Mobileye IPO & Elon Musk's Impact on Tesla Autopilot - The Station

The Station: A Weekly Transportation Newsletter

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Recent Developments in the Transportation Sector

Typically, this time of year sees a decrease in industry news. However, this week has proven to be quite the opposite, with several significant stories emerging.

Tesla and Autopilot Under Scrutiny

A recent investigative report by the New York Times has brought Tesla, and Elon Musk’s role in the development of the Autopilot driver-assistance system, under intense scrutiny. The article revealed several concerning details.

Notably, the report highlighted that the company’s 2016 demonstration video claiming “fully driverless” capabilities was, in fact, staged. Further reporting from the NYT indicated that Tesla owners are currently able to play video games while operating their vehicles.

Regulatory Response and Concerns

Although the National Highway Traffic Safety Administration (NHTSA) has stated it is investigating the in-vehicle gaming feature, skepticism remains regarding potential repercussions. A persistent question arises with each advancement pushing safety limits: will regulators finally intervene?

This question continues to lack a definitive answer.

Tesla Camera Replacements and Mercedes Recall

CNBC reported that Tesla is currently replacing repeater cameras in the front fenders of numerous Model S, X, and 3 vehicles manufactured in Fremont, California. As of late November, a voluntary recall had not been initiated, according to internal service documentation.

In contrast, Mercedes proactively issued a voluntary recall – implemented through a software update – for the EQS model. This recall addressed the issue of its large infotainment screens enabling drivers to watch television and access the internet while driving.

Stay Connected

Feel free to reach out with your thoughts, feedback, or insights. You can email me at kirsten.korosec@techcrunch.com. Alternatively, connect with me directly on Twitter – @kirstenkorosec.

The Rise of Micromobility

The question arises whether we are nearing a critical juncture in the ongoing micromobility revolution. Recent research from McKinsey indicates a substantial global interest, with approximately 70% of individuals expressing a willingness to commute via bicycle, moped, or e-scooter if viable options were available.

The appeal is clear: a 3,000-pound automobile is often unnecessary for transporting a 150-pound person. However, facilitating wider adoption requires enhancing both the ease and safety of utilizing these smaller transportation modes.

Currently, U.S. legislators are considering a 30% tax credit applicable to purchases of new e-bikes, up to a maximum expenditure of $3,000. This translates to a potential credit of $900, significantly improving the affordability of e-bikes for a broader consumer base.

Analysis from the NPD Group, a firm specializing in retail sales tracking, reveals a bifurcated market. Approximately 60% of bicycle sales in the past year fell into either the under $500 or over $3,500 price categories. Notably, the most rapid growth is occurring within the $1,500 to $2,000 price range.

While incentives are beneficial, infrastructural development is equally crucial. It is therefore important to acknowledge cities that are making positive strides. Milan, for instance, is dedicating €250 million to its Urban Biking Strategy, which will establish dedicated, high-speed cycle lanes and improve integration with public transportation networks.

Jersey City, New Jersey, is collaborating with Oonee to develop a comprehensive network of secure bicycle parking solutions. This initiative includes 30 protected lockers strategically positioned near bus stops, providing storage for bicycles and scooters, and simultaneously functioning as transit shelters with covered seating.

For locations lacking optimal road conditions for safe cycling, innovative companies are addressing this challenge. Terranet AB, a software firm, has announced plans to manufacture BlincBike, a collision warning system for e-bikes utilizing camera technology. Pre-orders are anticipated to begin in July.

Several factors suggest a strong potential for accelerated growth in micromobility adoption. Perhaps influenced by the New Zealand summer or the approaching holidays, a sense of optimism prevails.

— Rebecca Bellan

Recent Investment and IPO News

The final months of the year are shaping up to be significant for initial public offerings, or at least the planning stages thereof. Notably, Intel has announced its intention to publicly list Mobileye, its subsidiary specializing in advanced driver-assistance systems and autonomous driving technology, which was originally acquired for $15 billion over four years ago.

This separation of Mobileye into an independent, publicly traded entity is projected to enhance shareholder value for Intel. According to a source cited by TechCrunch, the IPO process is anticipated to span approximately six months, suggesting that the preliminary IPO roadshow has not yet commenced.

Despite the public listing, Intel will retain majority ownership of Mobileye, and both organizations will maintain a strategic partnership, continuing collaborative efforts on various projects.

Further noteworthy transactions include…

BMW i Ventures spearheaded the seed funding round for Rapid Liquid Print, a company pioneering 3D printing technology for elastomers. This technology enables the production of large-scale, high-resolution, flexible products utilizing industrial materials like soft rubber, silicone, and foams.

Candela, a firm focused on the development of electric hydrofoiling boats, secured $24 million in funding to expedite the production of its current smaller models and a larger, commercially-oriented vessel.

Carma, an Australian online used car marketplace, successfully raised AUD $28 million (equivalent to $20 million USD) in a seed funding round led by Tiger Global. Operating in a stealth mode for the past nine months, Carma utilized the funds to build its executive team, create its online platform, and establish its initial inspection and refurbishment center in Sydney.

Flink, a Berlin-based startup specializing in rapid delivery of groceries and essential goods – aiming for delivery times under 10 minutes – garnered $750 million in a Series B funding round, with DoorDash as the lead investor. This investment values Flink at $2.85 billion post-money.

Hitachi is currently evaluating strategies to optimize its business structure, potentially including the divestiture of its minority stake in a transportation division, as reported by Bloomberg.

Ola, a prominent ride-hailing company based in India, secured $139 million in funding at a valuation of approximately $7.3 billion, as disclosed in a regulatory filing, in preparation for its planned initial public offering early in the coming year. Edelweiss, a major financial institution headquartered in Mumbai, led the latest investment, with participation from IIFL, Siddhant Partners, Tejal Merchantile, and Hero Enterprise.

Robotic Research, a developer of self-driving technologies with a two-decade history of creating autonomous vehicles for both on-road and off-road applications for the Department of Defense, completed a $228 million Series A funding round. The round was led by SoftBank Vision Fund 2 and Enlightenment Capital, with additional investment from Crescent Cove Advisors, Henry Crown and Company, and Luminar, a lidar technology company.

Serve Robotics, an autonomous sidewalk delivery company originating as a spin-off from Uber’s Postmates in March, has expanded its seed funding round to $13 million. Uber participated as a strategic investor, alongside DX Ventures (backed by Delivery Hero), 7-Ventures (7-Eleven’s venture arm), and Wavemaker Labs, a food automation-focused venture studio from Wavemaker Partners.

Solid Power, a developer of solid-state battery technology supported by Ford and BMW, successfully launched on the public market, experiencing a significant increase in its stock price during its first day of trading.

Uber is reportedly engaged in discussions with the management team of its Middle East subsidiary, Careem, to facilitate the inclusion of external investors into the business, according to Reuters.

Elon Musk's Critique of Federal Spending Bills

During an extensive discussion at The Wall Street Journal’s CEO Council Summit, Tesla CEO Elon Musk voiced strong opposition to both the $1.2 trillion infrastructure bill and the approximately $2 trillion budget reconciliation bill, despite their inclusion of measures designed to encourage electric vehicle adoption.

Regarding the infrastructure bill, Musk stated, “It would perhaps be preferable if this legislation were not enacted.” He further expressed that Tesla does not require the $7,500 tax credit outlined in the budget reconciliation bill.

Currently, Tesla vehicles are ineligible for this credit due to the company exceeding the 200,000 EV sales limit; however, the proposed bill aims to eliminate this manufacturer cap.

Musk’s direct assessment was, “In all honesty, I would advocate for the complete cancellation of this bill. Its passage should be avoided.”

He did concede the need for improvements to the nation’s transportation infrastructure, including airports and highways.

Musk suggested exploring innovative traffic management solutions, such as the construction of tunnels or the implementation of double-decked freeways.

Acknowledging the benefits both Tesla and SpaceX have received from public funding, he also questioned the broader role of government.

He proposed that government should function as an impartial referee, “but not as an active participant in the game itself.”

“Government intervention should be minimized to avoid hindering advancement and innovation,” he added.

These statements, delivered from Tesla’s recently opened facility in Austin, align with a previously established pattern of disagreement.

The relationship between Musk and President Joe Biden has been characterized by friction.

Musk has been particularly critical of a provision within Biden’s budget proposal that would grant an additional $4,500 tax credit to EVs assembled in the U.S. with union labor.

On October 31st, he posted on social media, characterizing Biden as a “UAW [sock emoji] puppet.” Earlier, he remarked on the “strange” exclusion of Tesla from a White House EV event, while executives from GM, Ford, and Stellantis were invited.

Another significant aspect of the interview concerned “rules and regulations.” Musk argued that there are an excessive number of them, lacking a system for their removal.

“The government should actively work to eliminate regulations that may have once been justifiable but are no longer relevant or beneficial.”

— Aria Alamalhodaei

Industry Updates and Key Developments

Here's a compilation of recent news and noteworthy events across the automotive and technology sectors.

Self-Governing Vehicles

Argo AI has collaborated with the League of American Cyclists to formulate guidelines concerning the interaction between autonomous vehicles and cyclists. This initiative aims to establish industry-wide standards as self-driving technology transitions from testing phases to broader commercial deployment.

A robotaxi trial service has been initiated in Shanghai by SAIC Mobility and Momenta. Utilizing Momenta’s autonomous driving technology, the companies are currently testing and validating potential commercial applications with a fleet of 20 vehicles.

Battery Technology and Supply Chains

General Motors has secured domestic sources for essential materials used in its electric motors through two new partnerships. These agreements with MP Materials and Vacuumschmelze (VAC) will ensure a consistent supply of rare earth minerals, alloys, and finished magnets for upcoming EVs like the GMC Hummer EC, Cadillac Lyriq, and Chevrolet Silverado EV.

Toyota Motor is investing $1.29 billion to construct its inaugural U.S. battery plant in North Carolina. Named Toyota Battery Manufacturing, North Carolina (TBMNC), the facility is projected to begin production in 2025 as part of a larger $3.4 billion investment in U.S. automotive batteries by 2030.

TuSimple has unveiled its safety framework for its “driver out” autonomous driving system. This program is designed to demonstrate driverless operation of Class 8 trucks on public roadways.

Volkswagen has forged three new partnerships focused on electric vehicle battery technology. These collaborations involve materials technology group Umicore, battery specialist 24M Technologies, and Vulcan Energy Resources, which is developing a lithium brine project in Germany.

The Gig Economy Landscape

DoorDash is introducing an “ultra-fast” delivery service, promising deliveries within 10-15 minutes, starting with a single DashMart location in New York City. Alongside this, the company is piloting a new employment model utilizing full-time employees instead of gig workers for these expedited deliveries.

A recent ruling by the U.K. High Court has deemed Uber’s business model unlawful, as reported by Natasha Lomas. This decision carries significant implications for ride-hailing platforms operating in the U.K. and their tax obligations, centering on the contractual arrangements employed by these companies.

Advancements in Electric Vehicles

Ford intends to significantly increase production of the Mustang Mach E, aiming to triple current capacity by 2023 to address substantial demand, according to CEO Jim Farley. However, the launch of battery-electric versions of the Explorer and Lincoln Aviator crossovers will be delayed by approximately 18 months.

Lucid Group is facing a subpoena from securities regulators investigating the electric automaker’s merger and its transition to a publicly traded company. The Securities and Exchange Commission has requested documents related to this investigation.

Other Notable News

Stellantis has outlined a plan to generate $22.5 billion annually through software-driven services within its vehicles, offering passengers and drivers products and subscriptions. This strategy aligns with competitors seeking revenue streams beyond traditional vehicle sales, repairs, and financing. The company will invest over $33.7 billion through 2025 in software and electrification, including hiring 4,500 software engineers by 2024.

U.S. securities regulators are investigating Tesla following allegations from a former employee regarding the non-disclosure of fire risks associated with its solar panel systems. The complaint, filed by Steven Henkes in 2019, prompted the investigation.

Volvo Cars is responding to a cybersecurity incident involving the theft of a limited amount of its research and development data. The company confirmed unauthorized access to one of its file repositories.

Executive Appointments

Gareth Joyce has been appointed CEO of Proterra, succeeding Jack Allen. Additional board changes include Allen transitioning to non-executive chairman, Ryan Popple stepping down as a director, and ML Krakauer joining the board. Karina Franco Padilla has also been named CFO.

Oxbotica, a developer of open autonomous vehicle software, has named Gavin Jackson as its new CEO.

Volkswagen Group CEO Herbert Diess will retain his position following weeks of speculation regarding his future. The supervisory board also approved an increased investment of €159 billion ($180 billion) over the next five years, up from €150 billion previously.