Automotive Ventures Weekly Intel Report | Feb 12 2024
Intel Report: Mobility News
BY AUTOMOTIVE VENTURES | FEB 12 2024 | VIEW ONLINE
What We're Reading
Electric vehicles (EVs) have been piling up. Sales have leveled off at around 9% of the new car market, and even dipped down at the start of the year. Hertz is selling off a bunch of EVs, citing low demand for them. Ford is slashing production of the F-150 Lightning. GM cut its near-term investment in EVs and is now bringing back plug-in hybrids, which run on electricity and gasoline. Even Tesla, the all-electric juggernaut that has shaped the rise of EVs in the U.S., warned investors that it's in between "growth waves" and has a quieter year ahead. | NPR
Ford's EV division lost $4.7 billion last year, and the company sees the losses deepening to between $5 billion and $5.5 billion this year. If Ford weren’t selling its Mustang Mach-E and F-150 Lightning models and investing in a new generation of products to replace them, its adjusted operating profit would be 50% higher. | The Wall Street Journal ($)
Ford is refocusing its electric vehicle strategy and abandoning near-term profit expectations as losses from its Model e business unit pile up. The automaker expects to lose $5 billion to $5.5 billion on EVs this year — up to 15% more than in 2023 — and no longer thinks it can reach a goal of 8% margins on EVs by 2026. | Automotive News ($)
Ford plans to cut $2 billion, targeting a wide range of operations, ranging from materials and freight to manufacturing. The cuts will even affect car design and little-used technologies that real-time data show aren’t all that popular among drivers. | Bloomberg ($)
Ford is working on a skunkworks project to develop a low-cost electric vehicle. The project is about two years old and based in Irvine, California. The project is working on a third-generation EV that is likely focused on reducing costs, smaller EVs and efficiency, including the battery. | TechCrunch
South Korean energy group SK Innovation forecasted slowing growth in global electric vehicle (EV) demand, joining an increasing number of automakers and suppliers expressing concern about the market for EVs. | Reuters ($)
Used EV prices fell 30% on average last year, and "most of that is attributed to price adjustments on the new side. We saw it almost live when Tesla cut prices on their vehicles," said Alex Yurchenko, the chief data science officer at Black Book. As automakers adjust new EV prices and government incentives become available, "we expect the EV prices to continue to decline at a higher rate than the overall market," he said. | Automotive News ($)
President Biden’s 2022 climate law is driving faster-than-expected growth in electric vehicle (EV) purchases and clean-energy projects, doubling the projected cost to taxpayers while potentially accelerating emissions reductions. The Congressional Budget Office bumped up its projection of the law’s climate tax credits through fiscal year 2033 by $428 billion, putting an official stamp on what public and private analysts had been saying for the past year. The law, known as the Inflation Reduction Act, is expected to spur up to $3 trillion in total public and private investment over the next decade.| The Wall Street Journal ($)
Despite not having any electric vehicles for sale in North America, Mazda has joined the rest of the major automakers in adopting Tesla's North American Charging Standard (NACS). The only automaker left to make the switch is Stellantis. | Electrify News
Apple greatly increased the amount of autonomous vehicle testing it did last year, almost quadrupling the number of miles it tested on public roads compared to 2022 and jumping 2021’s total by a factor of more than 30. | Wired
Parisians have voted to triple parking costs for sports utility vehicles (SUVs), as the city aims to tackle air pollution and climate breakdown by targeting rich drivers in heavy, large and polluting cars. | The Guardian
Toyota shares hit a record high after its earnings upgrade, with rivals Honda and Nissan also posting gains on expectations their solid hybrid lineups may benefit from cooling interest in electric vehicles. Weakening momentum for battery-powered vehicles has led many overseas automakers to scale back roll-out plans for EVs or cut production targets as lower government subsidies and high interest rates make EV purchases harder for customers. | Reuters ($)
Toyota's market capitalization topped the symbolic ¥50 trillion ($354.65 billion) mark on Feb. 6 after the automaker's stellar quarterly financial report. It was the first time any Japanese company had exceeded the milestone. | Automotive News ($)
Tesla's sales growth has slowed as the automaker spends toward the next growth wave. | Bloomberg ($)
Tesla continues to cash in on other carmakers needing help to meet emissions standards, keeping up a lucrative business the company thought would fade away. The Elon Musk-led manufacturer generated $1.79 billion in regulatory credit revenue last year, an annual filing showed last week. That brought the cumulative total Tesla has raked in since 2009 to almost $9 billion. | Bloomberg ($)
What makes Tesla special in a world where Elon Musk doesn’t see climate change as a near-term risk and is wavering on his commitment to pursue AI at Tesla? | The Wall Street Journal ($)
Hyundai is planning to list its Indian unit to raise at least $3 billion in what would be the country's biggest IPO, as the South Korean firm doubles down in the key growth market ahead of a widely expected entry by Tesla. | Reuters ($)
The electric vehicle charging network formed by seven major automakers revealed its company name: IONNA. The IONNA network, unveiled in July, is a joint venture between BMW, General Motors, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis. It plans to install at least 30,000 chargers beginning in the U.S. this year. | Automotive News ($)
Arrival announced in a regulatory filing that its U.K. division is entering administration, the country’s version of bankruptcy. The troubled company, which went public in 2021 via a merger with a special purpose acquisition company, said it’s looking to sell its U.K. assets and intellectual property to pay back the lenders that helped it stay afloat. | TechCrunch
Dynamic pricing, rates that rise or fall based on real-time demand and other factors, may soon transform the unprofitable EV charging industry. Combined net losses for three of the biggest charging companies — ChargePoint, EVgo and Blink Charging — exceeded $600 million last year. The companies have already implemented some form of dynamic pricing. But prices that surge with demand could hurt EV drivers' experience when public charging is already a significant pain point. | Automotive News ($)
Automation has become more important than ever for automakers and their suppliers. In addition to a persistent worker shortage, historic pay increases in the UAW-Detroit 3 contracts are trickling through the supply chain, saddling every manufacturer with higher labor costs. | Automotive News ($)
eBike manufacturer Cowboy is rolling out a new repairs and service program designed to give its e-bike riders more ways to keep their wheels on the road. The company will begin offering a new on-demand service program for basic maintenance, customization and repairs, delivered at a rider’s home. | TechCrunch
Uber hit a major milestone: The ride-hailing and delivery app reported a full-year profit (driven by operating income) as a public company. And it seems that profit momentum is expected to continue into the first quarter. Uber has hit an annual profit before, but it was largely due to its investments. In 2023, the company’s profits came from its operations. | Uber
Our new "Car of the Week": A 1966 Shelby 427 S/C Cobra. | Broad Arrow Auctions
Have a great week,
Steve Greenfield
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Notable & New
Steve caught up with Jim Fitzpatrick from CBT News at the National Automobile Dealers Association (NADA) conference in Las Vegas. | CBT News ($)
Congratulations to Chris Loar and the Wrapmate team for their $16 million financing round. This is a huge validation of the growth path that you're on, and Automotive Ventures is proud to be on this journey with you. | Press Release
Scott Case from Automotive Ventures portfolio company Recurrent is featured Automotive News article on how the company helps auto dealers understand the condition and value of used EVs. Thanks to C.J. Moore for the story! | Automotive News ($)
On this week's Automotive Ventures "Future of Automotive" segment on CBT News, we explore the increasing cost of vehicle insurance, specific to EVs. | CBT News ($)
Great to see Automotive Ventures Operating Partner Chip Perry quoted in Automotive News. Thanks for the coverage, Mark Hollmer! | Automotive News ($)
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Companies to Watch
PaperShell compresses paper back into a more resistant version of wood. | PaperShell
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