Toyota Invests $1.5B in Startup Ecosystem - TechCrunch Mobility

TechCrunch Mobility: Assessing the Post-Tax Credit EV Landscape

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Over a month ago, I posed a question to our readership: what impact would the expiration of the $7,500 federal tax credit, effective September 30th, have on electric vehicle (EV) sales? The consensus from the poll indicated a widespread expectation of a significant decline in EV purchases.

Initial Observations and Sales Surges

It remains premature to draw definitive conclusions, as we are only a short time past the quarter's end. However, the approaching tax credit expiration demonstrably spurred a surge in sales for numerous automotive manufacturers, as consumers sought to finalize EV purchases before the incentive disappeared.

Tesla, experiencing a deceleration in its growth trajectory, has just announced its highest-ever quarterly delivery figures, totaling 497,099 vehicles. This represents a substantial 29% increase compared to the previous quarter.

Furthermore, this figure reflects approximately a 7% rise year-over-year, exceeding all prior single-quarter delivery records.

Record Sales Across the Industry

Beyond Tesla, other major players also reported exceptional quarterly EV sales. Ford Motor, General Motors, and Hyundai all achieved record-breaking numbers.

Rivian also experienced significant growth, with deliveries climbing to 13,201 vehicles. This is an increase from 10,661 in the second quarter and 8,640 in the first quarter of the year.

Navigating a Potential Slowdown

A critical question now facing automakers is how they will manage potential decreases in EV sales following the tax credit's removal. Rivian has already revised its 2025 projections downward, and others may well follow suit.

The central challenge for manufacturers lies in effectively managing inventory as the 2026 model year vehicles arrive. This must be achieved without compromising profit margins – or, in certain instances, exacerbating existing losses.

How automakers will balance inventory reduction with maintaining profitability in this new environment remains to be seen.

Canceled Clean Energy Initiatives

The Department of Energy made a decision to terminate funding for 321 clean energy projects, initially withholding specific details from both TechCrunch and the general public.

Fortunately, an anonymous source provided a comprehensive list of the awards rescinded by the previous administration, revealing significant insights into the cancellations.

Financial Impact of the Cancellations

The total value of the canceled awards reached $7.56 billion. California experienced the most substantial losses, amounting to $2.2 billion in withdrawn grants.

This included a $630 million program focused on grid modernization, which had the potential to serve as a national model. Other states significantly affected were Colorado, Illinois, Massachusetts, Minnesota, New York, and Oregon, each losing between $300 million and $600 million.

Political Distribution of Project Cancellations

A noticeable pattern emerged when examining the locations of the canceled projects. The majority were situated in states that had voted for Kamala Harris in the preceding presidential election.

This observation was also highlighted by Russell Vought, the former Office of Management and Budget chief, in a public statement. However, it wasn’t until further down the list that projects in traditionally conservative states appeared.

Factors Influencing Award Preservation

Despite the widespread cancellations, some awards in traditionally blue states were maintained. This may have been due to existing political relationships with the Trump administration or shared strategic objectives.

The actions taken by the Department of Energy raise concerns about the government’s dependability as a partner for businesses, particularly for emerging startups.

Contact Information

Do you have information to share? You can reach Kirsten Korosec via email at kirsten.korosec@techcrunch.com or through Signal at kkorosec.07.

Alternatively, contact Sean O’Kane at sean.okane@techcrunch.com.

Investment Highlights

While not traditionally recognized as a startup champion, Toyota is significantly altering this perception.

The automaker is dedicating $1.5 billion in new funding to support startups throughout their entire development – from initial concept to established enterprise.

To facilitate this initiative, Toyota Invention Partners Co. has been established as a strategic investment subsidiary, capitalized with approximately $670 million.

Furthermore, Woven Capital, Toyota’s venture arm focused on growth-stage companies, has launched a second fund totaling $800 million.

A discussion with George Kellerman, general partner at Woven Capital, revealed the strategic positioning of Toyota Invention Partners within the broader Toyota investment landscape. Further details can be found in a related article.

Notable Investment Rounds …

Einride, the Swedish firm known for its distinctive electric and autonomous pods, continues its progress. The company recently secured $100 million in funding from both new and existing investors, with EQT Ventures as its primary shareholder.

This funding round also included a strategic investment from quantum computing innovator, IonQ. It is important to note that this $100 million raise is considerably less than the $500 million obtained in previous rounds.

Electroflow, a startup focused on developing more affordable LFP batteries, has successfully raised $10 million in a seed round. Leading the investment were Union Square Ventures and Voyager, with additional participation from Fifty Years and Harpoon Ventures.

Flai, a San Francisco-based company applying AI to car dealerships, completed a $4.5 million seed round. First Round Capital, led by Liz Wessel, spearheaded the investment.

Additional investors included YC, RedBlue Capital, Liquid 2 Ventures (led by Joe Montana), and Innovation Endeavors.

A growing trend under the previous administration, the Department of Energy has acquired a 5% equity stake in Lithium Americas. A further 5% stake was taken in its Nevada mining joint venture with General Motors.

This acquisition occurred as part of a renegotiation of a $2.26 billion federal loan. Similar equity stakes were previously secured in Intel and MP Materials.

Following a cyberattack that disrupted production and threatened suppliers, the U.K. government is providing a £1.5 billion ($2 billion) loan guarantee to automotive manufacturer Jaguar Land Rover.

Wave Function Ventures, an early-stage deep tech fund, has finalized its inaugural fund with $15.1 million in capital. Senior reporter Sean O’Kane provides a profile of the fund’s founder, Jamie Gull, and his transition from aerospace engineering to venture capital.

Recent Developments and Industry Updates

An incident involving two Amazon Prime Air delivery drones occurred in Tolleson, Arizona, where they came into contact with a crane boom near the company’s sole commercial facility. Investigations are currently underway by federal authorities, and Amazon has resumed service following a brief suspension.

Autonomous Delivery and Robotics

DoorDash has been actively developing an autonomous delivery robot, named “Dot,” capable of navigating diverse terrains like roads, bike paths, and sidewalks. Max Zeff, a senior AI reporter, recently examined the project and interviewed Ashu Rege, the head of DoorDash’s autonomy division and a former leader at Zoox.

Electric Vehicle Incidents

Despite ongoing challenges, Faraday Future remains operational. Evidence of this came in the form of a fire involving one of their electric SUVs at their Los Angeles headquarters, resulting in an explosion and structural damage.

Regulatory and Economic Impacts

The founder of Whizz, an e-bike subscription service, has reported that the gig economy is being negatively impacted by the Trump administration’s enforcement actions in Chicago.

Autonomous Vehicle Testing and Approvals

Waymo has achieved a positive regulatory outcome in New York City, receiving an extension to their permit for testing autonomous vehicles.

Cybersecurity Breaches

WestJet, the second-largest airline in Canada, has announced a significant data breach affecting approximately 1.2 million passengers, with personal information compromised in a cyberattack.

Expansion of Self-Driving Vehicle Testing

Zoox is initiating street mapping in Washington, D.C., as a preparatory step for commencing testing of its self-driving vehicles within the city this year.

Looking Ahead to TechCrunch Disrupt 2025

TechCrunch Disrupt 2025 is rapidly approaching, with just weeks remaining until the event begins. It is hoped that attendees will take the opportunity to connect and say hello.

Several prominent figures from the transportation sector will be featured on stage. These include Tekedra Mawakana, co-CEO of Waymo, and Raquel Urtasun, founder and CEO of Waabi.

Key Transportation Leaders to Appear

Further enriching the lineup are Alex Kendall, co-founder and CEO of Wayve, and Chris Barman, CEO of Slate. Their participation promises insightful discussions on the future of mobility.

Prior to the event, we are highlighting some of the 200 companies participating in the Startup Battlefield.

Spotlight on Startup Battlefield Competitors

Among these is Hance, a startup focused on developing low energy-consuming, on-device processing solutions. Hance has already garnered attention from industry leader Intel.

The company’s innovative approach is attracting significant interest within the technology community. Their work represents a promising advancement in efficient computing.