Weekly Intel Report: Mobility News

BY AUTOMOTIVE VENTURES | SEP 11 2023 | VIEW ONLINE ➡️

What We're Reading:

The current four-year contract negotiated by the UAW on behalf of factory employees at the Detroit Three automakers expires on Sept. 14. The two sides seem far from agreeing on a new contract. (💲Link)Dampening demand for electric vehicles (EV) has led to a 10% drop in the price of batteries used for EVs and energy storage in August, with a further fall expected through the year. Prices for battery materials hit record highs during the pandemic as lower borrowing costs buoyed EV demand, but they have been falling since. (💲Link)A new study estimates that a volcanic crater on the Nevada-Oregon border, harbors a colossal 20 to 40 million metric tons of lithium, possibly the largest deposit in the world. (Link)Michael Dunne at ZoZo Go: “It’s a Chinese takeover,” came the text from an alarmed senior executive. He was standing amidst a vast collection of BYDs, MGs, NIOs and Polestars on the floor of the IAA show in Munich this week. Oliver Zipse, CEO at BMW, did not mince his words: “Chinese automakers pose an imminent risk to Europe’s auto industry.” (Link)The variable costs for producing electric vehicles will remain higher compared to combustion engine models for the foreseeable future. (Link)China's BYD is estimated to have a sustainable 25% cost advantage over other legacy automakers, allowing it to make better cars more affordably, even compared with gasoline-powered cars. (💲Link)Western automakers are set to lose a fifth of their global market share due to the unstoppable rise of more affordable, cheaper-to-produce Chinese electric vehicles. (💲Link)Volkswagen, BMW, Mercedes-Benz, and others have failed to make a dent in Tesla’s share of the growing market. And they are falling behind Chinese upstarts at the sharper edge of EV innovation, losing ground in the crucial Asian market. (💲Link)A prosperous future for the European automotive industry will depend on how well and quickly it responds to the Chinese threat and how European stakeholders can shape the necessary conditions for future success. The need for action is urgent. (Link)Overseas demand for inexpensive vehicles made in China, mostly gasoline-powered models that Chinese consumers now shun in favor of electric cars, is so great that the biggest obstacle to selling more abroad is a lack of specialized ships to carry them. (💲Link)Hilton is partnering with Tesla to install 20,000 universal electrical vehicle chargers at 2,000 of its hotels in the US, Canada and Mexico. (💲Link)Another domino falls. Honda has confirmed it’ll be the latest automaker to adopt Tesla’s charger standard, otherwise known as the North American Charging Standard (NACS). (Link)EVStation provides a handy Tesla NACS Charger Adoption Tracker to understand which of the automakers have adopted the Tesla standard. (Link)A new poll has found that 25% of recent car buyers purchased a vehicle service contract. (💲Link)Modern, connected cars are “the official worst category of products for privacy that we have ever reviewed,” Mozilla concluded in a new report that looked at how secure driver data is among two dozen brands. (Link)Elon Musk secretly ordered his engineers to turn off his company’s Starlink satellite communications network near the Crimean coast last year to disrupt a Ukrainian sneak attack on the Russian naval fleet. As Ukrainian submarine drones strapped with explosives approached the Russian fleet, they “lost connectivity and washed ashore harmlessly.” Musk’s decision, which left Ukrainian officials begging him to turn the satellites back on, was driven by an acute fear that Russia would respond to a Ukrainian attack on Crimea with nuclear weapons. (Link)Musk found Parag Agrawal, Twitter's CEO, to be likable. “He’s a really nice guy,” he says. But that was the problem. If you ask Musk what traits a CEO needs, he would not include being a really nice guy. One of his maxims is that managers should not aim to be liked. “What Twitter needs is a fire-breathing dragon,” he said after that meeting, “and Parag is not that.” (💲Link)Vietnam’s VinFast soared into the ranks of the world’s most valuable automakers — far surpassing rivals such as VW, Ford and GM. VinFast’s wild ride has shone a spotlight on its billionaire founder Pham Nhat Vuong, who was Vietnam’s richest man even before the listing and whose control of 99% of the company means he is now worth more than $60bn, on paper at least. (💲Link)Pham Nhat Vuong graduated from Russia's Moscow Geological Prospecting Institute in 1993. Sensing opportunity in the post-Soviet Union world, Vuong moved to Kharkiv, Ukraine, borrowed $10,000 from friends and family, and opened up a Vietnamese restaurant. While the restaurant floundered, he found near instant success in making and selling instant noodles, which were a new concept in Ukraine and proved to be incredibly popular from the start. By the time Vuong sold Technocom to Nestlé in 2010 for $150 million, the company had reached annual revenues of more than $100 million. (Link)California Gov. Gavin Newsom campaigned on shutting down Aliso Canyon, a gas storage facility that was the site of the largest methane leak in U.S. history. Now, five years later, his administration is poised to inject even more gas into the sandstone chamber 8,500 feet beneath north Los Angeles in a bid to stave off energy price spikes and power shortages. He’s also blessed extensions of gas and nuclear power plants that were scheduled to be closed. Keeping the lights on takes precedence over California’s clean energy goals, at least for now. (Link)Electricity outages stand to become more common as extreme weather events wreak havoc on the country's aging power infrastructure. The average U.S. electricity customer experienced 7.3 hours of power outages in 2021 — down from 8.2 hours in 2020, but more than double 2013's rate. (Link)Toyota arguably did more to improve fuel efficiency and cut emissions than any other established automaker by pioneering hybrid cars that augment a gasoline engine with a battery and an electric motor. But having staked so much on hybrids, it has moved slowly to cars that produce no tailpipe emissions. That has allowed Tesla and BYD, a Chinese automaker, to challenge Toyota’s dominance by offering appealing and affordable battery electric cars. Toyota has lost market share in the United States, and its sales in China have fallen. (💲Link)The seemingly perpetual truck driver shortage is not real, nor is it marketwide. (Link)Thousands of GM dealers frustrated by logistical bottlenecks slowing new-vehicle shipments from the factory to their lots have become do-it-yourself car haulers. GM is now paying dealerships up to $1,050 for each vehicle they pick up from four of its most important assembly plants. (💲Link)

In the past five years, EVs have gone from 2% of new-car sales in California to 22%. If California were itself a country, it would now rank fourth in terms of overall EV sales. (💲Link)At the state level, there is a glaring division between EV-friendly and EV-lagging states. In the bottom 10 states for EVs, the pace of adoption sunk 24% from a year earlier. In the top 10 states, pace of adoption grew 1%. (💲Link)The U.S. needs 20 times more EV charging stations than the 129,598 public and 14,673 private charging ports available in the U.S. today. (Link)A global shortage of technicians and independent repair shops qualified to fix EVs threatens to increase repair and warranty costs for drivers. (💲Link)BMW has made a U-turn on a controversial subscription service that saw drivers pay a fee to activate the heated seats already fitted to their car. (Link)Starting in January, consumers will be able to transfer EV tax credits of up to $7,500 to dealers at the point of sale so those funds can be applied to the down payment. (💲Link)A study by Automotive Ventures portfolio company Recurrent shows that Tesla battery longevity is not affected by frequent Supercharging. (Link)Waymo is using insurance data to make the case that its self-driving cars are safer than human drivers: driverless vehicles crash less often and damage less property than human-driven vehicles. (Link)It seems like Waymo cars get into serious crashes at a significantly lower rate than human-driven cars. Cruise’s safety record isn't quite as good. (Link)Hundreds of thousands of American drivers are affected by soaring car insurance rates, with some states seeing increases above 50% in the past year. (💲Link)The Pentagon intends to field a vast network of AI-powered technology, drones and autonomous systems within the next two years to counter threats from China and other adversaries. (💲Link)Delaware State Police have agreed to pay $50,000 to resolve a federal lawsuit filed by a man who said troopers violated his constitutional rights by preventing him from warning motorists about a speed trap. Jonathan Guessford, 54, said in the lawsuit that police unlawfully prevented him from engaging in peaceful protest by standing on the roadside and holding up a small cardboard sign reading "Radar Ahead!" (Link)Lufthansa Innovation Hub has published the latest "2023 New Air Travel Leaderboard" ranking New Air Travel startups by VC funding raised. (Link)Venture investors are writing checks to startups leveraging AI for a host of emerging supply-chain applications such as predictive analytics and industrial safety. The data-heavy nature of logistics makes it ripe for an AI remake, and the sector might serve as an early test case for how AI can reshape an industry. (💲Link)Investors are racing to find the clean-energy startups best positioned to capitalize on last year’s landmark climate law. Many are betting on an industry seen as crucial to the U.S. ending its reliance on China for batteries. (💲Link)Companies along the battery supply chain are investing billions of dollars in recycling capabilities as they confront projected shortages of the raw materials that will power the next generation of electric vehicles. (💲Link)Airliners can leave behind contrails, which represent about 35% of the aviation industry’s contribution to global warming. But with know-how from satellite observation, aided by machine learning, airlines can fly their aircraft to avoid creating contrails. (Link)

Great company valuation data from Carta if you're currently fundraising

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Have a great week,Steve Greenfield

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Notable & New

🎥 On this week's Future of Automotive segment on CBT News, I caught up with Christian Miller, the CEO of Dealer Trade Network. (💲Link)📢 Automotive Ventures portfolio company WarrCloud is hiring! (Link)