BY AUTOMOTIVE VENTURES | 13 MARCH 2023 | VIEW ONLINE ➡️

Electric vehicles could soon be cheaper than conventional internal combustion equivalents. (Link)Average lead times for microchips (including many chips crucial in car manufacturing), which measure how long it takes to fulfill orders, have fallen for seven months straight, although the industry average lead time is still nearly six months. (Link)Dramatically higher vehicle prices over the last four years, higher financing costs, longer loan terms, and used vehicle values that have declined from record highs equals increased negative equity and the real potential of rapidly slowing sales as consumers become forced to hold their vehicles longer. An increasing number of consumers are showing up at dealerships carrying boatloads of negative equity and rolling it into longer and longer-term loans. (Link)Traditionally, automakers didn't install anything on a vehicle that they couldn't charge for. When you build hundreds of thousands of vehicles each year, every extra nickel or dime in parts matters. But in the electric vehicle/infotainment/subscription era, that strategy is changing. With the average age of vehicles at a record high (12-plus years), average transaction prices increasing and loans stretching to eight years and longer, automakers are thinking about how vehicles can generate revenue long after they leave a showroom. (Link)When the US recreational vehicle industry has slumped in the past, it has often been a sign that a recession is on its way. Late last month, the RV Industry Association reported that manufacturers’ shipments to dealers were down 61.8% in January compared with those in the month a year earlier. But is that a sign that a recession is coming, or just that Americans have enough motor homes and trailers for now? (Link)British car manufacturer Jaguar is set to drastically cut its dealer network in the UK from more than 80 today to less than 20 in just two years. The car manufacturer has told its dealer partners that it doesn’t need a large number of the sites anymore as it transitions to an all-electric future. (Link)Jaguar and Land Rover dealers in Europe are threatening to take the automaker to court over the automaker's new contracts that dealers say substantially reduce their margins after they have invested millions in their dealerships in recent years at the automaker's request. Jaguar Land Rover has terminated contracts with its European dealers and offered new terms, introducing the new dealer contracts as early as April 1st. In Germany, JLR's new contract will halve dealer margins to a maximum of 9%. JLR also wants to curtail the influence of the dealer association in the new contracts. (Link)Earnings results over the past few weeks for young EV makers like Rivian and Lucid illustrate the urgency of their predicament. While these companies are now producing vehicles, losses continue to mount as they have struggled to spool up assembly lines and boost sales as planned, whittling down their financial cushions and increasing the likelihood of needing to raise more money. (Link)If the battery in an EV demands so much mining and manufacturing, are they really so much cleaner than gas-fueled internal combustion engines? While mining the material inputs required for an EV battery — and the process of making it — emits more carbon dioxide, the direct emissions from driving an internal combustion engine vehicle over its lifetime far outstrip the total lifecycle emissions of an EV. (Link)Iran says it’s discovered a massive deposit of lithium: 8.5 million tons. If the claimed figure is accurate, that would make the deposit the second-largest known lithium reserve in the world after Chile, which holds 9.2 million metric tons of the metal. (Link)PitchBook's "VC Dealmaking Indicator" measures how startup-friendly, or investor-friendly the capital raising environment is. We saw a race to startup friendliness after midyear 2020. This trend has sharply reversed starting in 2022, largely driven by the expected demand for capital from startups seeking additional funding after having raised large rounds over the prior two years. (Link)Following a decades-long decline, manual transmissions are experiencing a modest but real resurgence. (Link)​Have a great week,Steve Greenfield

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🗞️ On this week's Future of Automotive segment on CBT News we discuss how automakers are configuring new vehicles for future monetization. (Link)🗞️ Andrea Amico, founder and CEO of Privacy4Cars (an Automotive Ventures portfolio company) is featured in Automotive News discussing white hat hackers. (Link)🎤 Thanks to IAA for having me out to speak and moderate a panel at this past week's 2023 Industry Leadership Summit. Thanks to our panelists: Bill Brower, Bob Cretel, and Joe Rector. (Link)🎤 Thanks to the iA American Warranty Group for having me as their closing keynote speaker at this past week's Agent Conference in Fort Lauderdale, FL. (Link)

🌟 Streamline Auto Solutions aligns dealer inventory with lending criteria to maximize customer selection and lender programs and helps manage consumer expectations throughout the entire sales process. (More here)🌟 Repurpose Energy is focused on reusing EV batteries to create reliable, low-cost “second life” energy storage systems. (More here)

🚗Dealer Tech & Auto Commerce

Australian online auto classifieds firm carsales.com.au will launch an AUS$500 million (USD$329 million) equity raising to fund a deal to acquire an additional 40% stake in Brazil-based automotive digital marketplace Webmotors. The acquisition price for the stake increase will be about AUS$353 million and will make Carsales a 70% owner of Webmotors. 

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🛠️Aftermarket & Repair

GoMechanic.in, the India-based car repair startup, is being acquired by CarTrade.com. While the details of the deal are unclear, GoMechanic seems to have been valued at a little over $30 million (around Rs 245 crore). The startup was last valued at $285 million, in a June 2021 funding round. 

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🦾 Autonomy, Robotics & AI:

Ghost Autonomy, the Silicon Valley-based automated driving startup, raised about $45.3 million, according to a regulatory filing. (Link to article)John Deere has acquired SparkAI, a startup that develops human-in-the-loop technology to help robots resolve edge cases in real-time. The financial terms of the deal were not disclosed. (Link to article)

⚡Electrification & Alternative Fuels

ClearFlame Engine Technologies raised $30 million in Series B funding to bring to market innovative solutions that power heavy-duty engines with clean, renewable fuels and create a viable business solution to reduce carbon and soot. The latest investments were led by Mercuria Energy Group, with Breakthrough Energy Ventures making a second investment. New investors include Rio Tinto and WIND Ventures. (Link to article)Inbalance grid, which develops smart electric vehicle charging solutions and manages a charging network, has raised €1.3 million, co-led by the IISUTIB KŪB Business Angels Fund II, EIT, and the Civinity Group. (Link to article)itselectric, an electric vehicle curbside charging company, closed a $2.2M pre-seed round to provide curbside EV charging specifically built for cities. The raise was led by Brooklyn Bridge Ventures with participation from The Helm, XFactor Ventures, Graham & Walker, Clean Energy Venture Group, and Pericles Ventures among others. (Link to article)Generac Power Systems (NYSE: GNRC) announced a strategic minority investment in Rolling Energy Resources, a provider of electric vehicle load management software used by utilities and electric vehicle owners to monitor, control and optimize charging. (Link to article)Volta Trucks, the electric truck maker, is in advanced discussions to raise as much as 250 million euros ($263.58 million), in what it hopes will be its last equity raise before an initial public offering (IPO) as soon as next year. (Link to article)ZeroNox, a provider of sustainable, off-highway vehicle electrification, will go public through a transaction with Growth for Good - The Sustainability SPAC (NASDAQ: GFGD). Upon closing, ZeroNox’s common stock is expected to trade on the NASDAQ under the ticker symbol “ZNOX”. (Link to article)💵

 Finance & Insurance

Click-Ins, an Israel-based AI SaaS company that enables the insurance and automotive industry to accurately detect and assess all damages on a vehicle, raised a $7.5 million funding round. Investors in the round included SHLOMO GROUP, Mobilion Ventures, Adar, the American Scharf Group, Summus Venture Capital, and UMI Israel. (Link to article)🛴 Micromobility

Micromobility startup Cowboy is in the process of closing a €15M round (USD $15.8). This recent funding round is a down round: The company’s total valuation is down by 44% compared to the previous funding round. (Link to article)

🚛Supply Chain & Logistics

Qaptis has successfully closed a CHF 1.3M ($1.4m USD) pre-seed round with participation from Cargill, BlackWood, and YB Startup. The company's CO2 capture device, retrofitted on heavy vehicles, aims to decarbonize freight transport and supply chains. (Link to article)Uber is exploring whether to spin off its Uber Freight logistics unit in a sale or as a separate publicly traded firm, indicating that an initial public offering is a more likely outcome. (Link to article)

🔐 Vehicle Connectivity & Cyber SecurityCybersecurity company Angoka has acquired R4dar Tech to extend its reach in the ground and air transport sectors. UK-based R4dar Tech has created a geospatial awareness device that helps drones navigate and land safely without relying on communication networks or a GPS location. (Link to article)

🏭Vehicle Production & Assembly

Hyundai MOBIS, the parts and service affiliate of South Korean automaker Hyundai Motor Group, led a $50 million Series C funding round valuing the United Kingdom's Envisics at $500 million. Envisics develops augmented reality head-up displays or AR HUD, an advanced display technology that some automakers are planning to install in new models in the coming years. (Link to article)

🏎️ Early-stage AutoTech or Mobility founder? We'd love to hear from you.🏁 Interested in investing directly into early-stage AutoTech and Mobility companies? Check out The Automotive Ventures Investment Club (AVIC)📈 Are you an auto dealer interested in investing in early-stage AutoTech? Learn more about the DealerFund here.✨ Looking for our Dealership AutoTech Company Landscape? View that here.✨ Looking for our Mobility Tech Company Landscape? View that here.🚀 Interested in exploring Automotive Ventures' portfolio companies shown below? Check them out here.