Tesla, Volvo, GM: Automotive News & Updates

The Station: A Weekly Transportation Newsletter

Welcome to The Station, a newsletter focused on the evolving world of transportation. Subscribe here – simply select The Station – to have the latest updates delivered directly to your inbox each weekend.

This Week in Transportation

This week presented a substantial amount of news, necessitating the omission of the usual “notable news and tidbits” segment. Additionally, a detailed analysis of an extensive interview with Don Burnette, co-founder and CEO of Kodiak Robotics, has been rescheduled for next week.

This postponement allows sufficient space to thoroughly cover the interview, alongside other significant developments. Apologies for any inconvenience this may cause.

Tesla Relocates Headquarters to Austin

A significant development this week involves Tesla’s official move of its headquarters to Austin, Texas. This announcement was made during Tesla’s shareholder meeting on Friday.

The relocation occurs over a year after CEO Elon Musk initially indicated a potential departure from California and initiated legal action against Alameda County. This dispute stemmed from disagreements regarding state regulations during the COVID-19 pandemic.

Musk’s recent statements suggest the primary drivers behind this decision are factors such as housing affordability, expansion possibilities, and reduced commute times for employees, rather than the previous conflict with California health authorities.

Texas Business Environment

It’s important to acknowledge that Texas generally adopts a more lenient regulatory stance towards businesses compared to California. However, it's worth noting that Texas currently prohibits direct sales, a practice Tesla has embraced.

Stay Connected

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

Here are some ways to stay in touch:

• Email: kirsten.korosec@techcrunch.com
• Twitter: @kirstenkorosec

Micromobbin’

This week’s updates are presented directly, without delay.

GoTo Global Mobility, an Israeli operator of shared multimodal transportation solutions, has finalized the acquisition of emmy, a German provider of shared electric scooters. While the financial specifics of this transaction remain undisclosed, the purchase facilitates GoTo’s streamlined expansion into key German markets, including cities like Munich, Hamburg, and Berlin. GoTo anticipates introducing additional mobility options, such as e-bikes and cars, to Germany within the coming year. The company posits that integrating car-sharing services with existing micromobility offerings fosters a comprehensive mobility ecosystem, leading to increased customer loyalty and improved economic performance.

Tortoise, initially known for its collaboration with Spin in remotely rebalancing Spin’s three-wheeled scooters, has significantly shifted its focus towards remotely operated delivery vehicles in recent months. A recent agreement with King Retail Solutions will see Tortoise resell and distribute over 500 of its sidewalk robots, providing convenience store customers with cost-effective, same-day, last-mile delivery services.

Concerning Spin and its unique three-wheeled scooter design, the company has recently deployed a fleet of 50 tri-scooters in Santa Monica. Spin asserts that the S-200 model offers enhanced stability compared to conventional two-wheeled scooters, with an additional 500 units also now operating within Santa Monica.

Cake, a Swedish manufacturer of electric motorbikes, has completed the production and delivery of its initial batch of specialized electric anti-poaching bikes to Africa. The Kalk AP, equipped with 18-inch custom off-road tires, a rear carrier for attachments like arms or medical supplies, and a first aid kit for treating injured animals, has been provided to rangers for testing under the R&D division of the Southern African Wildlife College.

The Continuing Popularity of E-bikes

Data from the NDP Group reveals a substantial surge in U.S. e-bike revenue, increasing by 240% year-over-year from July 2020 to July 2021. In contrast, other cycling equipment experienced a more modest growth of 15% during the same period. E-bikes have now become the third-largest category in the cycling market in terms of sales revenue.

This favorable market climate has prompted Radio Flyer to unveil its inaugural line of electric bikes and scooters, currently available for preorder with official availability scheduled for later this month. Flyer products are specifically designed to cater to the diverse needs of adults, offering a range of accessories such as child seats and cargo carriers. Pricing for the bikes begins at $1,699.

In Brazil, Tembici, a micromobility technology provider, has secured $80 million in Series C funding. These funds will be allocated to expanding its fleet size, extending its operational reach to new cities, and accelerating the development of its e-bike delivery service.

Even Volkswagen recognizes the trend. Employees at VW’s Wolfsburg facility will now have access to a new network of cycle paths connecting the plant to factory gates and parking areas. VW’s workforce has long advocated for cycling to work instead of driving, and this initiative represents a positive response to their requests. The company intends to potentially broaden the scope of this pilot program in the future.

— Rebecca Bellan

Weekly Highlights in Automotive and Mobility Tech

The transportation sector continues to witness a surge in IPO activity. This week, Volvo Cars, a Swedish automobile manufacturer under the ownership of China’s Zhejiang Geely Holding, announced its intention to pursue an initial public offering on the Nasdaq Stockholm exchange, aiming to generate up to $2.9 billion (25 billion Swedish kroner).

This IPO follows closely on the heels of a similar announcement by Volvo Cars’ electric performance division, Polestar, which plans to become publicly traded through a merger with a special purpose acquisition company. Reports suggest a strategic alignment in timing, with the Polestar SPAC valuing Volvo’s stake at approximately $10 billion, thereby facilitating Volvo’s own public listing.

Notable Investment and Deal Activity …

Arbe Robotics, a company specializing in radar technology, commenced trading on the Nasdaq exchange on October 8th following its merger with a special purpose acquisition company. Trading under the ticker symbol “ARBE,” the company’s shares opened at $7.95 and concluded the day at $8.10.

Northvolt is making a substantial $750 million investment to expand its Northvolt Labs facility in Sweden. This expansion will encompass the construction of adjacent testing facilities and a pilot recycling plant, designed to integrate recycled materials directly into the production process. The company envisions the campus as a leading hub for battery technology, ultimately employing 1,000 individuals.

Otto, a Dallas-based fintech startup focused on leveraging vehicle equity for credit access, secured $4.5 million in seed funding. Uncommon Capital led the round, with participation from Pelion Venture Partners, 1930 Capital, Bloom VP, and Spacecadet Ventures. Notable investors also included Mark Cuban, Leo Polovets, Bill Clerico, and Vivek Garipalli. The platform is slated for launch in early 2022.

Ouster, a lidar company that went public earlier this year via a SPAC merger, has reached an agreement to acquire Sense Photonics, a solid-state lidar startup, in an all-stock transaction valued at approximately $68 million. A new business unit, Ouster Automotive, will be established under the leadership of Sense CEO Shauna McIntyre, integrating Sense’s 200 meter-range solid-state lidar technology.

Qualcomm successfully outbid Magna International to acquire Swedish automotive technology company Veoneer for $37 per share in an all-cash deal. In conjunction with investment group SSW Partners, Qualcomm will acquire Veoneer, with SSW retaining Veoneer’s Tier 1 supplier businesses and selling the Arriver tech to Qualcomm.

Rendered.ai, a data startup specializing in synthetic data generation for industries like satellite, medical, robotics, and automotive, raised $6 million in a seed round. Space Capital led the investment, with participation from Tectonic Ventures, Congruent Ventures, Union Labs, and Uncorrelated Ventures.

Tekion, a SaaS platform for the automotive industry founded by Tesla’s former CIO, has raised $250 million in a Series D funding round. Alkeon Capital and Durable Capital co-led the round, with contributions from Hyundai Motor Company, dealer groups, Advent International, Index Ventures, and FM Capital. This funding has increased the company’s valuation to $3.5 billion, bringing its total funding to $435 million.

Tenstreet, a software company specializing in truck driver recruitment, is now majority-owned by Providence Equity Partners. Spectrum Equity and Tenstreet’s co-founder and CEO, Tim Crawford, will continue to hold minority stakes.

TruckLabs, a Stanford spin-off focused on reducing fuel consumption in long-haul trucks through hardware and software solutions, secured $15 million in a Series A round. Calibrate Ventures, Autotech Ventures, and Uncork Capital co-led the round, bringing the company’s total funding to $24 million.

Volcon, an all-electric off-road powersports company, completed its initial public offering, offering 3,025,000 shares of common stock at $5.50 per share. The offering generated gross proceeds of $16.6 million, and the company is now trading on the Nasdaq exchange under the symbol “VLCN.”

Voom, a commercial drone insurer, has raised $15 million to broaden its usage-based insurance model to include motorcycles, light aircraft, and ride-hailing/delivery drivers. JAL Ventures and UP.Partners co-led the funding round, with participation from F2 Capital, Arbor Ventures, Verizon Ventures, and ICON Continuity Fund. The company has now raised a total of $22 million.

Zaver, a Swedish fintech startup offering cardless payment solutions and buy-now-pay-later options, secured $13 million in a Series A funding round.

ZF and autonomous vehicle software company Oxbotica have entered into a strategic partnership to develop a Level 4 self-driving system. Initial deployment will focus on passenger shuttles in major cities globally.

Zūm, a startup providing optimized transportation services for school-age children, raised $130 million in a Series D round led by Softbank Vision Fund 2. The funds will be used to expand the company’s fleet with 10,000 new electric buses, vans, and cars, aiming for a 100% electric fleet by 2025. Currently, the fleet consists of 1,000 vehicles, primarily powered by internal combustion engines.

Navigating the Landscape of Autonomous Vehicle Adoption

This week’s discussion originates from statements made by Cruise CEO Dan Amman during a presentation at General Motors’ recent investor event. While the automaker shared numerous updates – details worth exploring in this newsletter – a specific point regarding the commercialization of Cruise has captured my attention.

Amman indicated that within the next 12 to 24 months, users will have the capability to request a ride from an autonomous vehicle with a minimal wait time in select major U.S. cities. He further projected deployment across multiple cities and markets nationwide within a three to four-year timeframe.

This raises a key question: what proportion of the population would actually choose to ride in a self-driving vehicle? Not simply in the present, but also considering a one-year or five-year horizon? The answer, as expected, is multifaceted. Let's examine recent data from the market research firm Morning Consult, based on two surveys conducted with 2,200 participants each, in late August and early September.

The latter survey revealed that only 25% of respondents would be willing to utilize an AV within the current or following year. However, this figure increases significantly to 53% when considering a five-year timeframe. Notably, 27% of individuals stated they would “never be ready” to experience a ride in an AV. These findings align with the initial poll, which demonstrated marginally improved attitudes towards AVs.

Morning Consult also inquired about public awareness of the National Highway Transportation and Safety Administration’s investigation into Tesla’s Autopilot system. It’s somewhat problematic that Autopilot is often perceived as a fully autonomous system, despite not being one. This is partly due to a lack of public understanding and exacerbated by Tesla’s CEO, Elon Musk, who labels an upgraded version as “Full Self Driving.”

Fortunately, for developers in the autonomous vehicle space, public sentiment appears to be improving over time. An analysis of public opinion polls compiled by Advocates for Highway Safety suggests a gradual shift, with individuals moving from a firm “Never” stance to a more open “Maybe” position when asked about riding in an AV.

According to poll results, key factors driving this positive shift include increased education about AV technology, greater visibility of these vehicles, and the implementation of government regulations. A survey conducted by Partners for Automated Vehicle Education showed that over half of respondents would have increased trust in AVs if they were subject to government approval processes, similar to driver’s licensing for humans.

Hesitancy towards robots stems from a variety of reasons, some logical and others less so. However, this suggests that the progression towards widespread autonomous vehicle adoption will likely be gradual and consistent, resembling a tortoise rather than a hare in a race.

— Aria Alamalhodaei

GM Investor Day Summary

The 2022 Chevrolet Silverado ZR2, featuring updated headlights. Image Credits: GM

As previously noted by Aria, General Motors recently concluded a two-day investor conference, during which numerous announcements and projections were made. The core takeaway is that GM intends to achieve a doubling of revenue by the decade's end and surpass Tesla in electric vehicle market share, all while simultaneously enhancing profitability within its internal combustion engine vehicle sector.

Essentially, GM emphasized the expansion of software-driven services and subscription models, alongside the development of a range of accessible electric vehicles, exemplified by the Chevy Silverado pickup. Mary Barra, GM’s CEO, articulated the company’s ambition to attract potential Tesla buyers through competitive pricing, established customer loyalty programs, robust manufacturing capabilities, and an extensive dealer network.

A comprehensive overview of the key announcements follows:

Strategic Supply Chain Management

Following disruptions caused by semiconductor shortages, battery-related issues leading to production halts, disappointing Q3 sales figures, and vehicle recalls, a robust logistical strategy is crucial for GM’s success.

The company has entered into a non-binding memorandum of understanding with General Electric to secure the supply of rare earth materials essential for the production of EVs and clean energy technologies. This collaboration will also investigate methods to improve the availability of magnets, copper, and “eSteel,” a material incorporating recycled components. This approach aligns with the growing trend among automakers seeking greater control over their supply chains, as reliance on an unstable supply network could prove detrimental to GM.

Expanded Investment in Charging Infrastructure

The successful introduction of a substantial number of EVs necessitates a corresponding expansion of charging infrastructure. Consequently, GM announced a planned investment of approximately $750 million between now and 2025 to enhance access to public, residential, and workplace EV charging solutions. Specific details regarding the allocation of these funds remain undisclosed.

Will the investment focus on developing its own charging network or forging partnerships? The latter appears more likely. Last year, GM established a partnership with EVgo, a charging network provider, with the goal of installing over 2,700 DC fast chargers within a five-year timeframe.

Advancements in ADAS Technology

GM is preparing to launch Ultra Cruise, a new hands-free advanced driver-assistance system, in 2023, claiming it will function effectively in 95% of all driving situations. Initial availability will be limited to Cadillac models, with subsequent rollout to other GM brands such as GMC and Chevrolet. The pricing model – a one-time fee or a subscription – remains unclear.

However, based on statements from company executives regarding subscription services, it is anticipated that access to Ultra Cruise will also be offered on a pay-per-use basis.

Revenue Generation Through Subscriptions

GM anticipates that in-car subscriptions will position it alongside industry leaders like Netflix and Spotify in terms of revenue generation by 2030. The company projects nearly $2 billion in revenue from in-car subscriptions, including OnStar and Maps+, this year, with potential growth to $25 billion over the next decade.

GM is actively expanding its subscription offerings, particularly targeting commercial fleets that may benefit from logistics and analytics services. The launch of its Ultifi software platform in 2023 is expected to further stimulate subscription uptake.

Commercial Deployment of Autonomous Vehicles

Cruise, GM’s autonomous driving subsidiary, projects the deployment of “tens of thousands” of its purpose-built Origin AVs on U.S. roads in the coming years, despite production not commencing until 2023.

The company, currently awaiting final permit approval to launch a commercial driverless robotaxi service in San Francisco, is relying on technological progress, a $5 billion credit line from GM Financial, and a driverless operational model to facilitate rapid and profitable scaling of self-driving ride-hailing and delivery services.