Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | Jan 27 2025 | VIEW ONLINE

Automotive Ventures had over 40 early-stage (non-exhibiting) startups join our reception at the NADA convention in New Orleans. Thanks to all of the entrepreneurs who joined us. A new annual tradition!

What We're Reading:

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Automotive

The U.S. automotive industry is continuing a slow and steady march back to pre-pandemic market conditions, and that means dealer profits continuing to decline this year, said Thomas King, president of data and analytics for J.D. Power. King said overall retailer profits are expected to be $22 billion this year, down from $28 billion in 2024. However, the rate of decline is expected to be half as steep as what dealers experienced from 2023 to 2024. Still, overall profits remain well ahead of what they were before the coronavirus pandemic started. | Automotive News ($)

On the eve of the National Automobile Dealers Association (NADA) conference in New Orleans, Mark Hollmer and Jack Walsworth from Automotive News provide a delightful history of the franchise dealer in America. | Automotive News ($)

Hyundai’s partnership with Amazon has had a slow start but the automaker still is optimistic. Hyundai and its dealers are working with Amazon to sell cars entirely online. Since the partnership launched to the public Jan. 3, the program only has sold about 400 vehicles. The conversion rate is low, but Hyundai is learning a lot. Amazon first launched a pilot of the program using its employees and 18 Hyundai dealerships to test the platform. Midway through last year, the program expanded to include friends and family of Amazon employees. In December, Amazon announced it was opening sales of Hyundai vehicles to general consumers in 48 major metro cities. | Automotive News ($)A joint venture between U.S. electric pickup and SUV maker Rivian and Volkswagen Group is in talks with other automakers about supplying their software and electrical architecture. VW agreed in November to invest $5.8 billion in the joint venture, which will integrate advanced electrical infrastructure and Rivian’s software technology for both companies’ future electric vehicles. | Reuters ($)Several European and North American car factories are at risk of being closed or sold this year as automobile brands struggle with overcapacity and price competition, research and advisory firm Gartner said in a report on Thursday. Automakers will likely cut production capacity on the two continents in 2025 as they face emissions targets and tariffs, while China's electric vehicle (EV) dominance will increase due to its edge in software and electrification, the firm said. Closures or sales are more likely in high-cost countries, where political and societal pressure will be offset by mounting competition. | Reuters ($)

European automotive suppliers announced 54,000 job cuts in 2024 as investment in electric vehicle projects plummeted amid softening demand. Suppliers are fighting to counter the effects of a faltering economy, high inflation and the costly transition to EVs. At the same time, soaring energy and production costs are weakening demand and eating into the competitiveness of European components. European automotive suppliers are under pressure to recover fast or face continued job cuts. | Automotive News ($)

Buc-ee's, a 43-year-old Texas-based chain, is expanding rapidly across the US South, where its “world’s cleanest restrooms,” wall of beef jerky, soda fountains with more than 90 selections and bucktooth beaver dolls are much in demand. Sixty miles north of Atlanta, the line of cars leading into Buc-ee’s from Interstate 75’s two exit ramps sometimes stretches a mile long. And a future store near Gulfport, Mississippi, is projected to draw 5 million people a year, about the same visitor count as Yellowstone National Park, Buc-ee’s Ltd. told local officials. | Bloomberg ($)

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Electric Vehicles (EVs)

U.S. President Donald Trump took aim at electric vehicles, revoking a 2021 executive order signed by his predecessor Joe Biden that sought to ensure half of all new vehicles sold in the United States by 2030 were electric. Biden's 50% target, which was not legally binding, had won the support of U.S. and foreign automakers. Trump said in an executive order he was halting distribution of unspent government funds for vehicle charging stations from a $5 billion fund, called for ending a waiver for states to adopt zero-emission vehicle rules by 2035 and said his administration would consider ending EV tax credits. Trump plans to direct the US Environmental Protection Agency (EPA) to reconsider rules mandating more stringent emissions rules that would require automakers to sell between 30% to 56% EVs by 2032 in order to comply with federal emissions rules, as well as parallel rules issued by the U.S. Department of Transportation. Trump said in his order on Monday he was seek the repeal of a waiver granted to California in December by the EPA allowing the state to end the sale of gasoline-only vehicles by 2035. That rule has been adopted by 11 other states. | Reuters ($)

In a survey of over a thousand UK motorists in the past week, nearly 60% said that Elon Musk was putting them off buying a Tesla. The survey, by Electrifying.com, found that many respondents would rather buy an electric car from a Chinese brand than from Tesla. According to the poll, 59% of both electric car owners and those who said they intended to buy one agreed with the statement that Musk’s influence would deter them from choosing a Tesla. | The Times

The Volta Foundation has published its 2024 Battery Report, and it's full of useful information. | Volta Foundation

🇨🇳 China

BYD is now bigger than Ford, Honda or Nissan. BYD is now worth $105 billion, making them the third most valuable automaker in the world after Tesla and Toyota. How did BYD get so good so fast? | Dunne Insights

The European Union should encourage Chinese carmakers to open more plants in the bloc as part of a deal to drop punitive tariffs on imported Chinese electric vehicles, the boss of Mercedes-Benz AG has said. Ola Kaellenius, who is also president of EU car industry body European Automobile Manufacturers' Association (ACEA), said China had asked European carmakers to invest domestically to access its market decades ago, and that approach could form part of a solution to the trade dispute. | Financial Times ($)

“Made in China 2025," a plan introduced a decade ago, called for pouring money and resources into dozens of industries. The goal was to turn China into a green and innovative “manufacturing power”, one that relied less on labor and Western supply chains, and more on automation and new home-grown technologies. This was Xi Jinping’s vision for the Chinese economy. It has, for the most part, been a resounding success. Aided by the government, Chinese firms have risen to the very top of some industries. They have grown more automated and sophisticated. The torrent of goods coming from Chinese factories (and weak domestic demand) resulted in a record trade surplus of nearly $1trn in 2024. But China’s success has had consequences, ranging from economic distortions at home to a backlash abroad. | The Economist ($)A bruising price war in China is hampering revenue and profits at some automakers and delaying profitability at upstarts, even as the broader market rebounds from the pandemic and chip shortage and sets records for wholesale shipments. | Automotive News ($)

🤖 Autonomy & Robotics

Elon Musk’s The Boring Company is constructing a planned 68-mile tunnel system beneath Las Vegas where drivers will ferry passengers around the urban core in Teslas. Despite its size, the project, because it’s privately funded, has not gone through the vetting typical of public transit systems, including lengthy governmental studies. Musk says regulation often stymies innovation, a view that now has added significance given his new role advising President-elect Donald Trump on government efficiency. | ProPublica

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Aviation & Space

Skyports Infrastructure has reached a pivotal milestone with the UAE General Civil Aviation Authority (GCAA) granting design approval for the Dubai International Vertiport (DXV). This marks a major step forward for the UAE’s first air taxi station, setting the stage for commercial operations to begin in 2026. The DXV, located near Dubai International Airport, is the first of four planned vertiports in the city to receive GCAA design acceptance. The 3,100-square-metre facility, developed in partnership with Dubai’s Roads and Transport Authority (RTA) and Joby Aviation, is expected to handle 42,000 landings and serve 170,000 passengers annually. | ZAG Daily

Delta Airlines took the crown (again) in The Wall Street Journal’s 17th airline scorecard, standing out in nearly every category. | The Wall Street Journal ($)The jet stream is like a river of west-to-east winds in the upper atmosphere. Airplanes use it like a highway. If flights are heading eastbound across the Atlantic, they surf the jet stream, usually shaving an hour or more off their journeys. Westbound flights take longer, since planes are working against the jet stream. Air traffic controllers monitor the jet stream and tweak transatlantic routes accordingly each day. This time of year, it’s not uncommon for eastbound aircraft to exceed 800 mph. | The Washington Post ($)

📚 Investing

The PitchBook "VC Dealmaking Indicator" leverages deal-level data to quantify how startup-friendly, or investor-friendly the capital raising environment is. A higher indicator score reflects a more investor-friendly dealmaking environment, while a lower score points to a more startup-friendly one. | Pitchbook

🚘 Car of the Week

Our Automotive Ventures "Car of the Week": a 1966 Ferrari 275 GTB by Scaglietti. | RM Sotheby's

Have a great week,Steve Greenfield

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Steve caught up with Jim Fitzpatrick from CBT News to discuss NADA. | CBT News ($)

Steve presented "The Future of Automotive" at the Tekion Corp booth at NADA last week in New Orleans.

In The News

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Thanks for Nicolás Rivero from The Washington Post for the great article on the impact of cold weather on electric vehicle (EV) battery health, which cites Recurrent (multiple times). | The Washington Post ($)

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Joe Overby was kind enough to moderate a debate between Scott Case (from Recurrent) and Steve on EV adoption. Auto Remarketing

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Thanks to Riley Hodder from Automotive News for citing Automotive Ventures portfolio company Recurrent in this article on the impact of cold weather on electric vehicle (EV) battery health. | Automotive News ($)

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Thanks to Christine Book from Precision Farming Dealer for the recognition of Brilliant Harvest. | Precision Farming Dealer

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Great to see Andrea Amico, CEO of Privacy4Cars, quoted in this article from Molly Boigon at Automotive News on the recent Subaru data breach. | Automotive News ($)