Automotive Ventures Weekly Intel Report | Dec 26 2023
Intel Report: Mobility News
BY AUTOMOTIVE VENTURES | DEC 26 2023 | VIEW ONLINE
Happy Holidays from Automotive Ventures!
What We're Reading:
Automotive News' Top 10 stories of 2023:
1. UAW strike
2. EV pullback
3. EV tax credits
4. Cruise crisis
5. UAW ripple effect
6. Inventory rebound
7. Lithia is No. 1
8. Fain wins UAW presidency
9. Industry adopts Tesla EV charging standard
10. Hyundai-Amazon
| Automotive News ($)
When their new automotive shopping service launches later next year, Amazon said shoppers will be able to complete every step of the car-buying process through its website. Only new Hyundai vehicles will be available at the start. Consumers will have different financing options, but the company said it is still working through details. Eventually, Amazon wants to expand to trade-in vehicles and used cars. | The Wall Street Journal
Nearly half of Buick's U.S. dealerships left the brand this year after it offered buyouts for those who didn't want to invest in selling electric vehicles. Buick will end the year with about 1,000 dealerships nationwide, 47% fewer than at the start of 2023. Buick offered to buy out retailers who did not want to invest hundreds of thousands of dollars on tooling, equipment and training to prepare to sell and service EVs as the brand goes all-electric by the end of the decade. Buick had 1,958 U.S. franchises at the start of this year, according to Automotive News' annual dealer census. | Automotive News ($)
Three major Chinese EV companies are planning new factories in Mexico. Tesla rival BYD and fellow giants MG and Chery are in talks over new sites. U.S. awmakers on a select committee on China recently warned that stronger trade rules may be needed to prevent Chinese automakers from "gaining a backdoor to the US market" through its trading partners. | Business Insider
The Biden administration is discussing raising tariffs on Chinese electric vehicles in an attempt to bolster the U.S. clean-energy industry against cheaper Chinese exports. Chinese clean-energy exports are flooding global markets at low prices as China’s domestic economy slumps. U.S. officials worry that American companies, even with the protection of existing tariffs and new subsidies, won’t be able to compete with China’s production. | Wall Street Journal ($)
Glenn Mercer illustrates how Tesla's profit margins have fallen in line with other legacy automakers'. | Glenn Mercer
Prices for EVs are falling faster than for their combustion-engine cousins. Buyers are shunning them due to a lack of subsidies, a desire to wait for better technology and continued shortfalls in charging infrastructures. | Bloomberg ($)
Starting January 1, federal tax credit for electric vehicles — up to $7,500 for qualifying new EVs and up to $4,000 for qualifying used EVs — will be available when you buy the car, as opposed to something you have to claim when filing your taxes. Even better, more than 7,000 car dealers have already signed up to make sure they are able to offer that point-of-sale rebate — accounting for nearly half of all new car dealerships in the country. But there’s a catch: There may not be many cars that qualify for the full $7,500 credit come the new year, thanks to new restrictions going into effect regarding the components that make up these zero-emission vehicles. | TechCrunch
New rules reduce the number of electric cars that qualify for a federal tax credit. The credits, up to $7,500 a vehicle, have helped make electric cars more affordable, bringing the cost of some models below $30,000. Next year, for the first time, dealers will be able to give buyers the credit when they purchase a car, rather than telling them to claim it on their tax returns. But qualifying for the subsidy will become more difficult on Jan. 1 because of Biden administration rules intended to encourage automakers to manufacture vehicles and parts in North America, while bypassing China. Most automakers are still years away from breaking their dependence on China for batteries and essential materials like refined lithium. The stricter rules, which stem from the Inflation Reduction Act, throw up another impediment to electric vehicles. Sales of such cars and trucks are already growing less briskly than a year ago because of high interest rates and drivers’ anxiety about finding charging stations. | The New York Times ($)
Canada will require all new vehicle sales to be zero emission by 2035. To ensure supply, the government plans to give automakers incentives to produce more EVs and invest in charging stations. | Bloomberg ($)
The new "Presidio Perspectives" publication is a "must read" for anyone in the automotive space - the partnership with NCM Associates exposes a level of data/analytics that the industry needs. | The Presidio Group
The new "Presidio Perspectives" publication highlights how much more profit automotive dealers made per vehicle sold during COVID. The question is: how quickly will these margins drift back to pre-COVID levels? | The Presidio Group
Pretax profits for the average automotive dealership slipped by nearly a fifth and gross profit per new vehicle sold dropped by 26% through the first nine months of 2023 compared with the same time last year. | Automotive News ($)
Tesla’s fix for its Autopilot recall of more than 2 million vehicles is being called “insufficient” by Consumer Reports, who discovered it’s still possible to cover the cabin camera while using Autopilot, meaning drivers can neutralize one of the two main ways the car monitors if they are paying attention to the road. Additionally, Consumer Reports did not notice any differences when activating or using Autopilot’s flagship feature, Autosteer, outside of the controlled-access highways where Tesla says the software is designed to be used. | TechCrunch
If automation takes over too much of a task, the human becomes inattentive and may miss the critical part of the task they are needed for, especially if it’s time-sensitive like taking over to prevent a crash. It’s not a matter of being a bad driver or a bad person, no human can monitor a boring task forever without eventually becoming inattentive, leaving them unable to make a complex rescue maneuver on a second’s notice. | Yahoo
The Volkswagen Group is the latest automaker to announce it will adopt Tesla’s North American Charging Standard (NACS), marking one of the last major automakers to embrace what is now the de facto EV plug in the United States. The German giant said that future vehicles in its portfolio of brands — including Audi, Porsche and the group’s upstart EV play Scout Motors — will get the NACS charge port built-in starting in 2025.. | TechCrunch
Tens of thousands of customers told Tesla about a host of part failures on low-mileage cars. The automaker sought to blame drivers for vehicle "abuse," but Tesla documents show it had tracked the chronic "flaws" and "failures" for years. | Reuters ($)
When Porsche AG sold shares last year, the German sportscar maker hoped to follow in the gilded footsteps of Ferrari NV and achieve a valuation more in line with a luxury goods company rather than a metal-bashing automaker. Those dreams have begun to fray amid signs that Porsche is susceptible to an economic slowdown after all: The stock has declined around one-third since peaking in May, and now lies below the €82.50 ($90.75) offer price. An already sizable valuation gap to Ferrari has become a chasm. Ferrari caters to the super-rich — as opposed to the merely affluent like Porsche — and is seen by investors as a safer port in an economic storm. To recover, Porsche must prioritize exclusivity and high sticker prices. Doing so may require it to forgo potential sales. | Bloomberg ($)
One of the longest-running hyperloop startups is reportedly shutting its doors. Hyperloop One, once backed by Richard Branson’s Virgin Groups, will cease operations on December 31 according to Bloomberg News. It’s the latest stumble in the tech industry’s attempt to bring life to an idea Elon Musk first put forth in a white paper in 2013. And it comes after Hyperloop One raised and spent hundreds of millions of dollars since its founding in 2014. | Tech Crunch
With a new generation drone and more than 60 million flight hours under its belt, Zipline and partnering businesses are preparing to deploy drone technology across a handful of US cities next year, with plans to expand to 15 cities by 2025. Zipline’s latest generation drone promises near-instant delivery through an aircraft known as Platform 2. The fixed-wing flight never actually touches down during delivery but hovers 300 feet above ground in near silence. A small “droid” inside the aircraft lowers packages using a tether that allows for precise delivery onto porches, driveways, and sidewalks. The drone can travel within a 10-mile radius and carry up to 8 pounds. Zipline’s new system also doesn’t require a warehouse to launch the drones. Each docking station can be built into any business, allowing the process to be customized for each company. The setup is intended to make adoption seamless and rapid, with deliveries estimated to be 10 times as fast as cars and trucks. | Yahoo
A new report from LendingTree alleges that Tesla has the highest accident rate of any automotive brand. The report doesn't explain why Teslas crashed at a higher rate than any other brand. | The Drive
At least 18 EV and battery startups that went public in recent years were at risk of running out of cash by the end of 2024 as of their most recent filings, according to a The Wall Street Journal analysis. These companies attracted investors with bold promises to transform the industry and fight climate change with their electric trucks and SUVs. That was before they stumbled amid rising costs and manufacturing problems. The median stock among the companies that the Journal evaluated is down more than 80% from its market debut, and even further from its peak. The slide has wiped out tens of billions of dollars in market value in just a couple of years. | The Wall Street Journal ($)
Glenn Mercer helps us understand that the more things change, the more they stay the same (headlines from the Automotive News annual almanac from 1958). | Glenn Mercer
Bird has filed for Chapter 11 bankruptcy, capping off a turbulent year for the electric scooter company. Founded in 2017, Bird is one of numerous startups to introduce dockless micromobility platforms around the world, allowing city dwellers to pay for short-term access to electric scooters or bikes. The company went public in late 2021 via a SPAC merger, but in a crowded market built on questionable economics, its stock went into a perennial nosedive, with its market cap dropping from more than $2 billion at its NYSE debut to just $70 million 12 months later. This decline led the NYSE to issue a warning that Bird’s share price was too low. The company delisted from the NYSE in September. | TechCrunch
Sam Altman reflects on what he wishes someone had told him. Should be required reading for all of us as we transition into a new year. | Sam Altman
Hartsfield-Jackson Atlanta International Airport remained the world’s busiest airport in 2023, followed by Dubai and Haneda in Tokyo. | Bloomberg ($)
Countries across the world realize that now is the time when the future of the space economy will be decided and are acting to stake their place and build up their strength and position in the global space race. Huge technological developments have continued, with new sectors developing space solutions to help tackle some of humanity’s greatest problems on Earth. | TechCrunch
Carta shares intelligence on early-stage valuations. | Carta
One definition of a hypercar is a vehicle that nobody needs. Most have theoretical top speeds approaching or exceeding 300 MPH, which is much faster than Formula 1 cars, whose top speeds are about 220 MPH. Many hypercars also accelerate faster than Formula 1 cars. Except for Germany’s autobahn, which has no speed limit, there are few public highways where one can use more than a fraction of a hypercar’s power. | The New Yorker
Have a great week,
Steve Greenfield
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Notable & New
Three predictions for automotive dealership service departments, courtesy of Jim Roche from Automotive Ventures portfolio company WarrCloud. | Automotive News
Ahead of the Autonomous e-Mobility Forum 2024 in Qatar, Steve wrote a piece for the Gulf Times outlining the current state of Mobility and the challenges that still need to be solved. | The Gulf Times
