Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | June 10 2024 | VIEW ONLINE ➡️

Willow Springs International Raceway in California, one of the best-preserved race tracks hailing from the golden age of midcentury American motorsport, is for sale. | The Drive

What We're Reading

🚗 Automotive

Used cars are not just a better bargain, they retain designs and features more coveted than their high-tech replacements. A belief among consumers is that automakers’ latest new vehicles — whether powered by gasoline, batteries or a hybrid system — are inferior to the products they are replacing. Used-car intenders reserve special loathing for the touchscreen displays and capacitive switches that are now ubiquitous in new cars, regardless of price. The virtualization of once simple, reachable controls into phone-like menus has left many exasperated. | The Wall Street Journal ($)

Glenn Mercer points out that the complete restyling of a vehicle has the greatest impact on market share growth. To quote a paper (Non-price determinants of automotive demand: Restyling matters most, by Korenok, Millner, and Hoffer): "The positive impact of a restyling dominates the other demand determinants … A complete restyling on average has a ten times greater impact on market share growth rate than even a 10% reduction in relative price. Manufacturers would have to double relative advertising expenditures to achieve an effect comparable to a complete restyling." | Glenn MercerThe Biden administration tightened vehicle fuel mileage standards. The new mileage standards announced by the U.S. Department of Transportation require American automakers to increase fuel economy so that, across their product lines, their passenger cars would average 65 miles per gallon by 2031, up from 48.7 miles today. | The New York Times ($)Tesla CEO Elon Musk told NVIDIA to prioritize shipments of AI processors to his companies X and xAI over the electric vehicle maker. The news signals Musk is giving precedence to artificial intelligence-related development outside Tesla and comes ahead of a crucial shareholder vote on his pay package at the company. | Automotive News ($)Worth $46 billion at the latest share price, Elon Musk’s contested 2018 packet is disproportionate in every way. It is almost 300 times as much as what America’s best-paid CEO for 2023 earned ($162 million). It is also more than twice the annual free cash flows Tesla has generated in its entire existence, including expectations for this year ($22.5 billion). And, crucially for shareholders, who would pay for it through the dilution of their holdings, it is about 8% of the company’s market value ($557 billion). | Automotive News ($)

Megacasting is a form of die-casting, a process that involves jamming liquid metal (typically aluminum, in the automotive industry's case) into a mold under high pressure. However, the efficiencies realized in manufacturing have unintended consequences on repair costs. "Castings have very limited capacity to deform [in a collision]; they're going to fracture," says Sam Abuelsamid, Guidehouse Insights principal research analyst. "When that happens, [the casting] becomes irreparable." For cars with megacast structures, this means that even a relatively minor impact can have substantial implications. "Instead of replacing a small component, you're replacing an entire structure," Abuelsamid says. "So it's not that it can't be repaired, but that the cost is so high the vehicle will more often end up getting totaled." | Car and DriverA new study by Western University in Ontario says that if you've got a car with a modified exhaust system, odds are you're a male and probably also psychotic and sadistic. The study is titled, "A desire for a loud car with a modified muffler is predicted by being a man and higher scores on psychopathy and sadism." The study group comprised 529 undergrad business students who were asked whether they thought loud cars are cool, whether they viewed their cars as an extension of themselves, and if they'd modify their own cars to make the exhaust louder. Each participant took a Short Dark Tetrad personality survey to assess predilection toward general malice and belligerence—psychopathy, narcissism, manipulativeness. | Car and Driver

⚡️ Electric Vehicles (EVs)

General Motors CEO Mary Barra stood firm on the automaker's strategy to transition to electric vehicles even as some shareholders questioned market demand for the vehicles during GM's annual shareholder meeting Tuesday. Barra did say that, ultimately, the composition of GM's future vehicle lineup will be guided by customer demand. That appeared to be an easing of GM's previous stance that all of its new vehicles would be all-electric by 2035, but later in the day, a company spokesman said GM retains that goal. | Detroit Free PressElectric cars are more expensive than gasoline models largely because batteries cost so much. But new technology could turn those pricey devices into an asset, giving owners benefits like reduced utility bills, lower lease payments or free parking. Ford, GM, BMW and other automakers are exploring how electric-car batteries could be used to store excess renewable energy to help utilities deal with fluctuations in supply and demand for power. Automakers would make money by serving as intermediaries between car owners and power suppliers. Millions of cars could be thought of as a huge energy system that, for the first time, will be connected to another enormous energy system, the electrical grid. | The New York Times ($)Volvo Cars is launching the world's first EV battery passport recording the origins of raw materials, components, recycled content and carbon footprint for its flagship EX90 SUV, which is about to start production. The passport was developed by Volvo, which is owned by China's GEELY, in partnership with UK startup Circulor, which uses blockchain technology to map supply chains for companies, and took over five years to develop. Battery passports will be mandatory for electric vehicles (EVs) sold in the European Union from February 2027 showing the composition of batteries, including the origin of key materials, their carbon footprint and recycled content. | Reuters ($)The federal government committed billions of dollars to a program that would help states create a network of charging stations in 50-mile intervals along interstate highways. More than two years later, only eight stations are open. | Automotive News ($)Battery-electric is now the most popular powertrain for new city buses in the European Union (EU). | T&E

🇨🇳 China

A simmering trade war with China may hinder America's transition to electric vehicles. The U.S. auto industry relies heavily on Chinese batteries — more than half of American's lithium-ion battery imports originate in China. As the tariff on those batteries more than triples from today's rates of 7.5% to 25% this year, the increased prices risk "further slowing down the electrification process." Electric vehicles are already less affordable than their conventional gasoline-powered counterparts. The average transaction price of an EV was $55,252 in April, while the average for cars with internal combustion engines was $48,510. Any tariff-related EV price increase passed down to consumers would exacerbate that disparity. The prospect of such headwinds runs counter to broader federal efforts to accelerate an electrification transition. One part of that involves a fervent push to establish a domestic supply chain for batteries and their raw materials through passage of the Inflation Reduction Act in 2022. But it may take three to five years for mines and factories spawned by that legislation to begin production. | Automotive News ($)The number of Chinese EVs imported into Europe may not be significantly affected by new tariffs from the EU. That is because Chinese automakers have high margins built in to their European list prices. Chinese automakers have a 30% price advantage on EVs made in China. Even an increase in tariffs to 25% from the current 10% would still leave a “narrow” margin. | Automotive News ($)

📡 Connectivity

You know you have a credit score. Did you know that you might also have a driver score? The score reflects the safety of your driving habits — how often you slam on the brakes, speed, look at your phone or drive late at night. While you can see your credit score, you will have a harder time finding out what your driving score is. But auto insurance companies can get it — and that could affect the rate you pay. | The New York Times ($)

🤖 Autonomy & Robotics

The mining sector has been transformed by the integration of robots such as drones, autonomous haulage systems and remote-controlled equipment. Drones are used to survey mining locations and acquire data on aspects like topography and the distribution of mineral layers, while remote-controlled machines are increasingly being used for tasks such as drilling and blasting. | Mining Technology

🛴 Micromobility

The global Micromobility market is expected to reach $520 billion by 2035, according to McKinsey & Company. This is up $360 billion from today and and increase of $180 billion from McKinsey’s prediction for 2030. | Zag DailyThe Biden administration’s tariffs are aimed at Chinese-made goods, including e-bikes and batteries. But if we’re going to fight climate change, we need e-bikes more than ever. | The VergeGood luck finding any bicycle — and especially an e-bike — made in the U.S. It only took 30 years for the US to lose its entire bike manufacturing industry. China dominates global bike manufacturing, with imports accounting for 97% of bikes purchased in the U.S. China has captured 86.3% of the US bike market. And now tariffs threaten that market. | The Verge

🌡️ Climate

New York Governor Kathy Hochul halted a plan to charge motorists driving into Manhattan, upending an initiative years in the making that was finally set to kick in at the end of this month. The governor cited inflation and financial pressures on working-class New Yorkers as reasons to not implement congestion pricing, but the initiative was shaping up to be a political albatross ahead of this year’s congressional elections. | Bloomberg ($)Fascinating interactive site from Biocubes.net: Man-made structures now outweigh the total mass of the living world. | Biocubes

⚛️ Hydrogen

Not so long ago, hydrogen looked like the next big thing, offering a way to decarbonize great swaths of the economy and perhaps even heat homes. At one point, scenarios for low-carbon hydrogen saw demand rising from virtually nothing to as much as 800mn tonnes per annum (Mtpa) by 2050, or around 20% of the global net-zero energy mix. Fast forward 12 months, and the mood is increasingly despondent. Hydrogen’s ramp-up is much slower than expected, and 2030 targets now look woefully unattainable. | Financial Times ($)

⚓️ Marine

In the Safety and Shipping Review 2024 by marine insurer Allianz Commercial, Capt. Rahul Khanna, global head of marine risk consulting, explained that the maritime industry’s increased risk is changing at unprecedented speed. | Freight Waves

Superyachts are the ultimate status symbol for royal families, oligarchs and billionaires. The floating palaces are a source of fascination and secrecy — and greenhouse gas emissions. There are almost 6,000 superyachts — that is, vessels over 30 meters (100 feet) — at sea. The total has quadrupled in the past three decades. The planet-warming pollution caused by luxury vessels that benefit the very few has led lifestyle social scientist Gregory Salle to dub them a form of “ecocide” and “conspicuous seclusion” in his new book, Superyachts: Luxury, Tranquility and Ecocide. | Bloomberg ($)

🚘 Car of the Week

We have a new "Car of the Week": a 1960 Ferrari 250 GT SWB Berlinetta by Scaglietti. | RM Sotheby'sHave a great week,Steve Greenfield

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Notable & New

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On this week's "Future of Automotive" segment on CBT News, we explore whether hybrids will prove to be the right interim strategy for the legacy automakers, who are struggling to anticipate consumer appetite for EVs. | CBT News ($)

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We're going to have a lot of fun Monday in Los Angeles at the AutoTech Investments conference. | AutoTech Investments

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Scott Case from Automotive Ventures portfolio company Recurrent joined other industry leaders at the White House this week for a business roundtable on accelerating used EV adoption. | Recurrent

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Companies to Watch

🌟 South 8 Technologies develops, manufactures and licenses LiGas®, the liquefied gas electrolyte for advanced lithium-ion batteries that solves lithium-ion’s “fire and ice™” problems. | South 8 Technologies

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