The Mobility News That Matters

BY AUTOMOTIVE VENTURES | May 6?2024?| VIEW ONLINE ??

Automotive Ventures tures portfolio company WarrCloud was recognized by the Automotive News ' PacePilot Awards as an "Innovation to Watch"! Congratulations to the entire WarrCloud team. This is tremendous validation of the incredible company that you're building! | Automotive News ($)

What We're Reading

??? Automotive

Toyota Motor Corporation sure seems to be in the right place at the right time. What do they say about luck being where opportunity meets preparedness? Toyota enjoyed another surge in hybrid deliveries, posting a double-digit increase in U.S. sales in April for the sixth straight month. Volume rose 14% to 211,818, with electrified vehicle sales jumping 56% to 77,228. Sales increased 15% at the Toyota division and 4.8% at Lexus. The Toyota division is starting May with a 23-day supply of vehicles while Lexus has a 41-day supply.?| Automotive News?($)

Drunk driving deaths in the U.S. have risen to levels not seen in nearly two decades, federal data show, a major setback to long-running road safety efforts. At the same time, arrests for driving under the influence have plummeted, as police grapple with challenges like hiring woes and heightened concern around traffic stops. | The Wall Street Journal ($)

Even with a stock exhaust, you and your performance car of choice could have the privilege of paying the City of New York $800 for a noise violation. Thanks to a new noise violation pilot program aimed at curbing loud exhausts and excessive honking with smart cameras and microphones, the potential for punitive punishment is on the rise for enthusiasts across all five boroughs. The conjoined camera and microphone operate much like speed or red light cameras, snapping pictures of the offender's license plate and issuing a fine to the registered owner. Unlike speed light cameras, however, the locations of the noise-monitoring cameras have not been initially disclosed to the general public. Eighty-five decibels is the threshold for receiving a fine, which starts at $800 for a first offense and rises to $2,500 for repeat offenders.?| Road & Track

Vista Equity Partners artners-backed automotive data and software services provider Solera Holdings, LLC. has filed confidentially for an initial public offering. Its IPO could launch as soon as July and raise more than $1 billion. Solera serves more than 300,000 customers. In 2016, Vista led a group of investors including a unit of Koch that took Solera private in a deal that valued the company at about $6.5 billion. Vista entered negotiations in 2021 to merge Solera, as well as its companies DealerSocket and Omnitracs , with a special purpose acquisition company in a $15 billion transaction. The talks were halted, and Solera subsequently acquired DealerSocket and Omnitracs.?| Bloomberg ($)

S&P Global is weighing options for its mobility business, which includes CARFAX , automotiveMastermind Inc. , and the historic Rl Polk & Company Limited business, including a full sale. Private equity firms in recent months have expressed interest in the unit, which is not viewed as a core part of S&P’s strategy. The unit could be valued at more than $12 billion. Revenue from S&P’s mobility segment grew 8% to $386 million in the most recent quarter from a year earlier, and totalled $1.4 billion in 2023. The unit made adjusted operating profit of $576 million in 2023, up 9% from the year before.?| Reuters ($)

Stellantis CEO Carlos Tavares warned that tampering with the US-Mexico trade agreement risked making pick-up trucks unaffordable for Americans, after a suggestion from Donald Trump that he could curtail imports across the southern border if re-elected.?Trump hinted he would prevent cars built by Chinese companies coming in from Mexico if he became president again, in response to China’s 比亚迪 planning a new electric vehicle plant south of the US border. Trump has separately suggested imposing tariffs of 50-100 percent on Chinese models coming into the US.?Tavares said breaking the US-Mexico-Canada Agreement would be a “lose-lose” scenario. | Financial Times?($)

通用汽车 announced a year ago that it was ditching support for 苹果 ’s CarPlay infotainment hub in its new EVs so it could bolster GM’s in-house Ultifi platform. It was a buckle-your-seatbelt move.?For tens if not hundreds of millions of drivers, CarPlay has become the default home screen of the center console, an iPhone-enabled grid of apps available in vehicles ranging from Fords to Ferraris. According to Apple, as of 2022, 79% of U.S. car buyers would only consider purchasing cars that were CarPlay compatible.?| Bloomberg ($)

One of the technologies that was supposed to sustain Tesla 's lead for the next generation of electric vehicles is the novel new production method of "gigacasting." It's expected to make producing car bodies faster, simpler, and above all, cheaper. But that doesn't seem to be panning out perfectly, as Tesla is reportedly abandoning its plans to cast cars' entire underbodies. Reuters reports Tesla has abandoned plans to cast complete floorpans for future vehicles.?| The Drive

The expanding size of automobiles has deepened a slew of national problems. Take road safety: Unlike peer nations, the U.S. has endured a steep rise in traffic deaths, with fatalities among pedestrians and cyclists, who are at elevated risk in a crash with a huge car, recently hitting 40-year highs. Vehicle occupants face danger as well. A 2019 study concluded that compared to a smaller vehicle, an SUV or a pickup colliding with a smaller car was 28% and 159%, respectively, more likely to kill that car’s driver. Car bloat also threatens the planet. Because heavier vehicles require more energy to move, they tend to gulp rather than sip the gasoline or electricity that powers them, increasing greenhouse gas emissions. Extra weight also accelerates the erosion of roadways and tires, straining highway maintenance budgets and releasing microplastics that damage ecosystems.?| Vox

Drivers across the U.S. are struggling with the growing cost of car insurance, which rose 2.6% in March from February and 22.2% from a year earlier. The cost of car insurance has surged by more than 50% since the beginning of 2021, before inflation started the steep climb that led to the peaks reached in summer 2022. In the last year alone insurance costs shot up by 26%, with U.S. car owners now paying a national average annual premium of $2,543 for full coverage. That's the equivalent of 3.4% of their income.?| Newsweek ?

???Electric Vehicles (EVs)

Despite near-term challenges in some markets, based on today's policy settings, almost 1 in 3 cars on the roads in China by 2030 is set to be electric, and almost 1 in 5 in both the United States and the European Union.?| IEA

For Q1 2024, Hybrid registrations in California rose 53% while full EVs gained just 2.8%, and Tesla's registrations fell year over year. Tesla registrations have fallen two quarters in a row.?| Automotive News?($)

As Fisker teeters on the verge of bankruptcy, no one is quite sure what will happen to the roughly 6,000 vehicles already delivered to customers since June 2023. If Fisker folds — as it warned is possible for the third time on April 16 — it will be among the first EV startups of the modern age to go belly-up, testing the longevity of a fleet of vehicles dependent on proprietary software and technology to keep them running.?| Business Insider

As Fisker searches for a lifeline, owners of its vehicles are desperately asking what will happen if they miss out on future tech updates and service needs. Some Fisker owners who purchased their vehicles outright may now be wishing they had leased instead. The vast majority of EV owners don't have to worry about the maker of their vehicles imminently going out of business. But Fisker's issues do highlight some of the benefits of leasing over buying, particularly in the EV market, which features limited used-market pricing data and few insights into long-term battery degradation. | Business Insider

Tesla leasing penetration had dropped to almost zero. But it looks like Tesla is back with strong lease incentives on the Model 3.?| Auto Finance News?($)

The European Union needs to install almost eight times more electric vehicle charging points per year than it did in 2023 to meet forecast demand, according to European autos group ACEA. There were just over 150,000 public charging points installed last year across the bloc, said ACEA, for a total of more than 630,000. That is far short of the roughly 410,000 needed annually just for the European Commission to reach its target of 3.5 million by 2030. However, demand has quickly outpaced that target, with EU electric car sales growing three times faster than charging point installations between 2017 and 2023.?| Reuters ($)

Elon Musk's abrupt decision to lay off employees who ran Tesla's electric vehicle charging business blindsided automakers gearing up to equip new EVs for customers to use the Tesla Supercharger network. For now, General Motors, Ford, and other automakers that struck deals last year to give customers access to the network said they are not changing their plans.?| Reuters ($)

General Motors' luxury brand Cadillac will likely not have an exclusively all-electric portfolio of vehicles by the end of the decade, after all. Global Cadillac Vice President John Roth said the brand will offer a full line of electric vehicles by 2030 but it will likely continue selling gasoline-powered vehicles for some time, too. The latest statements contradict what Cadillac leaders have publicly said in the past.?| Detroit Free Press

Stellantis is willing to deliver internal-combustion-engine powertrain versions of any of its battery-electric vehicles if there is consumer demand. Vehicles that are initially launched as a BEV may be released later as a gas hybrid or even a pure ICE powertrain model if there is a clear demand for that in the market. Stellantis' product strategy to build the new models on multi-energy platforms allow the automaker to react to market trends.?The automaker wants to tread the line between providing what the consumer wants and sending a clear message to the broader market that it is committed to energy transition, pointing out that of Stellantis' 25 new-vehicle launches this year, 18 will start out as BEVs. | Wards Auto ?

????? China

U.S. and European politicians have raised alarms that their domestic auto industries could be destroyed by a wave of cheap Chinese electric vehicles. But so far, China's top EV maker, BYD, has dramatically hiked export prices compared to what it charges at home rather than undercut foreign rivals. The goal: to rake in hefty profit margins the automaker cannot get in China amid fierce competition. In some foreign showrooms, BYD charges more than double — sometimes nearly triple — the price it gets for three key models in China. | Automotive News ($)

It was long thought that wealthy countries would lead the electric vehicle revolution. Oil-rich Norway was often, ironically, held up as a beacon of what the transition to EVs could look like. In the United States, Teslas and pricey electric BMWs have become a status symbol. But in parts of the Global South, EV uptake is surging and, in some countries, keeping pace with that of the United States.?The silver bullet: cheap, high-quality Chinese EVs. Affordable EVs — many of them made by Chinese auto giant BYD — can be seen on roads from Brazil to Colombia to Vietnam.?But cheap, climate-friendly cars have presented a paradox for President Biden. A new change in U.S. tax policy allows a hefty credit on certain electric vehicles to be taken off the car’s price upfront rather than during tax season. But the cars must undergo final assembly in North America — ruling out Chinese vehicles, which are subject to an additional 25% tariff on top of the 2.5% tariff on imported cars, a Trump-era imposition that the Biden administration maintained. | The Washington Post ($)

Despite a brutal price year, China’s large automakers are in surprisingly good shape.?Even with enormous overcapacity, the largest Chinese automakers still have big cash cushions. And gross margins at BYD, China’s market leader, actually rose last year. That means the global EV price war will continue—and probably get worse.?| The Wall Street Journal ($)

Chinese electric vehicle (EV) maker BYD posted its weakest quarterly profit growth since 2022 on Monday while its revenue growth slowed to the lowest level in nearly four years, hit by slowing EV demand and a bruising price war in the world's largest auto market. The biggest Chinese rival to Tesla handed back the world's top EV seller title to the U.S. giant in the first quarter after winning it last year. With a brand portfolio at different price points, BYD has ramped up efforts to move upmarket while doubling down on discounts to vie for cautious consumers amid a sputtering economic recovery.?| Reuters ($) ?

???Autonomy / Robotics

Tesla Chief Executive Elon Musk has made clear that he is making robotaxis a centerpiece of his long-term strategy. The hard part will come next. This summer Tesla plans to show a future model—which is expected to have no steering wheel and pedals—that the automaker can deploy in its own, Uber-like ride-hailing service. Musk last week floated the idea of allowing owners to rent out their robotic Teslas, comparing it to Airbnb.?The strategy amounts to a sizable bet on a yet-to-be-built car underpinned by technology that remains under development. A combination of regulatory ambiguity and technology hurdles make widespread deployment of driverless taxis any time soon a long shot. | The Wall Street Journal ($)

Glenn Mercer scores the current state of Tesla's "full-self-driving" functionality. | Glenn Mercer

Hyundai has agreed to spend nearly $1 billion on Motional, an investment that will give the automaker a majority stake while providing the self-driving startup with the necessary capital to keep operating. The Korean automaker invested $475 million directly into Motional as part of a broader deal that includes buying out joint venture partner Aptiv . As part of the deal, Hyundai will spend another $448 million to buy 11% of Aptiv’s common equity interest in Motional. Motional started as Boston-based autonomous vehicle startup nuTonomy in 2013, before being acquired by 德尔福 for $450 million. Delphi would later split it’s business with the Aptiv unit absorbing nuTonomy. The entity became Motional under a $4 billion Hyundai-Aptiv joint venture in 2019. | Tech Crunch

The American war machine depends on rare-earth magnets for everything from F-35 jet fighters, missile-guidance systems, Predator drones and nuclear submarines. The problem: China makes most of the world’s rare-earth magnets, with 92% of the global market share. | The Wall Street Journal ($)

Austria called for fresh efforts to regulate the use of artificial intelligence in weapons systems that could create so-called 'killer robots', as it hosted a conference aimed at reviving largely stalled discussions on the issue. With AI technology advancing rapidly, weapons systems that could kill without human intervention are coming ever closer, posing ethical and legal challenges that most countries say need addressing soon.?| Reuters ($)

Federal safety standards will require new cars to have automatic emergency brakes that can bring them to a complete stop without crashing or hitting pedestrians even at high speeds, saving hundreds of lives a year. Automakers will have until the fall of 2029 to comply, but officials at the National Highway Traffic Safety Administration NHTSA said they expect the industry to be able to deploy the systems ahead of the deadline.?| The Washington Post?($)

NHTSA is struggling to keep pace with risks introduced on American highways by Tesla’s driver-assistance system and similar technology being advertised to consumers by other car manufacturers, from Ford to Mercedes-Benz. Some say NHTSA has taken an overly deferential approach to industry in an era of profound automotive innovation, one that promises to make driving easier but creates new risks on the road. Nearly a decade since Tesla first rolled out Autopilot, the agency has yet to set basic standards for self-driving technology. | The Washington Post ($)

李尔公司 , a global leader in automotive seating and electronics systems, has entered into a definitive agreement to acquire WIP Industrial Automation, a privately held systems integrator based in Spain that specializes in advanced automation solutions for industrial applications. This is a key acquisition of an automation business as Lear looks to replace labor-intensive operations with robots. Automation will protect the company from wage inflation and geopolitical risks while allowing it to streamline manufacturing and improve throughput and safety. Lear’s plan is to automate everything from removing wrinkles in seats to installing them in cars. | PR Newswire ?

??? Climate

Recently, nuclear energy has been in the spotlight for its key advantages over fossil fuels: it’s practically carbon-free and reliable for continuous power, preventing outages. 高盛 Research recently outlined nuclear as a possible solution to the mounting problem of energy-guzzling AI/data centers. Besides waste- and fallout-related fears, major drawbacks of nuclear are the vast time and budget it requires — in fact, with Vogtle as a cautionary tale, the industry has been shelving new reactor proposals in favor of revamping so-far-unproven smaller-scale designs. The question is now: does the potential long-term cost of climate change outweigh real-time, individual costs for infrastructure that could help to solve it? | Sherwood

Former President Donald J. Trump has vowed to “cancel” President Biden’s policies for cutting pollution from fossil-fuel-burning power plants, “terminate” efforts to encourage electric vehicles, and “develop the liquid gold that is right under our feet” by promoting oil and gas. Those changes and others that Mr. Trump has promised, if he were to win the presidency again, represent a 180-degree shift from Mr. Biden’s climate agenda. | The New York Times ($)

Although stores of critical minerals required for EV batteries are actually abundant in the United States, there are only a handful of operational mines in the US. Meanwhile, proposed mines are finding it nearly impossible to compete on price with the abundant and cheap supply of materials flooding the market from China. This puts the United States in a kind of Catch-22, which only innovation or firm government action may be able to resolve. However, such efforts will take years to fully implement, which only makes greater attention and directed technological progress toward prospecting, extracting, and processing critical minerals all the more urgent. | Contrary ?

?? Aviation

The UK government confirmed its 10% sustainable aviation fuel (SAF) target by 2030 for fuels used in flights taking off in the UK, in a move that paves the way for a major increase in the country's SAF production capacity. Under the new mandate, SAF will make up 2% of total UK jet fuel demand in 2025, and then increase to 10% in 2030 and then to 22% in 2040. From 2040, the obligation will remain at 22% until there is greater certainty regarding SAF supply.?| S&P Global ?

????Car of the Week

We have a new "Car of the Week": a 1995 McLaren F1 with only 254 miles on the odometer. Only 106 F1s were ever made. | Sotheby's

Have a great week,

Steve Greenfield