We’re now seeing more than 400 startups a month—roughly 5,000 a year—and investing in 10. The challenge isn’t finding interesting ideas. It’s identifying businesses that can grow to become indispensable.

Our litmus test: Is the startup building a vitamin or a painkiller?

It’s a useful metaphor for the type of customer pain that you’re solving for, and equally importantly, the customer’s need, willingness to pay, and reaction if you threatened to take the product away.

Threaten to take away a person’s iPhone, their access to TikTok, Amazon or Netflix, and see how they react.

Vitamins are nice-to-haves. Painkillers address problems that demand attention.

VCs love to invest in painkillers. They could care less about vitamin pills.

If you’re an entrepreneur, give some thought to just how painful a problem you’re solving, and once the customer tries your product, whether they’re ever likely to cancel.

Until next week,

Steve Greenfield
General Partner
Automotive Ventures

U.S. President Donald Trump recently claimed credit for Ford's River Rouge complex moving to 24-hour F-150 production. “I don’t want Canadian parts,” he said. “I don’t want Canadian anything.” There’s one problem: The 5.0-litre V-8 engines come from Ford’s engine complex in Windsor, Ontario. Castings, suspension pieces, seat structures, fluid-management components and body stampings come from factories across the province. The aluminum for the vehicle is smelted in Quebec. Trump is threatening to impose a 50-per-cent tariff on Canadian vehicles, parts and steel beginning Jan. 1. That contradiction isn’t an exception to his automotive policy. It is the policy. If someone wanted to ruin Detroit while claiming to save it, there would be few more effective ways to proceed. | Automotive News ($)

Think of that sticker on the windows of new cars breaking down how much of the vehicle's content comes from the U.S. and Canada. From a manufacturing point of view, content from both places has long been considered deeply intertwined. But the U.S. and Canada failed to reach a new trade deal this summer, and the trade war between them has escalated quickly. In August, the U.S. enacted new tariffs on aluminum and steel, and President Trump has also threatened 50% tariffs on Canadian vehicles, auto parts and steel effective on Jan. 1. On Tuesday, Canada enacted retaliatory tariffs on a variety of U.S. goods — including on American steel and aluminum. All of this puts the auto manufacturing industry in a jam. For major U.S. carmakers, analysts say, the tariffs introduce uncertainty as companies determine whether to adjust their supply chains in the long run, or to absorb new costs in the short term. But for the smaller businesses that supply those big companies with thousands of parts — think bolts, or the steel rods for steering wheels — the tariffs could spell bigger, more expensive trouble. | NPR

Diesel prices are at an all-time high of $6.40, which is a problem for the U.S. as diesel is the fuel of commerce, powering trucks, trains, and more. The high price of diesel is building up vulnerabilities for the U.S. on several fronts, including logistics, manufacturing, and agriculture, and will play out through winter and into 2027. The current increase in diesel prices has legs due to factors such as crude oil prices, refining disruptions, and geopolitical tensions, and is likely to get embedded in freight contracts and hit consumers as it flows down the supply chain. | Bloomberg ($)

Earlier this year, the Federal Trade Commission issued an unprecedented penalty against General Motors: a five-year ban on selling customer data to consumer reporting agencies and third-party data brokers. For years, GM had been collecting all sorts of data on its customers — such as how often they sped or whether they drove at night — and selling it to brokers to generate risk profiles for insurance companies. More often than not, drivers were unaware of the degree to which their data was being collected. Many had unknowingly consented to it by signing up for an OnStar connected services plan, which activated a feature called Smart Driver that collected their driving data. GM was then turning around and sharing that data with two data brokers, LexisNexis and Verisk, both of which work with the insurance industry. In a 2024 blockbuster investigative report by The New York Times, some drivers said their insurance rates went up as a result of the data collection. The enrollment process was so confusing that many vehicle owners had no idea their data was being shared. Under the settlement with the FTC, GM has to make it easier for drivers to turn off location tracking, as well as enable them to access and delete their data collected by the automaker. But GM isn’t the only automaker vacuuming up data on its customers. | The Verge ($)

Internet scams are part and parcel of the online experience. If you use the World Wide Web, you’re sure to come across someone who wants your money, your identity, or heck, probably both. Some have been around long enough to spot—most of us know by now that a Nigerian prince doesn’t need money orders or Apple gift cards—but others are fresh enough to fake out even diligent shoppers. In the case of Wil Matthews, who recently purchased a Toyota 4Runner that never existed with financing from a Tier 1 auto lender, the scheme was especially devious. These shifty scams that cleverly employ artificial intelligence are running rampant on Facebook Marketplace, where big-ticket items (like cars) are bought and sold every minute. Matthews has seen dozens of ’em, even before he was duped earlier this summer. That’s partially why he was so shocked to find the 4×4 he’d agreed to pay roughly $36,000 for was imaginary. The TRD Pro model was realistically priced, so that didn’t raise any red flags as Matthews clicked through photos of the rig. To Matthews, who is a professional photographer himself, it just looked like a normal car posed in a parking lot. He even checked to make sure that the seller—named as Route 519 Motor in Donna, Texas—was legit. And, technically, Route 519 Motor Company is. But the scammers had cloned the company almost to a T, even producing window stickers, purchase orders, and a dealer license certificate that looked real but simply dropped “Company” from the end of the name. | The Drive

As U.S. air pollution rules have gotten stricter, automakers have installed equipment in diesel trucks to stifle their emissions. But an illegal aftermarket to undo these alterations quickly sprung up and spread. Software developers wrote new engine calibrations, and manufacturers produced hardware. Online distributors sold defeat devices, and repair shops installed them. Some truck owners wanted more horsepower; others were looking for a way around early pollution-control systems that could be unreliable and expensive to repair; still others felt government regulation infringed on their personal freedoms. Regardless of the motivation, the upshot is dirtier air: The US Environmental Protection Agency (EPA) estimated in 2020 that emissions controls had been fully removed from more than 550,000 diesel pickups since 2009 — about 15% of the trucks originally certified with the equipment. Defeat devices sold between 2009 and 2020 for certain vehicle models would lead to them releasing an estimated 570,000 additional tons of nitrogen oxides and 5,000 more tons of particulate matter over the vehicles’ lifetimes, the EPA calculated — the pollution equivalent of adding 9 million compliant diesel trucks to US roads. Nitrogen oxides contribute to smog and can aggravate asthma and other respiratory illnesses, while fine particulate pollution is linked to cardiovascular and respiratory disease and premature death. | Bloomberg ($)

It turns out that the one thing that can apparently bridge Washington’s partisan divide is AM radio. U.S. automakers may be forced to build AM radio into new vehicles within the next year. The U.S. House of Representatives, in a rare instance of bipartisan support, overwhelmingly approved legislation on Wednesday that would require new cars, trucks, and SUVs to be built with AM radio at no additional charge to consumers. The AM Radio for Every Vehicle Act, which would direct the National Highway Traffic Safety Administration NHTSA to require automakers to include AM radio in new passenger vehicles as standard equipment, will now head to the Senate. Until recently, proponents of AM radio have waged an unsuccessful lobbying effort for a mandate, arguing that it offers critical information during emergencies because its signal can travel long distances. But a groundswell of support from Democrats and Republicans, the broadcast industry, emergency responder organizations, and even former administrators of the FEMA is pushing this legislation closer to becoming law. | TechCrunch ($)

A wave of manufacturing investment promised to revive struggling heartland towns and build a U.S. supply chain for electric vehicles and batteries. But policy changes since Trump's return to office have upended the boom, costing thousands of jobs. The spending blitz promised an American auto-factory renaissance after decades of decline. The U.S. needed its own EV-and-battery manufacturing base to break away from China, which was increasingly dominating EVs and their supply chains. Anti-China trade policies – launched during Trump’s first term and continued under Joe Biden’s presidency – and federal EV subsidies to buttress the market ensured that America’s EV transition would require U.S. plants and workers. But since Trump returned to office, an array of automotive, environmental, trade and immigration policies has undermined factory projects and employment in Lordstown and across America’s heartland. Cancellations of EV projects and related battery facilities have snowballed, killing or jeopardizing tens of thousands of jobs, according to a Reuters analysis of data from Atlas Public Policy, a nonpartisan research firm that tracks clean-energy investments. These policies are undercutting Trump’s long-stated goal of creating auto-manufacturing jobs – core to his economic vision. And they are putting the United States further behind China and Europe in developing electric vehicles, some analysts say. The fallout is landing mostly on a swath of red states stretching from Georgia to Indiana, which drew so much EV-related investment it earned the nickname the Battery Belt. About 87% of the announced EV-related investments were in states Trump won in 2024, according to Reuters’ analysis of the Atlas data, which tracked activity from 2015 through August 24 this year. | Reuters ($)

President Donald Trump suggested he might be willing to allow a Chinese car company to build electric vehicles in the U.S. if it did so with American workers, while pledging to maintain the effective U.S. ban on imported vehicles from China. Trump, speaking in a Fox News TV interview, rejected the suggestion that he would allow Chinese cars to be imported into the U.S. “We don’t allow his cars into the United States, and we never did,” Trump said, referring to Chinese leader Xi Jinping, adding that if that were not the case the U.S. automobile market would be “overrun.” “Now, if China wanted to come in, and open a plant to build their cars here, I’d be OK with it — Japan does it — but they hire our people,” Trump said. “The big thing is they hire our people, they use our people.” “What I don’t want is them to build in Mexico and just, you know, build it inexpensively and ship it across the border,” he said. “That is un-happening.” | Automotive News ($)

A coalition of auto-industry groups urged President Trump to keep Chinese cars out of the U.S. ahead of a meeting with leader Xi Jinping, saying any entry by Chinese newcomers would undermine jobs and national security. In advance of Trump’s state dinner next week with Xi, the group—including the Alliance for Automotive Innovation and the National Automobile Dealers Association (NADA)—implored the president to “maintain policies that keep the door firmly shut to Chinese automakers seeking to sell, import or manufacture vehicles inside the U.S.” “Allowing them to open a domestic facility would provide a foothold in the U.S. market at the expense of manufacturers operating here,” the coalition wrote in a letter sent Thursday to Trump. The letter underscores rising anxiety in the car industry and corporate America that Trump is angling to notch a deal with Xi that would invite more investment in the U.S. by Chinese companies. Trump told Fox News TV last week that he opposes Chinese car imports into the U.S., but said he would welcome Chinese automakers building vehicles in America. | The Wall Street Journal ($)

Hyundai CEO José Muñoz warned that the U.S. could face a similar wave of Chinese auto imports that has disrupted Europe’s car market unless Washington maintains tariffs and other market-access safeguards. Chinese automakers have rapidly expanded in Europe, eroding the market share and profitability of established manufacturers including Hyundai and Volkswagen Group by offering vehicles at significantly lower prices. Munoz said Chinese vehicles are 30 percent to 40 percent cheaper than rival models in some markets, including Italy, Spain and France. That’s despite trade barriers including tariffs or minimum pricing commitments that the European Union imposed on Chinese-built electric vehicles after concluding they benefited from unfair state ⁠subsidies. | Automotive News ($)

Last year, the BYD “Shenzhen” set sail on its first voyage with 9,200 parking spots – or enough space to fill 20 football fields, making BYD’s transport ship easily the world’s largest. Now, as the Chinese car brand sets its sights on Europe and North America, it’s ordering 10 more. BYD placed an order for ten additional 9,200 CEU pure car and truck carriers. The order would bring BYD’s existing fleet to 18 LNG-powered ships, with a combined cargo capacity of more than 130,000 cars. This order is more evidence that car carrier demand is rising on the back of rising global demand for Chinese vehicle exports, and BYD’s moves to expand its dedicated fleet of owned marine vessels underscores the scale of its growing international ambitions. | Electrek

China has temporarily suspended construction of new projects to manufacture power and energy-storage batteries, pending a year-end review of industry capacity, Caixin Media reported. Projects already approved or under construction are expected to proceed, while those still in planning stages could be suspended, according to a separate report from Shanghai Securities News. The move comes after regulators twice warned manufacturers earlier in the year to avoid excess capacity growth. Officials are trying to ensure the sector avoids the fate of China’s solar industry, which dominates global manufacturing but has seen its top companies lose billions of dollars after a rapid build-out of factories outpaced growth in demand and led to vicious price wars. | Bloomberg ($)

Despite some unfortunate and highly publicized accidents, data suggests the best AVs are already a lot safer than human drivers. Nearly 1.2mn people die globally every year in road crashes; human error is a contributing factor in the vast majority. An independent analysis found driverless vehicles from Alphabet’s Waymo in four U.S. cities were involved in 68 per cent fewer crashes per vehicle mile than human drivers — though this is human drivers generally, not just professional ones. Driverless vehicles can struggle with “edge cases” ranging from snow to traffic light failures. But they may become better at handling such situations over time as the technology evolves. Rather than relying on their training on high-definition maps, the latest “vision-language-action” models, developed by companies including Wayve, use cameras paired with language-based AI to improve their ability to interpret unfamiliar situations. For now, robotaxis are costlier to operate due to development costs and extra kit. But Goldman Sachs says operational and scale efficiencies could cut costs sharply, and projects a $415bn global robotaxi market by 2035. As costs fall, driverless vehicles could start to displace driver-operated taxis and, in big cities, even private car ownership (the RAC found the average personal car in England is parked for 96 per cent of the time). AV evangelists suggest that could open the way, longer term, to their vision of “shared mobility”, easing congestion and cutting emissions — provided cheap AV rides do not encourage more journeys and lots of unnecessary miles by loitering vehicles. | Financial Times ($)

Plenty of people remain spooked by autonomous vehicles, or AVs. Some experts and policymakers have cautioned that AVs won’t necessarily make roads safer. When it comes to partial or full autonomy, the picture isn’t entirely clear, in part because there aren’t enough self-driving cars to make meaningful apples-to-apples comparisons. Yet mounting research suggests that self-driving cars crash significantly less often than people, and with far fewer injuries. Evidence also shows that advanced driver assistance systems (ADAS) and other building blocks of autonomy—some of which are already mandated on every new car—are also reducing occupant and pedestrian injuries and deaths, along with insurance claims. | IEEE Spectrum

There are around 1.4 billion cars on the world’s roads. If global travel trends mirror American habits of around 1.9 trips per vehicle a day (number of vehicle-trips divided by number of vehicles), that implies upwards of 18.6 billion personal car rides worldwide every week, maybe 20 billion once commercial trips are factored in. Autonomous Vehicle (AV) trips currently account for a fraction of one percent. At fivefold annual growth, a million becomes 5 million by end-2027 and 125 million by end-2029, still under one percent. AVs won’t reach mass adoption this decade. But keep that fivefold growth going, and AVs hit the steep part of the S-curve and 3 billion rides a week by the end of 2031. A year or two later, they would account for most rides worldwide. Even at a mere doubling per year, the takeoff arrives by the late 2030s. At present trends, driving has one to two decades left as an ordinary part of life. Most of us will live to see it sunset. | Human Progress

In early September, two teenagers got into a Waymo, but then ended up in the back of a police car. The robotaxi company said it detected “a violation of our terms of service involving a firearm,” pulled the car over, and alerted emergency services, according to the Los Angeles Times. Police arrested the passengers after allegedly finding a loaded AR-style “ghost gun” in the vehicle. The arrests exposed a lot of unanswered questions about privacy and autonomous vehicles, including what they are recording, what they do with the footage, and how much privacy riders should expect while riding inside them. Waymo’s camera-covered cars have already been drawn into the debate over privacy and surveillance. On a number of occasions, law enforcement agencies have obtained search warrants for footage captured by its cars, according to Bloomberg. Last year, the LAPD obtained footage of a hit-and-run that was recorded by a nearby Waymo vehicle. During anti-ICE protests in Los Angeles, five Waymos were vandalized and set on fire amid questions about whether the vehicles could be capturing images of protesters that might be used as evidence to identify or arrest them. Waymo does not publicly disclose how many law enforcement requests it receives or how often it complies. Those concerns echo the backlash against Flock’s network of automated license-plate readers, which have given police the ability to track cars across jurisdictions and have prompted growing fears about government surveillance and misuse. Unlike fixed Flock cameras, Waymos move through cities carrying cameras both outside and inside their vehicles. | The Verge ($)

Toyota estimates it could cost 1 trillion yen ($6.4 billion) annually from 2028 to modernise its ​factories as the world's biggest carmaker accelerates automation ‌and robotics deployment. Across the industry, automakers are turning to robotics to cut costs and address ageing infrastructure and labour shortages, ​a strategy that analysts say could open a ​growth avenue beyond vehicle manufacturing. The investment estimate covers ⁠Toyota, group companies and major suppliers. Without specifying whether ​it would definitely take place or for how many years ​it would continue, the company told investors around 400,000 robots would be needed to drive factory automation at those firms. The figure ​includes replacements for existing machines and new installations and ​humanoid and non-humanoid robots. The potential investment, discussed with investors earlier this ‌month, ⁠is tied to factory automation spanning industrial robots, automated logistics and future human-robot collaboration on the factory floor. | Reuters ($)

Adoption of artificial intelligence is soaring in New York City, but the great AI jobs apocalypse is nowhere in sight — except in entry-level tech positions, where demand has plummeted, closing off a key avenue to well-paying jobs for young workers. A survey by the Federal Reserve Bank of New York released earlier this month showed 60% of service firms now use AI, up from 40% a year ago. Half of manufacturers surveyed are using the powerful and controversial tool, twice as many as a year ago. But employment at tech companies in New York City, the key sector where AI is taking hold the fastest, remains stable, according to the nonprofit Center for an Urban Future. Ads for entry-level tech jobs — a critical foot in the door for young New Yorkers, including some with two-year associates degrees — have plunged by half since 2022, according to a new analysis by the Center for an Urban Future. | The City Reporter

President Donald Trump downplayed the growing alarm over risks from artificial intelligence after some of the industry’s leaders called for slowing the pace of development of the technology. “We’re leading China in AI. We’re the most sophisticated country in the world, and frankly, I want to keep it that way because whoever wins AI wins,” Trump said Sunday to reporters on the sidelines of the Irish Open. “And we can put guardrails. We can do this and that. But I think you have a lot of negative forces that are bringing it up that shouldn’t be bringing it up.” Anthropic Chief Executive Officer Dario Amodei issued a lengthy blog post Saturday calling on the industry to slow down and saying that the effort requires industry and global coordination. OpenAI chief Sam Altman and Elon Musk, who runs XAI, swiftly endorsed Amodei’s message. | Bloomberg ($)

What exactly does pacing of AI companies mean? | Tomasz Tunguz

China criticized warnings from leading U.S. technology executives to put the brakes on artificial intelligence development and claims that Chinese progress posed a dire security threat to the world. “Fearmongering, confrontation and vicious competition will only disrupt the process of global AI governance and serve the interests of no one,” Foreign Ministry spokesman Guo Jiakun said at a regular briefing in Beijing on Monday. “The development of artificial intelligence bears on the common well-being of all humanity,” he added, in response to a question on calls to slow frontier models and claims a Chinese advantage in AI could “pose grave danger” to the world. | Bloomberg ($)

Vinod Khosla believes that AI will do at least 80% of the economically valuable work humans do today in 80% of jobs—in other words, AI will do 64% of all human labor. And that shift will happen faster than most people in Washington believe. The question isn’t whether mass underemployment arrives by 2035 or 2040—he estimates 30% to 50% underemployment or unemployment with very wide error bars—but whether we have a coherent policy framework ready when it does and a strong safety net for those impacted. | The Information ($)

The soaring cost of moving oil around the world is making some long-distance crude trades uneconomical, threatening to disrupt flows at a time when fuel markets have never been tighter. The jump is being driven by a shortage of available supertankers. In some parts of the world, there are barely any of the ships — each the length of three football fields — left for hire. The squeeze is making faraway barrels less attractive and encouraging refiners to snap up supplies closer to home if they can find them. Moving a cargo from Houston to Asia now adds about $26 a barrel — $52 million a cargo — to the cost of supplying the world’s largest crude-importing region. That’s equal to roughly a quarter of the price of West Texas Intermediate futures. Before the war, shipping typically accounted for only a tiny fraction of the cost. | Bloomberg ($)

Our Automotive Ventures “Car of the Week”: a 1977 Lamborghini LP400 Countach "Periscopio" | Broad Arrow

📢 Very excited for this news from Automotive Portfolio company WarrCloud. | WarrCloud

📢 Very excited about this news from Automotive Ventures portfolio company Chaiz. | Chaiz

📢 Great to see this evolution from the Recurrent team. | Recurrent

📢 There’s little doubt that we’re in the midst of an AI-fueled investment bubble. The U.S. has never seen a boom like this one before. The global economy has no real experience with so much money being invested in just a single country, at such speed and scale, and with the potential to destroy so many well-paid, secure jobs. It’s uncertain how this will play out. | CBT News ($)

Lender Compliance Technologies’ Refund Control product is the industry’s first lender-controlled, cloud platform for managing and tracking Voluntary Protection Products (VPP) cancellations and consumer refunds – including GAP and service contracts. | Lender Compliance Technologies

Fixed Ops Roundtable Sep 21-25 | Virtual Event | Speaker | LINK

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Automotive AI Summit Sep 24 | Boston, MA | Speaker | LINK

Automotive News Congress Sep 28-30 | Detroit, MI | Speaker | LINK

CIECA CONNEX Conference Sep 29 - Oct 1 | San Antonio, TX | Speaker | LINK

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