vast market and low labour costs. Apple and Tesla built mega-factories in cities like Zhengzhou and Shanghai. General Motors and Volkswagen established lucrative joint ventures with Chinese automakers. But the diffusion of technology between China and the west is increasingly a two-way street. Across a growing array of products — electric vehicles, batteries, drones, rare earth magnets — it is now China that stands at the global frontier. None of this is an accident. China has long pursued a deliberate industrial strategy aimed at acquiring technology from global leaders and upgrading the country’s economy. In exchange for market access, China pushed foreign companies to share technology and know-how in everything from telecommunications equipment to welding techniques. Western companies trained not only Chinese factory workers but a whole generation of Chinese managers and engineers. They helped Chinese suppliers move up the value chain. This shift is most apparent in EVs and batteries, where China has become the clear global leader. | Financial Times ($)

Chinese automakers have quietly boxed in the U.S. market — gaining share in Mexico, testing Canada and laying the groundwork for an eventual U.S. debut. The question is no longer if they will enter, but when and how, analysts say. In Mexico, shoppers can choose imported Chinese models from roughly 30 brands, including BYD’s $23,000 Dolphin EV. Canada, which already has Shanghai-built Teslas on the road, reached a Jan. 16 deal to import up to 49,000 Chinese-made EVs annually at reduced tariffs. In the U.S., China’s Zhejiang Geely Holding Group already has a manufacturing foothold through its Volvo Cars factory in South Carolina, which produces premium vehicles. But the real prize, analysts say, is the broader U.S. market, where Chinese automakers remain largely locked out by a tariff wall. That wall is now under pressure from China’s aggressive search for export markets and U.S. demand for more affordable vehicles. “Personally, I don’t think it’s a matter of if — it’s a matter of when and how," said Shea Burns, an automotive partner at AlixPartners. China’s entry would likely come through electric vehicles, where it has an edge in cost and technology, Burns said, possibly through a joint venture with legacy automakers. President Donald Trump has said Chinese automakers are welcome to build in the U.S. while criticizing Canada’s decision to allow reduced tariffs for a small “If they want to come in and build a plant and hire you and hire your friends and your neighbors, that’s great. I love that,” Trump said during a Jan. 13 speech in Detroit. “Let China come in.” Trump’s posture underscores why local factories, not imports, are the most viable entry path for Chinese brands, analysts said. | Automotive News ($)

China managed to keep overall economic growth steady at 5% last year thanks to robust exports. The country is making extraordinary leaps in cutting-edge technology, from artificial intelligence to robotics. Its ability to produce everything from rare-earth minerals to commercial ships is giving it a leg up in its trade war with the U.S. But its relentless pursuit of growth through manufacturing has also created a lopsided economy, with much of it stuck in a deflationary spiral. China’s GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate demand at home. Corporate filings show profits shrinking at companies in a wide range of industries, including steel, concrete, electric vehicles, robotics, condiments and cosmetics. Profit margins among publicly traded companies in China are at their lowest levels since 2009, according to a FactSet index of 5,000 mainland-domiciled firms. Fixed-asset investment—which tracks spending on assets such as homes, factories and roads—fell in 2025 for the first time on record. The risk is that China could get stuck in a prolonged period of stagnation similar to what Japan experienced during the 1990s and early 2000s—a mindset that becomes ingrained over time and even harder to shift. | The Wall Street Journal ($)

Canada’s decision this month to give Chinese carmakers a toehold in the country’s car market may be an ominous development for U.S. automakers that are already struggling to stay relevant outside North America. General Motors and Ford Motor Company — the two largest U.S.-based car manufacturers — have been steadily losing customers in Asia, Europe and Latin America, as Chinese carmakers have gained ground. Now Canada plans to lower tariffs on a limited number of Chinese-made vehicles, potentially giving companies like BYD, SAIC Motor or Geely a small but significant presence on the United States’ northern border after already building a thriving business in Mexico and much of Latin America. If they lose significant ground to Chinese companies in Canada, Mexico and other countries where they once dominated, Ford and G.M. could gradually become niche manufacturers, said Erik Gordon, a professor at the University of Michigan - Stephen M. Ross School of Business. They will end up primarily making and selling large pickup trucks and sport-utility vehicles favored by many Americans but that tend to sell less well in much of the rest of the world. | The New York Times ($)

Chinese electric vehicle giant BYD plans a big leap into international markets this year, eyeing further expansion in Europe and possibly Canada, as international sales supersede domestic demand as its profit engine. Sales outside China are expected to surge 24 percent to 1.3 million vehicles in 2026, following a huge expansion the year before, the company said. With a protracted price war in the Chinese domestic car market causing domestic sales to slide, BYD believes overseas expansion can shore up its overall sales as well as protect profit. At its Nov. 5 shareholders meeting, Chairman Wang Chuanfu said that was partly driving the new focus on international expansion. | Automotive News ($)

Volkswagen Group plans to increase exports of cars made in China as the automaker tries to benefit from the Asian country’s low production costs amid a bruising price war there. VW has started shipping vehicles from China to the Middle East and Southeast Asia. It’s also eyeing selling its new Chinese models in Africa and South America, CEO Oliver Blume told reporters in Berlin. The automaker has been overhauling its presence in China to better compete in a market where local automakers led by BYD have taken over in electric vehicles. The company has slashed manufacturing costs by shifting more research and development to China and by partnering with local software manufacturer XPENG. VW plans to introduce 20 new electrified vehicles in the world’s biggest car market this year. The push is meant to help arrest a sales slide that slashed the company’s Chinese deliveries to around 2.7 million last year, from more than 4 million before the pandemic. | Automotive News ($)

Ford’s decision to widen its relationship with Chinese battery maker CATL to produce energy storage batteries has angered members of Congress and fellow Detroit automakers. The Dearborn, Michigan-based carmaker on Tuesday said it was setting up a new battery energy storage subsidiary, Ford Energy, following its announcement last month that it was converting an EV battery plant in Kentucky into an energy storage battery facility using licensed CATL technology. Ford in 2023 announced its original partnership with CATL to produce low-cost lithium iron phosphate (LFP) EV batteries at a plant in Marshall, Michigan, which is set to begin operations this year. The latest move is designed to enable the carmaker to supply energy storage batteries for large AI data centre projects and mitigate the losses from its ill-fated EV transition. However, it has been met with opposition from members of Congress who were already unhappy with Ford’s existing partnership with CATL, which was designated by the Pentagon last year as having alleged links to the Chinese military. CATL has denied having such links. | Financial Times ($)

Just days after Donald Trump yet again called the Canada-United States-Mexico Agreement “irrelevant,” Prime Minister Mark Carney brokered a deal with Chinese President Xi Jinping to allow 49,000 Chinese electric vehicles into Canada at a 6.1 per cent tariff rate, down from 100 per cent. The deal was made on the condition that China would drop the bulk of its tariffs against Canada, including temporarily reducing the levy on canola seeds from a prohibitive 84 per cent to 15 per cent, and eliminating all tariffs on lobsters, crabs and peas. It’s a bold de-escalation in a decade of geopolitical tensions with China. That’s a good thing. The new deal will increase affordability for Canadians and provide relief for our Atlantic fisheries and Western farmers at a time when our economic model is under attack. While many welcomed the massive tariff reductions on Canadian exports, those in Ontario’s automotive sector, as well as Premier Doug Ford, say the deal will undermine Canada’s struggling auto-manufacturing industry. Critics of the deal are concerned that China could eventually flood the Canadian market with cheaply made EVs, squashing the market for, and production of, Canadian-made vehicles. Others worry Trump will take offence and turn sour in his trade discussions with Canada, potentially pulling the U.S. out of CUSMA. Some think the Chinese cars are going to spy on us. But given the state of Canada’s auto sector and the increasingly toxic relationship we tolerate with the U.S., we have more to gain from this deal than we have to lose. | Maclean's

The Xiaomi Technology SU7 Max—like other Chinese-made cars—is effectively blocked from the U.S. market. And yet, late last year, The Wall Street Journal writer Joanna Stern spent two weeks test-driving one of China’s hottest cars around the mean streets of New Jersey. A friend who previously worked at Xiaomi bought the car and got a temporary permit to drive it in the U.S. He generously let Joanna take it for an extended spin. Her time with the car confirmed what experts in the auto industry have long been saying: Holy crap, China is winning the digitally enhanced electric-car race. Chinese EV makers such as Xiaomi, BYD and GEELY have earned global accolades because their cars deliver longer battery ranges and deeply integrated digital platforms. We’re talking software that feels smooth like a brand new smartphone, not a screen you have to jab five times to load a map. Plus, they often cost tens of thousands of dollars less than Western competitors. In Europe and Mexico, they’re blowing past Tesla and other EV rivals. | The Wall Street Journal ($)

Chinese automakers built nearly one in 10 passenger cars sold in Europe last month, a record share that caps a year of rapid growth led by brisk sales of hybrid and battery-powered vehicles. With December’s 9.5 percent share of the European car market, Chinese brands outsold South Korean rivals, including KIA Motors, on a quarterly basis for the first time, based on figures from researcher Dataforce GmbH. BYD and its peers are poised to make further inroads as trade barriers fall and a Chinese export push accelerates. The advance was strongest for the electrified cars that account for the bulk of Europe’s growth. Chinese automakers used their competitive edge in battery technology to win customers for EVs and hybrid-electric vehicles from Spain to Greece, Italy and the U.K. | Automotive News ($)

Chinese automaker BYD has quickly grown to become the world’s largest electric-vehicle maker, outselling Tesla on a global scale in 2025. The company, founded as a rechargeable battery maker in 1995 and headquartered in Shenzhen, China, has been singled out in recent years as an existential threat to American, European and Japanese automakers. BYD vehicles are sold in over 112 cities across 102 countries spanning six continents, according to its website, and are soon to enter the Canadian market as part of a new deal inked by Canadian Prime Minister Mark Carney. Our neighbor to the north opened the door, slightly, to Chinese automakers recently, saying Canada will allow up to 49,000 Chinese electric vehicles into its market, with the most-favored-nation tariff rate of 6.1%. That represents less than 3% of the Canadian market for new vehicles based on the market size between 2023-2024. While other brands make EVs in China, the number of BYDs driven worldwide increases each year. Data released Jan. 9 from the China Passenger Car Association showed that overall car exports from China jumped 19% to 5.79 million vehicles in 2025, while exports of pure battery electric vehicles rose 49% to 1.52 million vehicles. According to AlixPartners, Chinese car brands are expected to make up 30% of the global new vehicle market by 2030. | Detroit Free Press ($)

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Autonomy & Robotics

Autonomous vehicle startup Waabi has raised $1 billion and struck a partnership with Uber to deploy self-driving cars on the ride-hailing platform — the company’s first expansion beyond autonomous trucking. The funding consists of an oversubscribed $750 million Series C round co-led by Khosla Ventures and G2 Venture Partners and roughly $250 million in milestone-based capital from Uber to support the deployment of 25,000 or more Waabi Driver-powered robotaxis exclusively on its platform. The companies did not provide a timeline for such a large-scale deployment. The partnership represents a bet that the startup’s AI technology can succeed where others have struggled — scaling across multiple self-driving verticals with a single technology stack. While competitors like Waymo previously attempted both robotaxis and trucking before shutting down its freight program, Waabi founder and CEO Raquel Urtasun says her company’s capital-efficient approach and generalizable AI architecture give it a unique advantage to tackle both markets simultaneously. | TechCrunch ($)

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Artificial Intelligence (AI)

When you ask ChatGPT and other AIs to recommend a product or service, odds are the top answers were put there by humans. This doesn’t mean artificial intelligence is lying to you. That first answer is probably a worthwhile option. But a growing number of small and midsize businesses are paying big bucks to get favorable mentions from chatbots. In some ways, this is an evolution of SEO, or search engine optimization—the strategies companies have been using for decades to appear atop Google results. But owing to the peculiarities of AI’s large language models, SEO practitioners have had to adopt new strategies. They call this generative engine optimization, aka GEO. (Some call it AEO, as in “answer engine optimization,” and still others have their own names for it.) The flourishing of this industry highlights something everyone seeking advice from a chatbot should know: A recommendation from AI isn’t verified the way one from a human might be. Today’s AIs are shallow readers of the internet, and their responses can be manipulated. The creators of ChatGPT and other chatbots strive to source their answers from reputable sources, and attempt to weight sources by their veracity. But users of these chatbots should take all their advice with a grain of salt. If the answer really matters, seek a second opinion from a human-powered platform like a trusted news source, online reviews—or a real-life expert. | The Wall Street Journal ($)

OpenAI is laying the groundwork for a public listing in the fourth quarter of this year, people familiar with the matter said, accelerating its plans as competition with rival Anthropic intensifies. The $500 billion startup is holding informal talks with Wall Street banks about a potential initial public offering, people familiar with the matter said, and is growing its finance team. It is expected to be a blockbuster year for stock-market debuts after a recent drought, and some on Wall Street are speculating that 2026 could be the biggest year ever for IPOs. OpenAI, rival Anthropic and SpaceX are among the most closely watched tech darlings that could go public, though listing activity also has picked up for smaller companies.| The Wall Street Journal ($)

⚓️

Marine

Just before Christmas, the Pentagon quietly released its annual report on the Chinese armed forces. The public document, based on classified intelligence assessments, was quickly picked over by military analysts around the world. Buried on page 16, they found a startling statement: China plans to build six new aircraft-carriers before 2035. That prediction would see China building aircraft-carriers at more than twice the clip of America, which plans to build only three of them over the same period. But America also plans to retire three carriers in the coming years, meaning that by 2035 America will have 11 such vessels to China’s nine. And because China will probably concentrate its navy in Asia, Chinese carriers will soon outnumber American ones in the Pacific. | The Economist ($)

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Aviation & Space

Elon Musk’s rocket-maker SpaceX and artificial-intelligence startup xAI are planning to merge into one company, people familiar with the matter said, further consolidating the billionaire’s business empire. SpaceX executives have started to tell some investors about the planned tie-up, one of the people said. It is possible that a merger won’t happen and talks could fall apart or that Musk could decide on a different path. Both companies are privately held, and the math of a potential deal wasn’t immediately clear. xAI sought to raise $15 billion from investors for a $230 billion valuation last year, while SpaceX was seeking an $800 billion valuation in a December tender offer, The Wall Street Journal previously reported. | The Wall Street Journal ($)

📚

Investing

Andreessen Horowitz published their inaugural “State of Markets” slide deck. Amazing to see the difference between top-quartile and top 5% venture fund performance.

| Andreessen Horowitz

Nat Bullard has published his annual report on the state of decarbonization. 200 slides that are a must-read | Nat Bullard

Jamin Ball walks us through why SaaS multiples are so low: The median NTM revenue multiple for the cloud software universe is 4.1x. That’s the lowest it’s been in 10 years (it was about the same very briefly in 2016, when the Fed started hiking rates for the first time after the GFC ZIRP period). The current median FCF multiple is 18.9x. The previous low in the last 10 years was ~26x! So what’s going on? Mainly, confidence in the SaaS business model has shattered. SaaS businesses were long thought of as “cash flow annuities.” Loose money early on, flip profitable, and then every year print cash predictably. You could then calculate the “intrinsic value” of a SaaS business by summing the present value of every annual cash flow, with a terminal value assumption. More specifically, calculate the present value of the next 10 years of cash flows (discounted back to today), and make an assumption of the terminal value (i.e., year 11 onward). But these assumptions are being questioned, which is leading to cratering valuations. | Clouded Judgement

🚘 Car of the Week

Our Automotive Ventures "Car of the Week": a 1985 Ferrari 288 GTO. | RM Sotheby's

Have a great week,Steve Greenfield

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📰 In The News

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Automotive Ventures is very excited to announce our 2nd investment in SparkServ and to welcome New Stack Ventures to the cap table. | SparkServ

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On this week's Automotive Ventures "Future of Mobility" segment on CBT News, Steve recaps our recent Future of Mobility Conference held at the Porsche Experience Center Atlanta. | CBT News

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👀 Automotive Ventures Company to Watch

🌟 RockED is the premier people development platform for the automotive industry. | RockED

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