Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | Jan 13 2025 | VIEW ONLINE

The latest in our series of "What we've learned" as VC investors. This week's topic: The real work starts once you've made the investment.

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What We're Reading:

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Automotive

U.S. light-vehicle sales reached 16 million in 2024, a 2.5% gain from 15.6 million in 2023 and the most since 2019. Fourth-quarter sales jumped 7.1%. | Automotive News ($)

Automotive News reports on the best-selling vehicles for 2024. | Automotive News ($)

U.S. consumers will pay more to insure their vehicles in 2025 than ever before, according to a report by ValuePenguin. The average cost of auto insurance is expected to reach a record high of $2,101 per year or $175 per month for full coverage, the data showed, with rate increases rising for the seventh consecutive year. | PropertyCasualty360

The INRIX Global Traffic Scorecard shows that the average driver in NYC lost 102 hours to traffic last year — that’s more than four whole days spent sitting in gridlock — equal to Chicago’s traffic-delay times and just shy of the 105 hours recorded for Istanbul. | Sherwood

On January 5th this year, New York City implemented congestion pricing—the first of its kind in America. Congested cities across the country will be taking note. It is too soon to say what effect the pricing will have on New York’s roads, but three charts below offer some clues from the first 24 hours. | The Economist ($)Tesla has topped American University's 2024 Made In America Index, with the Model 3 Performance being the most "American-made" vehicle, followed by other Tesla models. The Ford Mustang GT, Honda Passport and Jeep Wrangler also ranked high. Since 2015, foreign automakers such as Volkswagen and Toyota have increased US content, while domestic automakers have seen a decline. | Detroit Free PressSony Honda Mobility will bypass U.S. auto dealers to sell its first vehicle from its new automotive brand Afeela. The joint venture from Sony and Honda announced its plan to forgo using a conventional dealer network to distribute its midsize electric sedan. “We are taking a direct consumer approach to simplify the customer experience and enhance your satisfaction,” said Shugo Yamaguchi, CEO of Sony Honda Mobility of America. “All processes from reservation to sales are taken care of through our website.” | Automotive News ($)

Software woes have delayed recent launches at Volvo and GM, among others. Volkswagen executives grew so frustrated with their internal software development that they signed a $5 billion tie up with Rivian last summer. Traditional carmakers struggle with updates for the same reason big banks have spent billions modernizing back office technology: sprawling legacy systems. While Tesla started with a clean slate, incumbent carmakers have to wrangle old electrical systems and production lines, cross firewalls and integrate software code written by suppliers. | Financial Times ($)Tesla could collect more than €1 billion ($1 billion) in compensation from rival automakers that need help meeting tougher pollution standards in the European Union this year, UBS Group analysts said. Tesla will pool the fleet of electric vehicles it sells this year with at least five other manufacturers, including Stellantis, Toyota, Ford, Mazda and Subaru, according to EU documents released Jan. 6. The arrangement allows automakers to average out the emissions of their fleets, with those selling fewer EVs compensating companies such as Tesla that are below the EU limit for CO2 emissions. Mercedes-Benz is joining with EV-heavy Volvo Cars and its Polestar electric sister brand in another EU pool. | Automotive News ($)

Twenty miles outside Corpus Christi, Texas — an area so dry the local water company distributes shower timers at high school football games — the world’s richest man is nearly done building a lithium refinery that could require as much as 8 million gallons of water per day. Tesla still doesn't have a contract for the water needed to operate the facility, presenting a hurdle for Chief Executive Officer Elon Musk’s goal of turning lithium into chemical products used to make electric vehicle batteries. | Bloomberg ($)

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Electric Vehicles (EVs)

U.S. EV sales will continue to grow in the year ahead, accounting for 1 in 4 vehicles sold in 2025, according to Cox Automotive’s 2025 Outlook. Cox Automotive predicts that EVs will account for approximately 10% of the market total in the year ahead, up from roughly 7.5% in 2024. Hybrids and plug-ins will account for about 15% of the market, and sales of ICE vehicles will tumble to 75% of total volume, the lowest level on record. | Electrek

The lack of cheap EVs and the reliance on combustion engines is putting Europe's plan to ban new petrol cars by 2035 at risk. | WiredThe world’s largest EV battery maker was designated as a “Chinese Military Company” by the United States Department of Defense. Contemporary Amperex Technology Co., Limited (CATL), which supplies EV batteries to Tesla, BMW, Ford, Volkswagen, Toyota, Nissan, Honda, and many others, is now on the U.S. blacklist. In the first 11 months of 2024, CATL accounted for nearly 37% of all electric vehicle batteries sold globally. | Electrek

🇨🇳 China

Excess capacity among carmakers in China is driving the world’s largest auto market into a shakeout phase. Overall, car sales in China rose 5.5% last year to 22.9 million vehicles. Yet that demand is far short of the capacity companies have built up, leading them to cut prices and push into overseas markets to stay in the game. Among the early losers are foreign brands. GM, Volkswagen and Toyota have been bleeding market share to homegrown rivals. Domestic brands accounted for 61% of the local market last year, up 8.6% from a year earlier. But local brands face a reckoning too. Last year, 23 EV brands either exited China or were consolidated into other brands, while a dozen new brands came to market. 112 brands sold at least one EV in the first nine months of last year. Carmakers in China last year used only about half their capacity. | The Wall Street Journal ($)China's auto exports are estimated to slow notably this year after holding the export crown for a second year in 2024, with no growth predicted for electric vehicle exports. With car exports up 25% to 4.8 million units, China probably ranked as the world's largest auto exporter ahead of Japan for a second consecutive year in 2024 despite additional tariffs on China-made electric vehicles the European Union introduced in late October. Japan's auto exports fell 4.3% to 3.82 million vehicles in the first 11 months of 2024. But export growth is seen cooling to 10% this year, with an expected drop in shipments to Russia adding to tariff pressure in Europe, said Cui Dongshu, secretary general of CPCA, and EV exports are forecast to see "zero growth." | Reuters ($)China is winning the race for green supremacy. China’s green advantage has deep roots. It was an early investor in critical minerals. As the energy transition gained steam, it stepped up green subsidies, tax credits and investments. Its annual clean energy investment rose by 40% in 2023 to $890 billion, becoming its main growth driver. Its green tech is being heavily deployed at home. Beijing achieved its target of having 1,200 gigawatts of installed solar and wind capacity — enough to power hundreds of millions of homes — six years early. EVs are expected to outsell petrol and diesel cars in China this year, 10 years ahead of its target. At the same time, China accounts for 30% of global carbon emissions. The rest of the world has little choice but to take advantage of low-cost Chinese wind and solar technologies. Limited access to critical minerals and a high cost of capital mean advanced economies cannot now meet their green goals without Beijing. | Financial Times ($)

🤖 Autonomy & Robotics

A group representing self-driving car companies called on the U.S. government to do more to speed the deployment of autonomous vehicles and remove barriers to adoption. "The federal government is the one that needs to lead when it comes to vehicle design, construction and performance, and we just have not seen enough action out of the federal government in recent years," Jeff Farrah, who heads the Autonomous Vehicle Industry Association, said in an interview. The group includes Volkswagen, Ford, Alphabet's Waymo, Amazon's Zoox, Uber, and others. | Reuters ($)

With Trump’s inauguration approaching — and with Tesla chief executive Elon Musk at his side and betting his own company’s future on its robotaxi — self-driving-car executives are feeling optimistic. Executives viewed officials in Trump’s first term as friendly. Now, with vehicles on the road carrying paying customers, the executives are excited by the prospect of Republicans using their new power to set standards that will help them expand from a handful of cities to communities across the nation. | The Washington Post ($)

Uber and Lyft gave up on big plans to develop their own driverless taxis years ago. Now, they are revamping their businesses to accommodate competitors who may have figured it out. The ride-hailing leaders are preparing to bring driverless taxis to your door with new app features. They are building infrastructure to maintain the high-tech taxis and training human support staff to handle riders without drivers. Both companies will have driverless cars-from Alphabet’s Waymo and others—on their apps this year. In the coming months, riders in Austin, Texas, and Atlanta will be able to hail a Waymo through the Uber app. Lyft plans to offer May Mobility’s driverless taxis in Atlanta. | The Wall Street Journal ($)At CES 2025, German Bionic announced the Apogee Ultra, a new robotic exoskeleton it claims is the “world’s most powerful.” It offers up to 80 pounds of dynamic lift assistance. That means a payload of 70 pounds feels more like nine to 11 pounds to the lifter’s lower back. In addition to lift assistance, the Apogee Ultra also assists walks, making a 10-mile journey feel more like eight. | TechCrunch ($)

Vay is hitting the accelerator on its driverless car-sharing service in Las Vegas. The Berlin-based startup, which uses teleoperations technology that lets humans pilot empty vehicles to customers, has been operating a small commercial fleet of retrofitted Kia e-Niro vehicles in certain parts of Las Vegas since January 2024. When customers open the Vay app and hail a car, it arrives without a human behind the wheel. Once the Vay vehicle arrives, the customer hops in and takes over manual control of the car. Customers drive themselves to their destination. Once they’re finished, the teleops driver pilots the vehicle back. | Tech Crunch ($)

🛴 Micromobility

Almost all of the bicycles sold in the U.S. are imported, and most of those are made in China or assembled from Chinese parts, according to industry estimates and trade data. A typical bicycle is made of 30 to 40 parts, most of them from different Chinese manufacturers. | The Wall Street Journal ($)

🚜 Industrial Tech

In 2023, John Deere’s total revenues rose to a record $61.3 billion, but sales slumped 16% in the last fiscal year as farmers tightened their purse strings and invested less into Deere-branded machinery and equipment, which accounts for ~87% of the company’s revenue. The company’s most expensive tractor, the 9RX 830, lists for $1.228 million. Interestingly, the company aims to make 10% of its annual revenue from software subscriptions by 2030 — quite the shift for a business that’s still almost exclusively known for making things that chop, plow, mow, move, and spray. | Sherwood

At CES 2025 John Deere announced:

An electric autonomous/electric robot lawnmower meant for commercial-grade landscaping.
An autonomous 5ML orchard tractor that can blast spray crops.
An autonomous articulated dump truck built for quarry operations.

| TechCrunch ($)

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Aviation & Space

In Ukraine, both sides are deploying millions of low-cost drones, which play a role in combat as both scouts and as weapons. The US Army, long considered a leader in this field, has been following events in Ukraine closely. But the Pentagon is only acquiring small numbers of drones at high cost. Why are American drones so expensive, and can prices be brought down? | The Economist ($)

SpaceX disclosed striking data about Starlink V3 in its 2024 Progress Report. Each V3 satellite, for example, delivers 1 Terabit per second (Tbps) of downlink speed, ten times that of V2 Minis. In other words, given the improved satellites and the larger launch vehicle, a Starship V3 launch should add 60 Tbps to the network, over twenty times a V2 Mini launch. ARK Investment Management LLC believes that SpaceX continues to ride down Wright’s Law’s cost curve for satellite bandwidth capacity, as shown below. Clearly, competitors are finding it difficult to match SpaceX’s cost declines. As ARK published in 2023, based on Wright’s Law, satellite bandwidth costs should decline ~45% for every cumulative doubling in Gigabits per second in orbit. Since 2004, the cost of satellite bandwidth has dropped 7,500-fold, from $300,000,000 to $40,000/Gigabits per second (Gbps). Thanks to Starship, costs could fall another 40-fold to ~$1,000/Gbps by 2028. Because 1Gbps can serve 200 customers at a capital cost of ~$1,000/Gbps, SpaceX could recoup its Starship investment with a one-time charge of $5 per customer. | ARK INVEST

🌡️ Climate

Last year was the hottest on record and, by most measures, the first to exceed the threshold set by the Paris Agreement to limit the worst effects of climate change, according to five international climate organizations. The average global temperature was 1.47 to 1.62 degrees Celsius (2.65 to 2.92 degrees Fahrenheit) hotter than pre-industrial levels. More than 190 countries, including the U.S., which signed the 2015 Paris Agreement, agreed to try to stay below 1.5 degrees Celsius. Exceeding the threshold increases the risk of rising sea levels, heat waves, floods and wildfires—like the California blazes that have killed at least 10 people and destroyed at least 9,000 homes across the Los Angeles area this week. | The Wall Street Journal ($)

Earth just finished up its hottest year in recorded history. The 1.5-degree threshold was never the difference between safety and ruin, between hope and despair. It was a number negotiated by governments trying to answer a big question: What’s the highest global temperature increase — and the associated level of dangers, whether heat waves or wildfires or melting glaciers — that our societies should strive to avoid? The result, as codified in the Paris Agreement, was that nations would aspire to hold warming to “well below” 2 degrees Celsius while “pursuing efforts” to limit it to 1.5 degrees. | The New York Times ($)

🚘 Car of the Week

Our Automotive Ventures "Car of the Week": a 1964 Ferrari 250 LM by Scaglietti. | RM Sotheby's

Have a great week,Steve Greenfield

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Notable & New

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Kinetic has launched Kinetic ID, an AI-powered tool for repair shops that instantly identifies when a vehicle’s advanced driver-assistance systems (ADAS) need to be calibrated following a collision. The tool is free for up to 3,000 VINs per year for collision repair shops, dealerships, and calibration service providers, who can sign up on the Kinetic ID website. | Fender Bender

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Remi Schmaltz and Brilliant Harvest was featured as one of 10 Calgary Startups to Watch for 2025. Calgary Tech

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This week Steve got to play ASOTU Onsite Correspondent at CES 2025 in Las Vegas! | ASOTU

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On this week's Automotive Ventures "Future of Automotive" segment on CBT News, we recap highlights from CES 2025. | CBT News

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Janique has launched the "Mobility Matters" newsletter. This week: 3 Technologies Powering Sustainable Mobility. | LINK

Companies to Watch

🌟 Flow Labs builds transportation technology that simplifies the complexity of managing traffic networks and gets people where they need to go as safely and efficiently as possible. | Flow Labs

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