Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | MAR 11 2024 | VIEW ONLINE ➡️

What We're Reading

New vehicles are more available this spring, and manufacturers have even begun offering deals to entice buyers. But at the same time, lenders have been tightening the terms of car loans as they deal with a rising number of delinquencies. That has made it harder for some people to get affordable loans. | The New York Times ($)

On average, drivers spend 20% of their monthly income on car-related expenses, such as repairs, maintenance, insurance premiums and auto-loan payments, and nearly 2 in 5 drivers can’t afford necessary repairs and upgrades for their cars. | Repairer Driven News

New cars and trucks are packed with sensors and technology that protect and pamper drivers and passengers. But those features are also raising the cost of repairs after accidents. The average cost of making damaged cars good as new has soared 36% since 2018, and may top $5,000 by the end of this year. That big increase is the main reason that insurance premiums have been soaring — up 17% in the 12 months through May. | The New York Times ($)

Overall, Tesla insurance saw a year-on-year increase in premiums of 115% and with a fronting arrangement with State National Companies (SNC), it has become the specialty insurer’s largest producer. | Insurance Business

The auto industry is shrinking in mature markets like North America, Western Europe and Japan: vehicle sales in those markets are lower than they were 10 years ago. And the revenue of six of the largest legacy OEMs, when adjusted for inflation, has barely budged at all, or has even shrunk. This likely will set the stage for a price and market-share war the likes of which the industry has never seen. | Wards Auto

Last year, Americans bought more than one million fully electric cars, trucks and SUVs, a record and a milestone for the country’s transition away from gas-powered vehicles. Electric vehicles grew to 8.5% of new auto registrations nationwide. Hybrids, which are gaining popularity among those who still want gas as a backup, accounted for an additional 10%. But enthusiasm for plugging in hasn’t spread equally across the country. | The New York Times ($)More than 90% of drivers worldwide report feeling “anxious” about finding somewhere to charge away from home. Other key findings of the survey: 44% of BEV drivers have reported that they have run out of charge and 22% found themselves stranded multiple times. | Wards Auto

Although they make up less than 2% of the market, PHEVs have gained prominence as one of the auto industry's paths to reducing carbon emissions. Some drivers see PHEVs as a way to reduce their carbon footprint without fully giving up the freedom of a gasoline vehicle. Others see them as a stepping stone to a fully electric vehicle. | Automotive News ($)Battery electric vehicles will be, on average, cheaper to produce than a comparable internal combustion engine by 2027 thanks to new manufacturing methods that are lowering production costs, according to market research firm Gartner, who expects production costs to drop considerably faster than the costs of batteries, which are the most expensive part of an EV and account for around 40% of the vehicle's price. | Reuters ($)BMW sold 376,000 electric vehicles last year, including some under its Mini brand, a 75% increase from the previous year. In the luxury segment, BMW was second only to Tesla, which remained dominant with 1.8 million cars. Electric vehicles accounted for 15% of BMW sales in 2023, up from 9% the previous year. The company’s growth comes as sales of electric vehicles have risen at a slower pace overall around the world. What is even more surprising is that BMW, unlike GM or Ford, made a profit on the electric vehicles it sold. | The New York Times ($)

Doubt that building an OEM is capital intensive? Here's a view of the free cash flow history of the pure EV automakers. | @alojohThe EV slowdown isn’t disastrous for legacy automakers, but if you’re a cash-guzzling EV startup that needs new capital and investors to reach scale, it’s a major roadblock. | Chartr

Vast swaths of the U.S. are at risk of running short of power as electricity-hungry data centers and clean-technology factories proliferate around the country, leaving utilities and regulators grasping for credible plans to expand the nation’s creaking power grid. The soaring demand is touching off a scramble to try to squeeze more juice out of an aging power grid while pushing commercial customers to go to extraordinary lengths to lock down energy sources, such as building their own power plants. | The Washington Post ($)New York City operators of commercial electric vehicle charging equipment can now enroll in a new managed charging program Con Edison is offering to reduce grid stress at times of peak demand in exchange for financial incentives. The SmartCharge Commercial program offers financial rewards for charging overnight and avoiding charging when local power demand is high. | Smart Cities DiveAutomakers in Europe are being encouraged to stop using touchscreens for basic functions like turn signals and wipers in an attempt to promote safer driving. The European New Car Assessment Program (NCAP) is set to introduce new rules in January 2026 that require the vehicles it assesses to have physical controls to receive a full five-star safety rating. | The VergeMechanical devices that can hide a driver’s tag at the push of a button are sold online for a couple of hundred bucks. Other drivers are getting creative on the cheap, jury-rigging their plates with face masks or duct tape. This type of toll evasion has cost government agencies millions, prompting officials to push crackdowns like increasing fines. | The Wall Street Journal ($)Chinese automakers are around 30% quicker in development than legacy manufacturers, largely because they have upended global practices built around decades of making complex combustion-engine cars. They work on many stages of development at once. They are willing to substitute traditional suppliers for smaller, faster ones. They run more virtual tests instead of time-consuming mechanical ones. And they are redefining when a car is ready to sell on the market. China’s prowess, combined with its global ambitions, is also stoking fears it could flood the world with cheap cars as demand for EVs slows. | Automotive News ($)Republican U.S. Senator Marco Rubio proposed sharply boosting tariffs on Chinese vehicle imports by $20,000 to stop the country "from flooding U.S. auto markets," in an attempt to "safeguard American automakers and workers against the influx of artificially cheap vehicles from China." | Reuters ($)A number of Republican-led states are charging higher fees and taxes for electric vehicle owners to make up for lost gasoline-tax revenue that helps fund roads and highways, prompting pushback from EV industry groups and drivers who say they are being squeezed more than owners of gas-guzzling cars. The debate goes to the heart of one of the thorniest transportation challenges the country faces: how to pay for highway construction and maintenance when the traditional funding mechanism for such work is slowly collapsing. | The Wall Street Journal ($)

BYD added fuel to the flames of a brutal price war in China by cutting the price of its cheapest car, the Seagull, by 5%. Sticker tags for the Seagull, a compact car, will now start at 69,800 yuan ($9,700). BYD has become a relentless discounter in the price war Tesla began in the world's largest auto market last year. | Automotive News ($)Fraud adds up to more than $300 billion per year for the U.S. insurance industry, a cost borne in part by consumers. Hard economic times and the challenges of the past few years may tempt individuals to commit fraud. While claims fraud is most prevalent, auto insurance application fraud is also on the rise. Personal auto insurance application fraud has increased 18% since 2019. | Verisk

Gaza has become Israel's testing ground for military robots: Israel's increased use of robots in Gaza allows initial surveillance without jeopardizing the lives of soldiers and dogs. | HAARETZThe end of Jaguar's internal combustion engine age is just weeks away. But the first of a new generation of high-performance Jaguar electric vehicles is not expected to land at U.S. dealers until sometime in 2025. So JLR is planning a tightly managed transition from the current lineup to the new one that aims to keep Jaguar dealers from running out of new vehicles. | Automotive News ($)Fewer vehicle lease maturities are expected in the second half of 2024 as the industry reaches the three-year anniversary of the inventory crisis. | Automotive News ($)The Florida Porsche dealership that bought an early Tesla Cybertruck at an online auction listed the stainless-steel pickup for $289,999, a markup of nearly $46,000 from its winning bid last week. | Automotive News ($)

A recent study aimed to determine the number of essential trips made within a 15-minute walk from home: the researchers found that only 14% of these trips happened locally. | Naturee-bike incentives have recently exploded in popularity. More than 100 cities, counties and states have proposed or created programs to encourage residents to purchase battery-powered bikes, and Congress has considered enacting one at the federal level. | Bloomberg ($)A recent study sheds light on the effectiveness of cycling infrastructure in reshaping public opinion and promoting active transportation. According to the findings, the installation of cycle lanes and similar initiatives tends to increase public acceptance once they are implemented. | Momentum Mag

Using data from Twitter (now X), this study, published in Scientific Reports, deploys artificial intelligence (AI) and network analysis to map and profile climate change denialism across the United States. They estimate that 14.8% of Americans do not believe in climate change. Political affiliation has the strongest correlation, followed by level of education, COVID-19 vaccination rates, carbon intensity of the regional economy, and income. | Scientific ReportsThe Suez Canal’s problems are geopolitical and those of the Panama Canal are climate-based, but both are roiling global trade. Cargo volumes through the Suez and Panama canals have plunged by more than a third. Hundreds of vessels have diverted to longer routes, resulting in delivery delays, higher transportation costs and economic wreckage for local communities. Ship operators are bracing for months of uncertainty in the waterways where some 18% of global trade volumes crossed last year. | The Wall Street Journal ($)Omri Amirav-Drory at NFX provides a very valuable primer on venture capital and how investors think. A must-read if you're a startup looking to raise money. | NFX

We have a new "Car of the Week": a 2017 Lamborghini Centenario LP770-4 Coupé. | RM Sotheby's

Have a great week,Steve Greenfield

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Notable & New

🎥 On this week's "Future of Automotive" segment on CBT News, we explore John McElroy's recent article, arguing that the competitive intensity that we’re witnessing at the automaker level is going to get worse. | CBT News ($)

📢 Nice to see Privacy4Cars quoted in Auto Remarketing. | Auto Remarketing

📢 Great to hear from Alex Yurchenko and Eric Lyman from Black Book on their partnership with Automotive Ventures portfolio company Recurrent. | Automotive News ($)

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