Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | Jan 5 2026 | VIEW ONLINE

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What We're Reading:

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Automotive

For the longest time, Elon Musk has talked about the possibility that we’re living in a computer simulation. “I do have this theory about predicting the future, which is that the most interesting outcome is the most likely,” Musk said during a podcast appearance a few weeks ago. It is an idea rooted in the thinking that if our reality really is a simulation, we would get shut down if we were boring. “Another way to think of it is like we could be an alien Netflix series and that series is only going to get continued if our ratings are good,” Musk said. “If you apply Darwin to simulation theory then only the most interesting simulations will continue. Therefore, the most interesting outcome is most likely because it’s either that or annihilation. “So,” he added, “really, we have one goal: Keep it interesting.” His simulation argument is drawn from looking at the pace of development in our own modern lives: In the span of two generations, video games have advanced from simplistic graphics of “Pong” to photorealistic, 3-D simulations with millions of players competing simultaneously. To him, it just makes sense that a more advanced society has already gone down this path. “Given that we’re clearly on a trajectory to have games that are indistinguishable from reality…it would seem to follow that the odds we’re in based reality is one in billions,” Musk said at a 2016 tech conference. “So tell me what’s wrong with that argument.” More recently, as Musk reminisced on what has occurred in his own life, he has sounded even more certain. “If you were me,” Musk asked, “would you think this is real or a simulation?” | The Wall Street Journal ($)

Automakers are now free to make whatever they like, at least until the next sheriff arrives in Washington. "Choice" is the new mantra. Unsurprisingly, their choice is to make hay and haul it by building more high-margin SUVs and pickup trucks. The Trump administration and supporters have cast this as a win for affordability, as long as one ignores the potential fuel savings over the lifespan of more efficient ICE and electric models. "If it takes four years to develop and launch a vehicle, and it's then in market for five to 10 years, you've vastly outweighed the time period of one administration," says Mark Wakefield, global automotive market lead at AlixPartners. "We've had a few back-and-forths now, and that's tricky. The one good thing is that it's tricky for every automaker." | Car and Driver

Toyota's Lexus brand is having a record year in the US, with 2025 deliveries expected to grow about 5% to more than 360,000 vehicles. The breakout year for Lexus is largely a result of an expanded range of crossovers and SUVs, which now account for more than 80% of its volume. Lexus still faces challenges, including limits on Toyota's production capacity and the luxurification of mass-market brands, which could impact its sales volumes and high-end image. | Bloomberg ($)

Ford Motor Company ended a record-breaking recall year with 152 notices to consumers in 2025 concerning safety issues or product defects requiring repair. But executives say quality costs are improving. The Dearborn automaker nearly doubled the record previously set by General Motors of 77 recalls in 2014, according to the National Highway Traffic Safety Administration NHTSA's recall tracker. From faulty parking modules that create the potential for rollaways to risks of parts detaching from SUVs to notices that an electrical short may create conditions for a fire to spark, issues have run the gamut. And those cost the automaker time, money and reputation among consumers. Stellantis reported 53 recalls in 2025. GM was fourth in recalls with 27, according to NHTSA, behind RV manufacturer Forest River. | The Detroit News ($)

Tesla lost its crown as the world’s biggest electric-car maker in 2025 to China’s BYD after suffering its second consecutive year of declining vehicle sales. Elon Musk’s group delivered 1.64mn fully electric vehicles last year, a 9 percent fall from the 1.79mn it shipped in 2024, it said on Friday, in the wake of fierce competition and the cancellation of US tax credits for EV purchases. BYD this week said it had it sold 2.26mn pure EVs in 2025, up 28 percent from a year earlier following expansion in Europe and other overseas markets. The Chinese group had previously outsold Tesla on a quarterly basis but has now overtaken its US competitor for annual deliveries of fully electric models. While Tesla increased its sales every year between 2011 and 2023, Friday’s figures represent its second consecutive annual drop. | Financial Times ($)

Tesla is struggling with heightened competition, the loss of federal purchase incentives in its home market, and backlash to the polarizing politics of Chief Executive Officer Elon Musk. Fundamentally, the company is lacking a truly new, affordable vehicle to revitalize its aging lineup. Analysts have grown more skeptical about the outlook for sales in 2026. Nonetheless, investors remain buoyant, keeping Tesla’s market capitalization hovering around $1.5 trillion. The value they ascribe to the firm is increasingly rooted in Musk’s vision of a future filled with autonomous vehicles and a “robot army,” rather than the human-driven EVs in the here and now. | Bloomberg ($)

President Trump and his advisers have promised Americans that they will see bigger tax refunds next year, in part because of new tax breaks that were included in the bill. One of those — a deduction that the law calls “no tax on car loan interest” — is likely to be popular. But it may yield only marginal savings for consumers. The deduction has its origins in a campaign pledge that Mr. Trump made in October 2024 to stimulate the domestic auto industry and make cars more affordable. Mr. Trump’s domestic policy bill, which he signed in July, has enacted the deduction. But tax and auto experts are uncertain about whether the policy will be a boon to the auto industry or will deliver on affordability. | The New York Times ($)

More crashes are leading to total losses, and it’s not because people are driving worse. A new industry report suggests that increasingly complex vehicle tech and aging fleets are quietly reshaping what happens after impact. According to CCC Intelligent Solutions’ final Crash Course report for the year, the industry is facing a structural rise in total loss frequency, shaped by long-term changes in both vehicle design and consumer behavior. Nearly one in four cars that get into a crash ends up being declared a total loss, and the numbers are trending higher. That’s the main takeaway from the study conducted by CCC, which tracks collision repair and claims data across the industry. | CarScoops

Amid record-high rates of drivers shopping around for new policies, more policyholders are paying higher deductibles. When accidents happen, more drivers are personally paying for repairs instead of filing claims that could push up their premiums. A growing share of drivers have too little coverage - or none at all. There's even evidence that in extreme cases, more people are defrauding insurance companies to try to get cheaper coverage. Though auto-insurance prices are projected to level off in 2026, lower insurance-company profits may push more costs onto consumers. As more drivers on the road assume more risk, insurers may have to add that price into the cost of covering their own customers. It's a cycle where heightened risk and heightened prices can feed off each other. | Morningstar

The automotive industry is bracing for yet another potential crisis: a shortage of dynamic random access memory (DRAM) chips. This anticipated shortage will not be quite as dramatic as the 2021 crisis—which prevented more than 10 million cars from being built that year—but could potentially be more disruptive and long-lasting than the 2025 Nexperia incident. DRAM is found in the compute-heavy systems in cars, namely in cockpit and in ADAS/Autonomy systems. However, major DRAM manufacturers are increasingly reallocating their wafer capacity toward high-bandwidth memory (HBM) for AI data centers. The profitability and demand for HBM far exceed those of traditional automotive applications, leaving automakers increasingly vulnerable to an automotive supply chain crunch that could rival the previous shortages. | S&P Global

With Vehicle-to-Grid (V2G) programs, EV drivers hook their cars up to a special charger like this one that is designed to send energy back into the grid. The local electric utility itself must also be set up to do this. When deemed necessary, energy from a car will be transmitted into the grid to support area power, and drivers often get a credit for helping out—and they can opt out or unplug at any time. This is why these are often called "virtual power plants." It would be a sea change for power in the U.S. if every EV were to be V2G-enabled, and if every electric grid were set up to work with them in this way. Toyota Motor Corporation offered a startling statistic about the potential of this technology: "Currently, more than 4 million battery electric vehicles are on U.S. roads. If all were equipped with bidirectional charging, they could collectively contribute approximately 40,000 megawatts to the grid—a power output similar to that of 40 nuclear power reactors," the automaker said. | Inside EVs

In a different world, an electric vehicle would be just another car. But in today’s hyperpartisan climate, battery-powered cars carry not just passengers but a punishing load of political and cultural baggage. Supporters may view electric cars as heroes, helping halt climate change or making American automakers more competitive around the world. But others see in them the heavy hand of government, pressuring consumers to ditch gasoline whether they are ready to or not. Throw in Elon Musk and his highly charged social media commentary, and even loyalists of his car company, Tesla, may no longer know whom or what to believe in. 25 years ago, Toyota used marketing that implied that buying a Prius was a way to save the planet. That excited liberals, but drew a strong backlash from people less attuned to environmental issues. Nissan made a similar choice with the Leaf, its electric vehicle, in 2010, he said. In one Nissan TV ad, a polar bear hugged a Leaf owner. | The New York Times ($)

Consumer Reports’ annual reliability survey has found that hybrid vehicles have fewer problems than gas-only cars. Electric cars and plug-in hybrid vehicles (PHEVs), meanwhile, tend to have more issues. CR’s latest reliability ratings are based on survey responses from the owners of about 380,000 vehicles from the 2000 through 2025 model years, and a few early 2026 models. | Consumer Reports

Motorists are three times more likely to die in hybrid cars than petrol cars, analysis suggests. Department for Transport (DfT), United Kingdom figures show that 122 people died in collisions involving hybrid vehicles and 777 in petrol car crashes last year. It means hybrids were three times more likely to be involved in fatal crashes because petrol vehicles outnumber them by more than 20 to one. Experts said hybrids were “more complex” than petrol or diesel-fuelled cars. Nicholas Lyes, of IAM RoadSmart, a road safety charity, said: “Plug-in hybrids are often heavier and more complex vehicles owing to the fact they run on both a traditional combustion engine and a battery.” Last year, the Swedish Civil Contingencies Agency found that hybrid vehicles faced the highest fire risk, with 3,475 conflagrations per 100,000 vehicles. This was compared with 1,530 fires per 100,000 for petrol or diesel cars and 25 per 100,000 for electric vehicles. | The Telegraph ($)

This year has been a rocky one for those hoping to untether the U.S. transportation system from its reliance on the automobile. Sean Duffy, President Donald Trump’s choice to lead the U.S. Department of Transportation, has yanked funding for street improvements deemed “hostile” to cars, questioned the value of bike lanes and mounted an attack on “political messages or artwork” painted on crosswalks that researchers suggest are harmless. Public transportation has been a particular focus of Duffy’s ire. Already vulnerable due to escalating costs and a post-Covid dip in ridership, transit agencies have also had to deal with the USDOT secretary’s dubious claims about endangered riders and threats about pulling financial support. And yet, to channel Mark Twain, reports of transit’s death are greatly exaggerated. | Bloomberg ($)

When President Trump began raising tariffs earlier this year, government officials and economists feared Mexico’s export-led economy would take a devastating hit. Instead, Mexican exports to the U.S. have grown. Because Mexico’s ultimate tariff rate ended up lower than for most other countries, the disparity has helped Mexican exports fill some of the gap left by Chinese products subject to higher levies. Producers seeking a foothold in the U.S. have said that Mexico still has all the inherent advantages it had before tariffs—proximity to the U.S., a low-cost manufacturing industry and a frayed but intact free-trade agreement. Even with steep tariffs on autos, steel and aluminum bound for America, Mexican manufacturing exports to the U.S. rose almost 9% from January to November, compared with the first 11 months of 2024, according to Mexican government data. Auto-industry exports to the U.S. fell close to 6% during the period, but exports of other manufactured goods surged 17%. Trade in goods between the U.S. and Mexico was on track to reach a record of nearly $900 billion for 2025. | The Wall Street Journal ($)

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China

As early as the 1950s, Chinese leaders discussed competition in the world’s literal and figurative frontiers: the deep seas, the poles, outer space, and what the former People’s Liberation Army officer Xu Guangyu described as “power spheres and ideology,” concepts that today include cyberspace and the international financial system. These domains form the strategic foundations of global power. Control over them determines access to critical resources, the future of the Internet, the many benefits that derive from printing the world’s reserve currency, and the ability to defend against an array of security threats. As most analysts focus on the symptoms of competition—tariffs, semiconductor supply chain cutoffs, and short-term technological races—Beijing is building capabilities and influence in the underlying systems that will define the decades ahead. Doing so is central to President Xi Jinping’s dream of reclaiming China’s centrality on the global stage. “We can play a major role in the construction of the playgrounds even at the beginning, so that we can make rules for new games,” Xi said in 2014. Beijing has positioned itself well for this contest. It approaches these frontiers with a consistent logic and playbook. It is investing in the necessary hard capabilities. It is partnering with other countries to embed itself in institutions and flooding these bodies with Chinese experts and officials, who then campaign for change. When it cannot co-opt existing institutions, it builds new ones. In all these efforts, Beijing is highly adaptive, experimenting with different platforms, reframing positions, and deploying capabilities in new ways. | Foreign Affairs ($)

BYD met its full-year sales target and likely surpassed Tesla to become the world’s largest electric-vehicle maker in 2025. The company delivered 4.6 million vehicles last year, up 7.7% from 2024, with surging overseas sales exceeding the high-end estimate of 1 million sales. BYD faces growing pressure in the coming year as China scales back some incentives supporting EV purchases and domestic competition becomes fiercer, but analysts are confident that the company can weather the challenges. | Bloomberg ($)

China’s electric car boom is ending in 2025 on a soft note, with sales dipping and analysts warning that a fierce price war is likely to persist. Market concentration has increased sharply. The top ten manufacturers now account for around 95% of the Chinese new energy vehicle market — up sharply from around 60% to 70% just two or three years ago, according to Xiao Feng, co-head of China Industrial Research at Citic CLSA. New energy vehicles include battery-electric and hybrid-powered cars. Paul Gong, head of China autos research at UBS, expects the price war to keep going “for years,” while domestic policy changes will likely weigh on growth next year. Slowing demand at home is pushing Chinese electric carmakers to expand aggressively overseas, where profit margins are often higher. | CNBC

In the past decade, China has seen an EV boom, thanks in part to government support. Buying an electric car has gone from a novel decision to a routine one; by late 2025, nearly 60% of new cars sold were electric or plug-in hybrids. But as the batteries in China’s first wave of EVs reach the end of their useful life, early owners are starting to retire their cars, and the country is now under pressure to figure out what to do with those aging components. The issue is putting strain on China’s still-developing battery recycling industry and has given rise to a gray market that often cuts corners on safety and environmental standards. National regulators and commercial players are also stepping in, building out formal recycling networks and take-back programs, but so far these efforts have struggled to keep pace with the flood of batteries coming off the road. | MIT Technology Review ($)

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Autonomy, Robotics & AI

Can Waymo justify a $100 billion valuation? That’s a question investors will answer as Alphabet Inc.’s autonomous ride-hailing company discusses raising funding at a valuation that amounts to 280 times its annualized revenue—many times higher than other ride-hailing companies. Waymo’s rapid expansion in recent months—despite some hiccups such as a service suspension during a San Francisco blackout—suggests it can grow into that valuation. Revenue should rise as it adds riders and new services in cities, either by taking market share from Uber and Lyft or by unlocking entirely new demand. So far this year, the Google-controlled company has completed over 14 million paid trips without a driver behind the wheel, three times more than in 2024. Annualized revenue from offering paid rides in five cities has topped $350 million. The company plans to make its robotaxi service available to the public in at least five more cities in 2026. By 2030, annualized revenue could hit at least $2.5 billion, according to Morgan Stanley analysts’ most recent projection, made in January. At $2.5 billion in annualized sales, the business’ expected valuation would drop to 40 times revenue. Still, Uber and Lyft, in contrast, have revenue multiples of less than three times. While they’re likely both growing significantly more slowly than Waymo, they are both projected to report revenue growth in the mid teens for 2025—and both are profitable. | The Information ($)

The future of Tesla is an army of humanoid robots that Elon Musk says could eliminate poverty and the need for work. He has told investors the robots could generate “infinite” revenue for Tesla and have potential to be “the biggest product of all time.” Musk has bet the company and his personal fortune on this vision of the world in which Optimus, as it is known, works in factories, handles domestic chores, performs surgeries and travels to Mars to help humans colonize the planet. Though today each robot is made by hand, Musk has proposed manufacturing millions of robots a year. Musk is motivated to prove the skeptics wrong. His new compensation package gives him 10 years to make Tesla a $8.5 trillion company and sell at least one million bots to customers, among other product and financial goals. Success could mean earning Musk a $1 trillion pay package, and expanding Tesla far beyond the electric vehicle industry where it made its mark. “The car is to Tesla what the book was to Amazon,” Adam Jonas, an analyst with Morgan Stanley, said this summer. “Tesla used cars as a laboratory to get good at other things.” | The Wall Street Journal ($)

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Investing

Peter Walker at Carta has published their "State of Startups 2025," which is packed with valuable information for both startups and VCs. | Carta

🚘 Car of the Week

Our Automotive Ventures "Car of the Week": a 1988 Porsche 959 SC Reimagined by Canepa. | Broad Arrow

Have a great week,Steve Greenfield

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📰 In The News

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Steve caught up with Paul and Kyle at More Than Cars to discuss the outlook for the auto industry in 2026. | More Than Cars

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Steve kicked off the New Year with some of his favorite people in the industry. | All Things Used Cars+

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On this week's "Future of Automotive" segment on CBT News, we discuss how artificial intelligence (AI) is reshaping how people navigate the web. Instead of typing questions into search engines, users are increasingly asking chatbots—tools like ChatGPT—to give them direct answers. Not a list of links, not a collection of sources… just the answer. And that has huge implications. | CBT News ($)

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