Weekly Intel Report: Mobility News

BY AUTOMOTIVE VENTURES | SEP 25 2023 | VIEW ONLINE ➡️

What We're Reading:

Right now, the Detroit Three automakers incur about $64 per hour per worker, including all wages and benefits. The UAW’s suite of compensation-related demands would roughly double that total hourly labor bill to about $130. Now consider these firms’ competitors: foreign automakers operating in the United States (Toyota, Hyundai, etc.) pay their workers about $55 per hour all in. Tesla is estimated to pay workers somewhere in the mid-$40s. (💲Link)

Thanks to Glenn Mercer for providing one chart that provides clarification for some of the numbers being thrown around about the current UAW strike. (Link)Steven Rattner, who negotiated concessions with the UAW to help keep GM and Chrysler afloat in 2009, says union workers deserve significant raises but can't make the automakers uncompetitive. "The union has to be careful that they don't kill the goose that lays the golden egg, so to speak, by asking for too much." (💲Link)The UAW and Detroit 3 automakers are exchanging proposals over wages and benefits as the 2 sides look to reach tentative agreements on new contracts. Automotive News provides a handy reference table with the latest information available on what’s in those offers. (💲Link)Since 2009, manufacturing output per hour in the U.S. has grown just 0.2% a year, well below the economy as a whole and peer economies in Europe and Asia, except Japan. In motor vehicle manufacturing, the picture is especially bad: From 2012 through last year, productivity plummeted 32%. (💲Link)The average annual cost of new vehicle ownership is up more than 13% from last year to more than $12,000, or just over $1,000 a month. Higher car prices and the surging costs of financing, insuring, and maintaining a new car all contributed to the increase. The analysis also considered depreciation a cost even though it’s not paid out of pocket. (💲Link)Electric vehicles are growing in popularity and market share. And as their numbers on the road grow, so does the cost and length of time it takes for collision shops to put these vehicles back together. (💲Link)Recurrent reports that the average Range Score for Teslas owned and operated in cold and marine climate zones are higher than those for Teslas owned and operated in hot climate zones. (Link)Fully electric models made up 21% of sales in the EU in August, the first time that they have made up more than one-fifth of all sales. (💲Link)Even as the nation’s EV market appears to be teetering on the edge of an electric takeover, a hesitant American public — and a still-subpar charging infrastructure — could still hold the country back. (💲Link)Until recently, automobile theft had declined for decades thanks to technical advances such as car alarms and electronic engine immobilizers, but vehicle crime is soaring in the US, Canada and Germany. Part of the responsibility lies with manufacturers, whose security features have been too easily circumvented with tools and information found online. (💲Link)China produces EVs more cheaply than anywhere else. That is mainly due to Beijing's decade-old industry promotion policy of incentives and subsidies that enabled China to become the world's biggest EV market and control the global EV supply chain, including raw materials. EVs made in China are typically a fifth cheaper than EU-made models, the European Commission says. (💲Link)Chinese automakers are pursuing two distinct tracks:

One: Affordable, gasoline cars are going to price-sensitive consumers in developing markets in South America, Africa, and Southeast Asia. China is now the number one supplier of cars to Mexico. There are also huge numbers of new Chinese cars going to Russia.
Two: China-built electric cars, on the other hand, are landing mostly in Europe. Chinese brands already account for 10% of Europe’s EV sales. (Link)

Electric vehicles, you might have heard, have a mineral problem. Beneath the floor of an EV sits a 900-pound battery filled with minerals extracted from around the world. Millions of tons of lithium, cobalt, bauxite and other minerals are mined, processed, shipped and refined — sometimes leaving a trail of human rights and environmental abuses. For some, that makes fossil fuel engines look good by comparison. No one wants to drive around on the cobalt equivalent of blood diamonds. But does all this mining negate the climate and environmental benefits of EVs compared to sticking with gas? (💲Link)For a Tesla Model Y, currently the bestselling EV, it could cost as little as $9 or as much as $40, depending on whether you're charging at home or at a far more expensive Level 3 fast charger. (Link)Tesla is pushing the envelope by testing even bigger presses to cast virtually the entire body of a car. Scaled up, this technique could Tesla closer to Musk’s goal of halving production costs. (Link)In the Chinese market, insurance claims frequency of EVs is on average 56% higher, and claims severity on average 52% higher, than those of ICE vehicles across all vehicle price ranges. (Link)Uber was supposed to help with traffic. It didn't. Robotaxis will be even worse. (Link)California Gov. Gavin Newsom has vetoed Teamsters-backed legislation to effectively ban heavy-duty driverless trucks in the state. The veto maintains the status quo: Autonomous trucks over 10,001 pounds still must have human safety drivers. Had Newsom signed the bill, safety monitors would have become permanent. (Link)Drift Capital, an alternative asset manager providing fractional investments in a diversified portfolio of collectible automobiles, has launched the closed-end Drift Fund, offering accredited and institutional investors the opportunity to invest in a collection of some of the most remarkable automobiles ever made—both contemporary and classic. (💲Link)DNV has published its "Maritime Forecast to 2050" report, offering a fresh outlook on regulations, drivers, technologies, and fuel availability towards decarbonization of our waterways. (Link)Ukraine's 3rd Separate Assault Brigade that is now fighting near the Russian-occupied city of Bakhmut in Donetsk Oblast, has developed two prototypes of unmanned ground vehicles (UGVs) designed to help front-line troops in their treacherous assault missions. The first version dropped anti-tank mines that wounded Russian troops. The second, which has yet to be tested on the battlefield, can quietly approach enemy positions on any terrain and shoot rocket-propelled grenades. (Link)A squishy, lightweight robot with complex sensors that can be dropped onto the moon or Mars from high above the surface one day is expected to help humanity perform science in rough terrains. (Link)The Los Angeles Police Department released video of a barricade situation in Koreatown involving an armed suspect, and it included footage from the department's new "robot dog." (Link)"The manual is slower and results in a higher fuel consumption [and] sometimes has also a lower top speed, so the manual actually from an engineering standpoint made no real sense anymore.” BMW M CEO Van Meel goes on to say that offering a manual transmission nowadays is just a "heritage" thing. The M2 is, after all, going to be the last BMW M car with a clutch pedal. (Link)

Carta has a great document benchmarking valuations for pre-Seed fundraising. (Link)

A story of how vanity license plates can sometimes backfire. (Link)

Have a great week,Steve Greenfield

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Notable & New

🎥 On this week's Future of Automotive segment on CBT News we dive into the UAW strike at the big three domestic automakers and speculate on how this might play out. (💲Link)🎤 I caught up with Marcus Amick for this week's episode of The Culture Lane where we discuss some of the challenges that consumers continue to face during their car shopping and buying process. (Link)📢 Thanks to Automotive News for the great coverage of Automotive Ventures' portfolio company Go Eve, an investment out of our DealerFund. (Link)🗞️ It was a pleasure being interviewed for this The Wall Street Journal article on car buying. (💲Link)

Companies to Watch

🌟 ARX Landsysteme is a defense technology manufacturer developing autonomous unmanned systems to help soldiers and civilian first responders make better decisions and take more effective action in life-threatening situations. (Link)

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