As I prepared this week’s edition, I was reminded of the proverb “May you live in interesting times” (a saying often having less than positive implications).

Contrary to what you might frequently be reading in the press, we at Automotive Ventures believe that humans are much better off than they were even just 20 years ago, by almost any objective measure.

We are a team of technology optimists, and believe the future is bright, although changing at a faster pace than ever in the history of humankind. We are all living through an era of dramatic progress in technology in general, and AI specifically, the side effect of which is causing a lot of uncertainty, leading to tension and anxiety across many segments of the population.

We believe that where there’s rapid change, as we’re experiencing now, there will be opportunities to invest in entrepreneurs uniquely positioned to build businesses that benefit from it.

We believe that the entrepreneur is the lifeblood of capitalism and a country’s economic engine. No company would exist without the initial spark and effort of an entrepreneur. Small businesses and their founders are absolutely vital to the global economy, and the best way to simultaneously benefit the economy and generate wealth is to identify and financially back truly talented early-stage innovators.

As you digest the content of this week’s newsletter, let’s appreciate that we’re all living through the most exhilarating period in history, enjoy the rapid pace at which society is making progress, and prepare for an even more amazing future ahead of us.

I am thankful that we’re all on this journey together.

Until next week,

Steve Greenfield
General Partner
Automotive Ventures

🚗 Automotive

Americans got into more than six million traffic accidents last year. Depending on the type of crash, the chance of getting a payout from your insurer has become increasingly remote. Auto insurers didn’t pay out on 45% of auto liability and medical claims they resolved last year, according to The Wall Street Journal analysis of thousands of company regulatory filings. That rate might change slightly as more claims are resolved, but it is up from around one in three, or 35%, of such claims a decade ago. Americans are required to pay for car insurance as a condition of driving. Yet often, the insurance doesn’t provide the financial backstop that car owners were expecting. The near flip-of-a-coin chance of being left empty-handed on liability and medical claims, and the yearslong trend toward relatively fewer payouts, mirrors what’s happening to homeowners and their insurance coverage, the Journal previously reported. | The Wall Street Journal ($)

The Freedom Fuel Network is surrounded by mystery. The company has revealed little about itself publicly while drawing praise from The White House for its discount gas. Public documents link the network to a Baltimore Ravens special-teams coach, a New Jersey-based energy investor and a fuel distributor sued repeatedly for unpaid debts and other alleged misconduct, including fraud. Their refusal to talk publicly about the project — and the White House’s promotion of it — has prompted wide scrutiny, including from fuel industry analysts trying to figure out how they manage to sell gas at prices significantly lower than geographic competitors. When the network launched in early July, it charged $3.47 per gallon (in honor of President Donald Trump, the nation’s 47th president, Trump said). At the time, the price was about 40 cents a gallon below market, according to industry analysts. | The Washington Post ($)

Glenn Mercer estimates how much a typical American car buyer would pay to avoid haggling over the car’s price. Given a buyer might spend 2 hours in the new-car store getting the deal done, this translates to $500 an hour or so to just not have to talk price. | Glenn Mercer

We have all been there: You’re getting your car serviced, and the mechanic or agent says you need an expensive repair. But you can’t tell if it’s a genuine fix or an unnecessary upsell. Some drivers now consult artificial intelligence to gut-check quotes, diagnose problems—and even guide them through basic repairs. Mechanics have mixed opinions on this outside consultant. When the chatbot advice confirms and explains their diagnosis, they welcome it. When it veers into hallucinations and misinformation, it’s a hindrance, they say. | The Wall Street Journal ($)

Cargo theft costs the trucking industry $18 million a day according to the American Trucking Association, with vehicle transport companies increasingly victimized by hackers looking to exploit the rising value of cars and trucks. Indeed, it’s more than simple car theft. Auto shipping companies are losing loads of money to thieves and fraudsters using sophisticated methods. “This isn’t the like out of the movie type of scene where like guys jump out of the woods and take cars. These are guys that are sitting behind computer screens and they are using a network, often unknowingly, to members and participants of the network that are moving cars to certain locations, and then before you know it, the car is out of the country and it’s not coming back,” Matt Bradley, CEO of auto transport platform, Super Dispatch, says in an interview. | Forbes ($)

Outlawing Ontario’s speed safety cameras has triggered an explosion of urban speeding, with officials in cities like Toronto, Ottawa and Guelph reporting steep increases in drivers exceeding posted limits. The removal of speed cameras has led to a surge in speeding, with the proportion of drivers exceeding the posted limit by 11 to 15 kph more than tripling in some areas, and the share exceeding 15 kph jumping significantly. The effectiveness of speed safety cameras in reducing crashes and speeding is not in dispute, with studies showing that they can reduce crashes by 14% and cause tickets issued to fall 75%, and policymakers who implement them will be following science and saving lives. | Bloomberg ($)

Elon Musk wants you to believe Tesla is no longer a car company, even if it’s still shaped like one. The company shipped nearly half a million cars last quarter and made 70% of its money from car sales. Still, Musk has spent the last few years making the case that Tesla is really an AI and robotics company, even if some of the AI happens to live in cars. And whatever the company financials suggest, Musk’s attention has been moving decisively to the AI parts of the company — projects like the Optimus robot and fully autonomous robotaxis — as the everyday concerns of a carmaker get pushed to the side. TechCrunch teamed up with Hudson Labs to map what Musk and Tesla’s other executives have spent the last seven years talking about on the company’s quarterly earnings calls. The data shows that Musk now speaks about artificial intelligence, along with robotaxis and Full Self-Driving software, nearly 50% of the time he opens his mouth. That’s up from prior years, like in 2022, when he typically spent 15% to 20% of the time on those efforts. | TechCrunch ($)

🇨🇳 China

Chinese automakers are now the de facto global standard for electric vehicles. BYD is outselling Tesla with highly affordable models. Consumer electronics giant Xiaomi Technology is rolling out stylish sedans and SUVs outfitted with dizzying in-cabin infotainment tech. But staggeringly high tariffs, hovering at 127.5% for Chinese-built EVs, have kept those cars largely out of American driveways. But they have not kept them out of Waymo’s fast-growing U.S. robotaxi fleet. In late May, Alphabet Inc.’s self-driving vehicle company began deploying small electric vans, built by China’s Zeekr International brand–which it calls the Waymo Ojai–in cities including Los Angeles and San Francisco. At the time, Waymo would only say it had “more than 100” of the friendly-faced, periwinkle-colored minivans on the road. Most industry watchers assumed the Mountain View, California-based company would ultimately operate fewer than 1,000 owing to the excessive import fees. That’s not the case. | Forbes ($)

Lucid Motors’s new chief executive has warned that the U.S. car sector would not “stay isolated” from cut-throat competition posed by Chinese rivals as he predicted a shakeout in the crowded global EV market. “Everyone is fighting for survival . . . the number of EV suppliers we have today is excessive and they will not survive,” Silvio Napoli, who took over as head of the struggling Saudi-owned group in June, told the Financial Times. Steep U.S. tariffs and restrictions on Chinese car software have protected the American car industry from the influx of affordable EVs from the likes of BYD and Geely. But Napoli said newer EV players from China would continue to infiltrate global markets and the US was unlikely to keep them out indefinitely. “I have no illusion that the U.S. will stay isolated. In the end, strong competitors make better companies,” Napoli, the former boss of Swiss elevator manufacturer Schindler Group, said on Tuesday. | Financial Times ($)

General Motors and China’s SAIC Motor have extended a decadeslong Chinese joint venture that was set to end next year, the U.S. automaker said Tuesday night. The extension comes amid a rapidly changing automotive landscape in China that has included the swift rise of domestic automakers and a shift away from traditional Western brands and legacy joint ventures. GM declined to provide financial details of the extension, which comes amid heightened geopolitical tensions between the U.S. and China, including a potential stateside ban of Chinese brands and vehicles. The largest disclosed change in the dynamic of the agreement is its length. The initial deal established in 1997 was for 30 years, and now the companies have announced a 20-year extension of the 50-50 joint venture to 2047. The deal also extends a partnership with GM, SAIC and Guangxi Automobile, including its Wuling Motors subsidiary, according to a GM spokesman. GM noted that the deal will focus on refocus domestic sales of Buick and Cadillac models in China in addition to exporting products, including Chevrolet models, built in China for non-U.S. markets. | CNBC

The academic debate about Chinese overcapacity speaks to a broader and more fundamental struggle under way: a material contest over the worldwide shape of industrial production. On one side is China, which has shown itself supremely proficient in all manner of production. In that sense the China commerce ministry is correct that China is competitive. But what foreign companies are competing against is not just supple, hard-driving Chinese firms but a whole-of-state approach to industry. Foreign companies, however big, stand little chance against a Leninist developmental state that has attained China’s size, wealth and modernity. As Rhodium Group, an American research firm, points out, the Chinese state once limited its intervention to a handful of sectors that it deemed to be strategic; now it pursues an “industrial policy of everything”. On the other side is everyone else. Whether other countries are willing or able to defend what remains of their industrial turf is an open question. For at least a decade, America has been groping for a response. It has imposed tariffs on Chinese goods and worked to reshore production; despite President Donald Trump’s scorn for allies and admiration for China and Mr Xi, his administration wants to work with other countries, for instance, in securing critical supply chains. Europe is inching its way towards (embryonic) made-in-Europe plans. But both America and Europe have already run smack into Chinese dominance, above all, its rare-earth stranglehold. This is the part left unsaid in China’s rebuttal of all the overcapacity talk: try as they might, other countries struggle to fight back. Industrial might makes right. | The Economist ($)

China’s dominance over greater portions of global supply chains is making the country’s export machine even more formidable—and resilient against tariffs, which tend to target finished goods. In the first five months of 2026, China’s exports of intermediate and capital goods jumped 25% and 12%, respectively, from the same period a year prior, while consumer goods exports increased 4%, according to a McKinsey & Company Global Institute analysis of China’s official customs data. The transformation is threatening the economic moats of advanced-manufacturing economies such as the European Union, Japan and South Korea. Producers of chemicals, machines, batteries and other industrial goods in those economies once depended on Chinese factories as customers, but now China is a formidable competitor abroad and even in their home markets. For the first time in decades, Germany imports more advanced capital goods from China than it exports there. The shift is raising alarms worldwide. European leaders are considering new protective measures against what many have dubbed “China Shock 2.0.” And while South Korea and Japan have benefited this year from a surge in exports related to artificial intelligence, swaths of industry under the surface are losing global market share. | The Wall Street Journal ($)

America rules the waves. Yet the country’s naval dominance is increasingly under threat, as China has built a floating bulwark of its own. China’s efforts to control what it regards as its territorial waters (despite the objections of its neighbors) and project power globally have demanded a fast-expanding navy. This has grown in short order from a small coastal-defence force to become the largest navy in the world, according to a report in 2020 by what was at the time America’s Department of Defence. China’s 350 “battle force” vessels—including battleships, aircraft carriers, minesweepers and auxiliary craft—outnumbered America’s 293, a figure that had barely increased in two decades. China’s plans to expand its armada to 435 ships by 2030 seem plausible. America’s hopes of adding 58 to its fleet by 2031—and the construction of a “Trump Class” nuclear-powered battleship, proposed by the president last year—are far-fetched. That is because China has something America sorely lacks: its rise as a naval power has been underpinned by a vast commercial-shipbuilding industry. After the Second World War, Europe’s world-leading shipyards were eclipsed first by Japan, using cheap steel and labour along with new manufacturing methods, then by South Korea. More recently it is China that has come to dominate. Over the past 25 years its share of global shipbuilding tonnage has risen from 5% to over 50%. America’s commercial-shipbuilding industry, by contrast, barely registers, hampering the ability of its navy to keep pace. | The Economist ($)

🤖 Autonomy

Waymo co-CEO Dmitri Dolgov laid out the clearest technical case yet for why cameras alone can’t take a self-driving system to full autonomy, arguing that “weak sensing” hits a safety ceiling long before it reaches superhuman performance. He never said the word Tesla. But camera-only is Tesla’s entire bet, and this was a direct shot at it. Dolgov made the comments in a talk at Y Combinator’s Startup School, walking through the lessons Waymo has learned building its driver over close to two decades. He put the sensor question on the table plainly: “there’s been a long-standing debate about what kind of sensors do you actually need for autonomous driving.” His answer draws the line that camera-only advocates tend to skip right past. “Humans of course can drive with just eyes, so there’s that proof of existence,” he said. “If the goal were to just approximately match human performance or to build an assist product, that’s a very reasonable way to go.” Then the catch. If you’re targeting full autonomy and strongly superhuman performance, he said, “you find that weak sensing just leads to a safety curve that flattens out way too early.” | Electrek

Tesla says its FSD Supervised driver-assistance system has been in over 5.2 times fewer collisions than manual driving across 65 million kilometers in five EU countries over the last four months. The self-reported figures, covering the Netherlands, Lithuania, Estonia, Denmark, and Belgium, also claim steep drops in automatic emergency braking events, harsh acceleration, harsh braking, and hard swerves compared to manual driving. Worth remembering: FSD Supervised is a driver-assistance feature that requires an attentive driver behind the wheel, not autonomous driving, and Tesla hasn’t published the underlying data for independent review. | X

For years, Tesla has faced intense public and regulatory scrutiny over the safety of its self-driving software. Now, a former Tesla manager is blowing the whistle on what he says is the the Elon Musk-led automaker’s dangerous approach to testing and deploying its autonomous vehicle technology. In a federal lawsuit reported by The Independent, Javier Medrano accused Tesla of turning its autonomous test fleet in Houston into 24/7 “rolling hazards” by “aggressively” scaling up operations. The size of the fleet more than doubled to a size that Medrano claims was impossible to oversee on his own. Despite consistently pleading higher-ups for more help, he alleges his warnings were ignored, and he was later fired. “It almost feels like these big corporations can get away with anything, and people just kind of put their heads down and say, ‘Well, this is how it is,'” Medrano told The Independent. “And it breeds an environment where people don’t say, ‘This is not okay.'” | Futurism

Caterpillar has filed a federal lawsuit alleging patent infringement against a company that sells aftermarket kits to convert construction equipment to autonomous operation. The lawsuit accuses Bluelight Machines of violating five Caterpillar Paving patents for compaction and autonomous operation. Filed June 10 in U.S. District Court in Delaware, the suit seeks a permanent halt to the products’ sales, triple financial damages, legal costs and a jury trial. Bluelight was formed in 2023 in Pittsburgh. Its aftermarket autonomy kits are available for ride-on vibratory soil compactors and articulated dump trucks. Bluelight CEO Dick Zhang says about 200 of the kits have been installed for active subscriptions. The kits can convert machinery to unmanned operation for about $50,000 to $60,000 in less than 2 hours, Zhang says. One person can monitor and manage multiple machines from a single mobile device. He says the lawsuit is baseless, as Bluelight’s kits were developed from free, open-source software that has been around for 20 years. | Equipment World

🦾 Robotics

Globally, Amazon delivered more than 40% of items same day or overnight in the first half of the year versus the same period last year. And it expanded ultra-fast delivery service Amazon Now, which promises delivery in 30 minutes or less on thousands of everyday essentials, to 80 cities and towns across the United States and several major cities in Egypt. Amazon Now is available in nine countries and over 250 cities and towns, including Atlanta, Houston and Denver. The service has proven popular, with more than 80% growth in gross sales and units sold quarter-over-quarter and more than 60% more customers served from the prior quarter, CEO Andy Jassey told analysts. Faster delivery speeds combined with a broad selection of products on the marketplace are driving consumers to make more purchases on the Amazon site, he added. Ultra-fast delivery is the latest move to increase delivery speed and keep customers buying on Amazon’s marketplace by offering extreme convenience. Amazon also offers one-hour and three-hour delivery on more than 90,000 products and same-day delivery on millions of items. Chief Financial Officer Brian Olsavsky said Amazon made progress optimizing inventory, shortening shipping distances, reducing touches per package, and improving consolidation rates. The company is also expanding deployment of robotics and automation, which have been at the center of logistics operations for many years. Amazon recently surpassed 1 million robots developed, produced and deployed across its operations network. | Freightwaves

FedEx is scaling up use of a specialized robot for loading truck trailers at its Hagerstown, Maryland, hub after validating the technology from startup Dexterity over several years. And Pickle Robot Company said it will pair its trailer unloading robot with Ambi Robotics’ system to automate the movement of packages from the trailer through pallet stacking and warehouse receiving operations. The expanded use case in Hagerstown will allow FedEx to continue evaluating Dexterity’s AI-enabled trailer-loading system at a larger operational scale in a high-volume logistics environment. Technology assistance is being pursued to improve worker safety and network efficiency. Loading and unloading trailers is one of the most physically demanding and challenging tasks for warehouse workers in FedEx’s package operations, requiring real-time problem solving. Automating that workflow has been difficult because of the variability of package sizes, weights, and loading conditions, as well as the need to implement it across thousands of trailers in the FedEx system. The advent of physical AI — which lets autonomous systems like robots perceive, understand, reason and perform or orchestrate complex functions in the real world by executing movements through motors, robotic arms or wheels — has brought the technology closer to commercial reality. “Truck unloading and truck loading are a very difficult problem for robotics to solve — packages come in every size, shape and weight,” said CEO Raj Subramaniam, in an interview with The New York Times in January. “We’re not looking for humanoid robots. We’re looking for super humanoid robots because maybe they need to have a couple of elbows. More degrees of freedom. It’s not ready for prime time yet.” | Freightwaves

🤖 Artificial Intelligence (AI)

Mark Zuckerberg from Meta paints an optimistic future for AI in his Op-Ed in The Wall Street Journal: Humanity has witnessed many transformative advances. Each time there is fear that people will be left behind. But each time humanity has come out with more people sharing greater prosperity, health and freedom. We believe this will be true with AI as well, and the abundance of the future can be shared by everyone. We also believe that the values that got us to this point—liberty, open inquiry, free enterprise and equal opportunity—are also the values to build a positive future. Putting power in people’s hands to pursue their own aspirations is how humanity has made the most progress. Novel ideas and major steps forward rarely originate from established institutions alone. They came from the brothers in a bicycle shop who believed people could fly, the bookbinder’s apprentice with no schooling who figured out how to generate electricity, and the kid in a garage who thought personal computers could be for everyone. We believe this will continue to be true. As everyone gains more powerful tools, each person will become more capable of shaping the future, not less. | The Wall Street Journal ($)

Generative AI is steamrollering the once booming industry known as software-as-a-service, or SaaS, where customers access software over the internet, typically on a subscription basis. SaaS exploded in the 2010s, as companies such as Slack and Zoom raised hundreds of millions of dollars from venture-capital firms and others went public in blockbuster IPOs. Now people in Silicon Valley are talking gloomily about the “SaaSpocalypse.” AI threatens to make some software tools obsolete, particularly those built around narrow tasks such as legal drafting, research and other repetitive work. Shares of public SaaS companies such as Workday, Salesforce and Adobe have fallen more than 30% from their peak over the past year. IBM lost $69 billion in value in a single day in July after it issued a profit warning as customer spending shifted from software to AI hardware. Earlier this week, Italian tech conglomerate Bending Spoons agreed to acquire workflow software company Airtable for $1.3 billion, well below the company’s last private valuation of $11 billion. SaaS companies are under immense pressure to reinvent themselves. Inside boardrooms, leaders have discussed the risk that entire businesses will amount to little more than features inside tools released by leading AI labs Anthropic and OpenAI. Investors, worried that some software bets will go to zero, are pushing startups to adapt. | The Wall Street Journal ($)

Over the past few months, AI agents undergoing cybersecurity evaluations have escaped their boundaries, accessed the internet, and, in some cases, hacked into real-world systems. The incidents have involved models from OpenAI, Anthropic, Meta, and most recently, Chinese AI lab Moonshot AI, with testing conducted by several different organizations including a cyber evaluation startup called Irregular. The episodes expose a growing problem for the AI industry: As autonomous agents become more capable, the environments designed to safely test their limits are failing to contain them. | TechCrunch ($)

AI voice start-ups are attracting more interest from investors. Venture capital investment rose to $7bn in the first quarter of this year, compared to just under $1bn in the same period last year, according to PitchBook data. | Financial Times ($)

✈️ Aviation & Space

President Trump said he wants a jet used as Air Force One to be “maxed out,” and there are plenty of options available. The plane can be modified to refuel midair, or withstand a nuclear blast. Laser beams that destroy missiles can be added. The features are among those enabling the nation’s commander in chief to travel around the world securely and safely. They also may take years and cost hundreds of millions of dollars to add to the plane. There are three Boeing 747s that serve as Air Force One, two of which went into service during the George H.W. Bush administration. Those jets are known as VC-25As. The newest jet—one donated by the Qatari government—went through a rapid retrofit to meet Trump’s request for it to fly by July 4, America’s 250th birthday. Those upgrades cost $400 million, according to United States Air Force officials. Now, the plane, known as the VC-25B Bridge, will undergo additional modifications in the fall. The work comes after a lack of defensive capabilities led Trump to fly on an older presidential jet on a trip from Turkey. The White House said the upgrades will take “about a month.” The Pentagon said the project cost is classified. Current and former government officials familiar with Boeing’s Air Force One replacement program expressed skepticism that a month would allow for adding substantial safety or defensive features. | The Wall Street Journal ($)

SpaceX may be a rocket company, but nowadays it feels more like a roller coaster. This past week alone, Chief Executive Elon Musk watched as its shares plummeted almost 14% in one day—which wasn’t even the worst performance in SpaceX’s short tenure as a publicly traded company. By Friday, the shares had soared more than 20% from where they began the week. Put another way, that was a more than $300 billion market-value swing. For most CEOs, that would be a vomit-inducing ride. For Musk, it’s a nagging reminder that he’s back in grind mode, having to deliver on all of his high-flying promises for SpaceX’s performance. He made those earlier this year to launch the biggest IPO ever in June, a headier period that has now given way to the more down-to-earth reality of executing on the strategy. Such volatility is exactly the kind of distraction that frustrated Musk during the grueling years it took him to make Tesla profitable. And the experience informed his decision to hold off on taking SpaceX public for so long. | The Wall Street Journal ($)

Pretty much all of SpaceX’s most promising ambitions hinge on carrying larger payload capacity at lower cost than today’s rockets. And that means the company can little afford continued hiccups with Starship, the successor to SpaceX’s tried and tested Falcon 9 rockets. Falcon 9 has been delivering payloads to space for more than 15 years at a rising pace: The company launched 165 of them last year, or nearly one every other day. But as the space economy has developed, upgrading from Falcon 9’s capacity of lifting about 23 metric tons into low-Earth orbit has become a priority. One reason is simply that a bigger payload means larger satellites can be launched. And satellite size often correlates with satellite capability. Of equal importance, bigger capacity and reusability translate into lower launch costs per unit of weight. That makes it economical to do a lot more things in space and widens SpaceX’s already-large competitive moat. | The Wall Street Journal ($)

In 2016, Elon Musk defended Tesla’s proposed acquisition of SolarCity, a solar energy firm co-founded and run by his first cousins, by calling it a “no-brainer.” As it turned out, the purported benefits of the $2.6 billion deal, which brought a cash-burning, debt-laden firm under the Tesla umbrella, never materialized, and SolarCity lost market share in the years that followed. Observers of Musk today might worry he is on the precipice of facilitating another ill-fated union, this time of his two crown jewel companies, newly public rocket ship and satellite internet company SpaceX and electric vehicle maker Tesla. But that merger would be far more defensible than the SolarCity deal was at the time. A merger would likely benefit shareholders of both firms by resolving some of the conflicts associated with Musk running them separately, and by easing intercompany dealings that already occur. Even so, there are risks around the capital-intensive expansion both companies are planning in the coming years. | The Information ($)

🚘 Car of the Week

Our Automotive Ventures “Car of the Week”: a 1966 Ferrari Dino 206 S Berlinetta. | Gooding Christie’s

📰 In The News

📢 Steve caught up with Ju-min Park from Reuters to discuss the rumor that Tesla is weighing a spin-off or sale of its China business ahead of a potential merger with SpaceX. The way we see it, Tesla would have three options for their China operations: 1. Spin off to shareholders; 2. Sell to a Chinese entity (probably an automaker); 3. Close down the business in China. Whether there's any merit to the rumor, the genie is out of the bottle...no matter ⁠how this plays out, there'll be a negative effect on Tesla's sales in China. | Reuters ($)

📢 Thanks to Calgary Economic Development for their support of Automotive Ventures portfolio company Brilliant Harvest. | Calgary Economic Development

👀 Automotive Ventures Company to Watch

DealerCopilot deploys role-based AI agents that execute best-practice workflows consistently and autonomously — driving ROI, productivity, and a better customer experience. | DealerCopilot.ai