Automotive Ventures Weekly Intel Report | Mar 18 2024
Intel Report: The Weekly Mobility News That Matters
BY AUTOMOTIVE VENTURES | MAR 18 2024 | VIEW ONLINE
Automotive Ventures is excited to announce that portfolio company Axion Ray has raised $17.5 million in Series A funding, led by Bessemer Venture Partners. Congratulations to Daniel First and the team! | Axion Ray
What We're Reading
One out of 5 new-vehicle sales that involved a trade-in were upside-down in the fourth quarter of 2023, compared with 17.7% in the last quarter for 2022 and 14.9% in the same period for 2021. The average new-car buyer with an upside-down loan owed a record $6,064 at the end of 2023, compared with $5,347 a year earlier and $4,143 in the last quarter of 2021. | The Washington Post ($)
New battery-electric vehicle (BEV) registrations rose 15% in January, a pace that was significantly slower than the 52% growth reached in the 2023 calendar year. Electric vehicles captured 7.8% of new U.S. light-vehicle registrations in January compared with 7.1% in the same month last year. For full-year 2023, EVs had 7.7% of the market versus 5.7% in 2022. | Automotive News ($)
High electric vehicle penetration is correlated with higher incomes and a higher ratio of single-family homes to apartments. Americans who have made the shift to electric vehicles so far tend to be richer and younger than average and more likely to live in urban or suburban areas. Many buyers say they are motivated by environmental concerns and some by interest in the latest cutting-edge technology. Many consumers, though, still have reservations about going electric. | The New York Times ($)
Electric vehicle (EV) sales have hit a speed bump, and carmakers around the world are slowing their investment in EVs amid concerns about profitability. But while Goldman Sachs analysts lower their near-term sales forecasts, falling battery prices are expected to eventually boost EV sales. Goldman Sachs Research lowered its forecast for growth in global battery demand in 2024 to 29% year-over-year, compared to its previous projection of 35%. Battery demand is estimated to have increased 31% in 2023. | Goldman Sachs
This year is shaping up to be a big one for hybrid cars, a segment once thought to be a relic of the pre-Tesla EV market. After demand for electric cars pulled back suddenly in the second half of last year, 2024 started with slowing sales of battery-powered cars. Fewer new-car shoppers are considering EVs for their next vehicle, according to J.D. Power, with shoppers citing a lack of access to charging infrastructure as a main reason for ruling out EVs. That's where hybrids are gaining an advantage. | Business Insider
Automakers and suppliers are adding capacity to build gasoline-electric hybrid and plug-in hybrid vehicles for the U.S. market, responding to increased consumer demand for technology that GM and other automakers once planned to phase out in favor of all-electric fleets. | Reuters ($)
Nissan is considering entering into a partnership with rival Honda to jointly develop electric vehicles. Japanese automakers have been slow to develop EVs, particularly in comparison to Chinese competitors such as BYD, causing them to lose ground in the Chinese market and leaving them vulnerable at home. | Bloomberg ($)
Can a Honda-Nissan Motor Corporation partnership succeed where others failed? The problem is that politics—both corporate and governmental—often get in the way. EVs and automotive software are usually considered the foundations of the industry’s future. That makes control of them highly sensitive. | The Wall Street Journal ($)
Porsche AG’s margins will be squeezed by the launch of new electric and hybrid models this year. | The Wall Street Journal ($)
Shares in Ferrari, the company Porsche wanted to be compared to in its 2022 initial public offering, have continued to race ever higher, widening the valuation gap between the two. | The Wall Street Journal ($)
Chinese electric vehicle maker BYD is running into challenges in its overseas expansion, finding that its rapid growth at home doesn’t necessarily translate into quick success in big foreign markets such as Europe. Executives at BYD, which overtook Tesla late last year as the top global seller of EVs, said the issues included weak market demand, too-high pricing, quality control, and internal tension over how quickly BYD should seek to grab market share. | The Wall Street Journal ($)
Analysts predict hundreds of "zombie factories" in China over the next decade. In 2023, China produced 17.7 million internal combustion engine cars, a 37% fall from the prior peak in 2017. Some believe as much as half of the industry’s installed capacity — about 25 million out of 50 million units of annual capacity — is not being used. | Financial Times ($)
Donald Trump said he would hit cars made in Mexico by Chinese companies with a 100% tariff, double the levy he has previously said he would put on automobiles made south of the U.S. border. | Automotive News ($)
If Congress or the executive branch were to decide to indiscriminately block imports from Mexico because they included products with foreign capital, it would be grounds for a formal complaint under the US-Mexico-Canada Agreement and likely compensatory tariffs. | Wards Auto
Ford Pro hopes selling connected-vehicle services such as driver monitoring systems to small and medium-sized fleet operators will help generate as much as $1.8 billion in annual profit within two years, projecting to earn 20% of its pre-tax profit from selling software and services. | Reuters ($)
GM, auto parts supplier Magna, and IT company Wipro are working together to create a sales platform to buy and sell automotive software. The joint venture, SDVerse, will link the buyers and sellers through a digital platform, where the software's features and attributes can be listed. | Reuters ($)
A newly formed coalition that includes online used-car retailer Carvana and the National Automobile Dealers Association (NADA) is working on a new initiative called eSTART (Electronic Secure Title and Registration Transformation) to modernize the vehicle title and registration process across all 50 states. So far, only 12 states allow electronic signatures on all vehicle title and registration documents. | Automotive News ($)
Autonomous vehicle technology startup Motional has secured a bridge loan that provides a temporary financial reprieve as the company searches for a longer-term source of funding. Automotive supplier Aptiv — the other half of the $4 billion joint venture with Hyundai that created Motional — said in January that it would no longer allocate capital toward the endeavor. That left Motional, which plans to launch a commercial robotaxi service in 2024, with enough capital runway to last through the end of Q1 2024. | Tech Crunch
Vista Equity Partners is seeking to hire investment banks for a U.S. initial public offering of Solera, a provider of software to the automotive and insurance industries. Vista acquired Solera for $6.5 billion in 2016. | Reuters ($)
The Biden Administration reached a major milestone in the decarbonization of transportation with the release of the National Zero-Emission Freight Corridor Strategy, which would accelerate the deployment of a world-class, zero-emission freight network across the United States by 2040. | Joint Office of Energy and Transportation
Last year, the average utilization of a US fast-charging station not operated by Tesla doubled — grew from 9% in January to 18% in December. Put another way: By the end of 2023, every fast-charging cord in the country was plugged in for an average of nearly five hours a day. | Bloomberg ($)
Mercedes-Benz is collaborating with Apptronik to begin piloting humanoid robots, planning to use robotics for automating some low-skill, physically challenging, manual labor. | Tech Crunch
EV startup Fisker has hired a financial adviser and a law firm to assist with a possible bankruptcy filing. | Automotive News ($)
The first Tesla Cybertruck on Cars & Bids. | Cars & Bids
EV values have fallen nearly every week since July 2022. Exponential Markets‘ newly released used EV value index reached a peak of 156.4 during the week of July 13, 2022, and since then has been steadily declining at a much faster rate than ICE counterparts. As of Feb. 28, the EV index was 87.9, roughly 10% below pre-pandemic levels. | Auto Finance News ($)
Adopting Vehicle-to-Grid (V2X) applications does not significantly increase battery degradation and can even reduce capacity loss compared to the conventional uncontrolled charging strategy if properly configured. | eTransportation
Procter & Gamble Japan seeks to shrink its fleet of delivery trucks by 30%, adopting an AI system that predicts product demand to boost logistics efficiency. P&G Japan currently uses about 180,000 trucks a year and a 30% cut would slash about 54,000 trucks. | NIKKEI Asia
Studies show that speed cameras reduce the percentage of speeding vehicles by 14% to 65% and can cut the number of serious injuries and fatal crashes by up to 44%. While these technologies have proven effective in reducing vehicle speeds and speed-related crashes, some communities may feel unfairly targeted or feel the cameras are just there to generate revenue. | Smart Cities Dive
From parking fees in Paris to registration fees in Washington D.C., forward-thinking cities are slapping heavy penalties on heavy vehicles. | Reasons to be Cheerful
A Bill to invest $205 billion into a new high-speed rail network across the US has been introduced to Congress by two Democrat lawmakers. The outline of the Bill emphasizes the intended impact on shifting US passenger transit from aviation to rail, by “prioritizing high-speed rail grants for regions not serviced by the aviation industry or where the government subsidizes aviation routes.” | Railway Technology
Since their invention, cars and automobility have killed 60–80 million people and injured at least 2 billion. Currently, 1 in 34 deaths are caused by automobility. Cars have exacerbated social inequities and damaged ecosystems in every global region, including in remote car-free places. | ScienceDirect ($)
Businesses hate bike lanes. Sure, they reduce pollution, slow the pace of climate change, cut traffic fatalities, and make cities healthier and more pleasant. But they also take away parking spaces, which makes it tougher for shoppers to load up their cars with piles of stuff. But research shows that making streets friendlier for bikes — and sidewalks friendlier for pedestrians — is actually good for business. | Business Insider
Last year was the deadliest year for cyclists in New York City since 1999. Most of the 30 cyclists who died in 2023 were riding electric bikes, which have proliferated on city streets in recent years. | The New York Times ($)
Metropolitan areas in the Southeast US have the worst transportation outcomes for reducing greenhouse emissions, according to a ranking that considers factors from vehicle emissions to transit and bike ridership. Coastal metro areas like Silicon Valley and New York City, by contrast, perform the best. | Bloomberg ($)
We have a new "Car of the Week": a 2020 McLaren Speedtail. | Bring A Trailer
Have a great week,
Steve Greenfield
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Notable & New
Automotive Ventures portfolio company Axion Ray has raised $17.5 million in a Series A round led by Bessemer Venture Partners with participation from RTX Ventures, Amplo and Inspired Capital. | Tech Crunch
Hear more about Axion Ray directly from CEO/Founder Daniel First | Axion Ray
WarrCloud has released the results of the Service Warranty Claims Process Study, which revealed that the current cost of processing auto warranty claims is 28% higher (as a percent of revenue) than it was in 2020. Additionally, processing a single warranty claim takes 47% more time compared to 2020. | Auto Success Online
Steve is looking forward to co-hosting the Pitch Tank session at ASOTU-CON with Kyle Mountsier! | ASOTU-CON
Automotive Ventures portfolio company RockED was featured in Automotive News this week. | Automotive News ($)
Check out the awesome new promotional video for Automotive Ventures portfolio company NuBrakes. | YouTube
Vero announced a partnership with Privacy4Cars to offer Identi-FI, a solution that protects against personal data abuses by providing peace-of-mind vehicle data deletion and ID theft recovery. The solution pairs Privacy4Cars' patented AutoCleared™ and Vehicle Privacy Report™ tools with Vero's 3-Generation Fully Managed Recovery (FMR). | PR Newswire
Steve is looking forward to joining Scott Case and Joe Overby on stage at AIS 2024! | Auto Intel Summit
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Companies to Watch
Glimpse generates a high-resolution map of a battery cell's internal structure using X-ray computed tomography (CT) scanning: producing a comprehensive assessment of a battery’s manufacturing quality. | Glimpse
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