Automotive Ventures Weekly Intel Report | Feb 5 2024
Nat Bullard's "Decarbonization 2023" presentation is available and contains a tremendous amount of valuable information. | Nat Bullard
Registrations of battery-electric vehicles in California fell in the fourth quarter of last year. EV sales have now fallen for two consecutive quarters in the state, even as California regulators set a 2035 deadline for all new auto registrations to consist of zero-emission vehicles. | Automotive News ($)
More detail on Tesla's deceleration in California in Q4. | @alojoh
Electric vehicle (EV) sales will continue to grow according to J.D. Power: EV share will grow from 8% in 2023 to about 12% in 2024 and 18% in 2025. It is expected to grow to 46% in 2030 and 64% by 2035. Automotive News ($)
Weaking EV demand in Europe? German electric vehicle (EV) sales fell by 16% in 2023 and are forecast to drop another 9% in 2024. | Reuters ($)
After years of surging growth, selling EVs is becoming tougher. Globally, market watchers have trimmed forecasts amid the enduring reality that the vehicles are much less affordable than equivalent combustion-engine cars — despite a price war kicked off by Tesla. | Bloomberg ($)
The shakeout in the global electric vehicle (EV) industry is picking up speed. Tesla rode cheap capital, technological breakthroughs and Elon Musk's outsized persona to a $1-trillion valuation - but only after years of heavy spending before turning a profit. | Reuters ($)
China’s new-energy vehicle sales are off to a sluggish start this year. Shipments of NEVs — fully electric and plug-in hybrids — to dealers in January dropped 37% from December to 700,000 units. | Bloomberg ($)
BloombergNEF estimates that 2024 global passenger EV sales will be 16.7 million units (and another million commercial EVs), about 20% of all global new car sales this year. Nearly 60% of global EV sales this year will be in China. | BloombergNEF
The average cost of car insurance rose more than 14% between the end of 2021 and 2022, before soaring another 20% by the end of 2023, the largest one-year increase since the 1970s. | The Guardian
Toyota set a new record high for sales globally, cementing its position as the world’s biggest carmaker. Global sales rose 7.2% to 11.2 million vehicles last year, surpassing the previous high of 10.7 million units in 2019. | The Wall Street Journal ($)
U.S. hybrid sales have been rising as consumers balk at high EV prices and are anxious about the range of electric cars, especially in more rural areas, where there could be long distances between charging stations. | Reuters ($)
Michael Sena's defense of the humble hybrid. | Michael Sena
Following Toyota's lead, GM plans to sell plug-in hybrids in North America again, after demand for full-battery electric vehicles has proven to be weaker than anticipated. | Automotive News ($)
Some influential dealers are pressing GM to introduce hybrid models, worried they risk losing customers who aren’t ready to make the switch to fully electric cars. Dealers expressed concern that more customers are looking for a middle ground between conventional gas-engine cars and EVs, which are more expensive and require regular charging. | The Wall Street Journal ($)
GM has realized it might have gone a half-step too far, too fast for today's new vehicle market. After previously calling hybrids a "half-step" it could skip en route to a future of fully electric vehicles, GM is changing strategy amid weaker-than-anticipated EV demand and the likelihood of tougher emissions rules later this decade. | Automotive News ($)
A global vehicle price war would destroy profitability and might eventually make many automakers takeover targets, Stellantis CEO Carlos Tavares says. | Reuters ($)
Auto parts maker Aptiv will reduce its stake in self-driving technology joint venture Motional and will stop further funding after incurring millions in losses related to the investment. Motional, a venture between the company and Hyundai, uses the South Korean carmaker IONIQ5 electric car for its robotaxi. It has been offering the service in Las Vegas through Uber and Lyft. | Reuters ($)
BYD may have overtaken Tesla as the global sales leader in the fourth quarter, but profitability is another matter. BYD has EBITDA margins of 11% (fluctuating between 11% and 16% during the past 10 years). Tesla is delivering EBITDA margins of 14%. Back in 2016, Tesla lost $8 for every $100 of sales, so its relative strength in generating earnings increased as BYD's declined. | Bloomberg ($)
The hydrogen fuel cell car segment in the United States — (effectively only California, where production models are available) — noted a significant decline during the fourth quarter of 2023. | Inside EVs
GM is cutting spending by about $1 billion on troubled robotaxi unit Cruise in 2024, but said it remains committed to the self-driving project. Cruise burned $1.9 billion in cash during 2023, and recorded a $2.7 billion pretax loss, not including $500 million in restructuring costs incurred in the fourth quarter as the unit cut staff. | Reuters ($)
If Tesla is successful with their 3D-Printing ("Gigacasting") aspirations, I wonder what downstream effects this will have on vehicle repairability and insurance premiums? | ARK Investment Management
Record exports from China's “new three” industries: electric vehicles, solar energy products and lithium batteries — rose 30% year-on-year to Rmb1tn ($139.3bn) in 2023. But for its developed country trading partners, the prospect of China’s low-cost imports flooding their markets and wiping out jobs in important industries such as the automotive sector and solar and wind power is prompting growing alarm. | Financial Times ($)
Lamborghini has sold out of supercars until 2026 as the wealthiest consumers show little sign of being hit by a broader global slowdown. The Italian super-car maker posted record sales of more than 10,000 vehicles last year. | Bloomberg ($)
Elon Musk’s $55 billion pay package at Tesla was struck down by a Delaware judge after a shareholder challenged it as excessive, a ruling that would take a giant bite out of Musk’s wealth and put the fate of his companies in question. | Bloomberg ($)
Flashback January 2018: Tesla announces a long-term performance award package for Elon Musk (subject to shareholder permission) if he succeeds in growing the value of the company as much as 10x. Deemed impossible by nearly everyone. Note, that Musk would get no bonuses or equity vesting over time — his payoff would strictly be based on performance. | The EV Universe
Multiple directors of Elon Musk's companies have deep personal and financial ties to the billionaire entrepreneur and have profited enormously from the relationship. The connections are an extreme blurring of friendship and fortune and raise questions among some shareholders about the independence of the board members charged with overseeing the chief executive. Such conflicts could run afoul of the loose rules governing what qualifies as independence at publicly traded companies. | The Wall Street Journal ($)
The first human patient received an implant from brain-chip startup Neuralink and is recovering well, the company's billionaire founder Elon Musk said. The U.S. Food and Drug Administration had given the company clearance last year to conduct its first trial to test its implant on humans, a critical milestone in the startup's ambitions to help patients overcome paralysis and a host of neurological conditions. | Reuters ($)
Companies brought in robots. Now they need human ‘Robot Wranglers.’ Lost and confused automatons create work for people. Bots wander off ‘like a child’ and irritate workers by following them or ‘trying to get under their desk.’ | The Wall Street Journal ($)
It looks like 2024 will be the year that Amazon will employ more robots than humans. | ARK Investment Management
Caterpillar demonstrated a prototype of an all-new battery-electric underground mining truck at its Australian proving grounds, making it the latest addition to a rapidly growing portfolio of battery-electric and semi-autonomous mining machines. | Electrek
For much of maritime history from Columbus onward, pirates, privateers and powerful navies set the rules on whose ships could sail where—enforced within cannon range of prowling warships. Which flag fluttered above deck mattered: Barbary pirates from the 1780s onward preyed on American ships after they lowered the British banner for the new Stars and Stripes, prompting the young nation’s first foreign war. The alternative concept—“freedom of the seas”—dates to at least the 1600s, holding that ships of any nation should be permitted to travel the open ocean. But it only took hold after the U.S. Navy emerged victorious over Imperial Japan in 1945. At the time, the U.S. Navy boasted about 7,000 ships—alongside a political class populated with former Marines and sailors—and if any foreign adversary harbored a different vision of how the seas should work, it lacked the gunboats to impose it. Today, America’s navy can field fewer than 300 ships and the world’s largest fleet belongs to Beijing, which is reinforcing its unilateral claim on the vast South China Sea by creating and fortifying artificial islands. | The Wall Street Journal ($)
Have a great week,
Steve Greenfield
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Notable & New
Steve catches up with Jim Fitzpatrick from CBT News to discuss Automotive Ventures funds. | CBT News ($)
Steve had a great time at the RockED booth at the National Automobile Dealers Association (NADA) Convention in Las Vegas. | RockED
Steve kicked off the American Financial Services Association (AFSA) conference with Timothy Gill, Melinda Zabritski and Michael Dunne. | AFSA
Justin had a chance to participate as a judge for the "Shark Tank session at the ATI (Auto Tech Investments) Conference. | Auto Tech Investments
Thanks to everyone who attended the ATI (Auto Tech Investments) Conference at NADA. | Auto Tech Investments
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