Zoox, Tesla, and the Battle for Autonomous Vehicle Supremacy

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Greetings, readers! The Station serves as your primary resource for information regarding all methods of transporting people and goods, both current and emerging.

This Week's Highlights

Rebecca Bellan and Aria Alamalhodaei of TechCrunch had a particularly full week, prompting a slight adjustment to the usual scope of this newsletter. Let's begin!

Indy Autonomous Challenge Inaugural Event

I’d like to acknowledge the successful completion of the first Indy Autonomous Challenge, which took place on Saturday. This event united students from 21 universities across nine nations.

These students were tasked with developing the software for driverless racecars, enabling them to compete in a high-speed, autonomous race.

The Technical University of Munich emerged as the winning team, claiming the $1 million grand prize. While I wasn't present, reports from attendees indicated a well-executed and enjoyable event.

A strong foundation has been laid for the continuation and growth of the Indy Autonomous Challenge in the years to come.

Stay Connected

Feel free to reach out with your feedback, critiques, or insights. You can email me at kirsten.korosec@techcrunch.com.

Alternatively, you can connect with me directly on Twitter – @kirstenkorosec.

Micromobbin’

This week’s spotlight falls on a relatively new company and a key player in the micromobility sector: Zoba.

Based in Boston, Zoba provides fleet optimization solutions for numerous prominent micromobility operators, including Spin. Recently, the company secured $12 million in Series A funding.

Zoba’s AI-driven software integrates with operators’ fleet management systems. It considers evolving local regulations and aims to maximize vehicle utilization and efficiency, ultimately supporting a company’s financial objectives.

Regarding financial performance, Lime CEO Wayne Ting indicated that the third quarter of 2021 represented the company’s second profitable quarter, adjusted for EBITDA. While Lime didn’t experience increased sales or revenue, improved efficiency may have contributed to profitability. However, confirmation awaits a potential public offering and earnings disclosure.

Bolt Mobility is introducing “MobilityOS,” an in-app navigation system for its e-scooters. Simultaneously, they’re launching a new scooter featuring an integrated smartphone holder that leverages the scooter’s battery to charge the phone. The practicality and safety of this feature remain to be seen.

Helbiz is collaborating with mapping company Fantasmo to integrate parking technology into its e-scooter app. Fantasmo’s camera-positioning technology accurately identifies e-scooter locations and verifies parking compliance within a narrow margin of eight inches, utilizing a rider’s smartphone camera. Initial deployment will occur in Miami.

Voi is returning to Copenhagen as the city strives to become the world’s first carbon-neutral capital by 2025. The Swedish-based company will deploy 800 e-scooters in the Danish capital for a year, with potential for a two-year extension.

Niu Technologies, a Chinese electric motor scooter manufacturer, has announced plans to expand into e-bike production to bolster its international reach. The e-bike lineup includes models capable of 15 mph and 28 mph. These bikes are notably heavy, approaching 100 pounds, due to their substantial aluminum frames and enhanced dual suspension systems.

Kawasaki, the Japanese motorcycle manufacturer, has declared its intention to transition to an all-electric lineup in developed markets by 2035. This timeline allows ample time for model development while continuing sales of gasoline-powered motorcycles.

In response to Ola’s success in the electric scooter market, Honda has announced its entry into the Indian market with similar offerings. Honda Motorcycle & Scooter India anticipates launching a product within the next fiscal year.

Lastly, at last month’s Micromobility America conference, industry expert Horace Dediu presented ten core principles of micromobility. These principles are outlined below, and the presentation video is recommended for further insight:

Micromobility wasn’t invented by a single entity. It represents the convergence of numerous ideas and the collective efforts of countless individuals. The decreasing cost of technologies like lithium-ion batteries played a crucial role.
The prevalence of short trips underscores their importance. Approximately 50% of all trips are under five miles, a figure that could increase with greater access to vehicles designed for shorter distances.
Cars represent a comprehensive transportation solution. Shorter trips can be effectively addressed with smaller vehicles, while longer journeys can utilize larger, shared transportation options like airplanes, trains, and buses.
As size decreases, impact increases. Dediu points to the higher sales volumes of Android and iPhone compared to PCs, despite a later market entry. He anticipates similar growth for micromobility vehicles relative to electric vehicles.
Addressing emissions requires a shift in focus. Despite increasing car numbers, micromobility offers the potential to double the number of commuters while halving emissions.
Prioritize opportunities where value exists. Infrastructure investments should be strategically allocated, recognizing that existing infrastructure can be repurposed or even dismantled.
Innovation often takes unexpected forms. While ambitious projects like flying taxis receive significant funding, simpler solutions like bike lanes offer greater impact.
Customer satisfaction drives adoption. The success of micromobility hinges on positive user experiences and the enjoyment derived from these vehicles.
Micromobility leverages intelligence and data. It integrates data analysis, software, and sensing technologies, making it an increasingly sophisticated transportation option. Software advancements enable solutions to overcome inherent machine limitations.
Cities demonstrate resilience. Cities have historically overcome challenges and emerge stronger. They possess an inherent ability to adapt and thrive, becoming more robust under stress.

— Rebecca Bellan

Recent Investment Highlights

While a definitive peak in the urban air mobility sector remains to be seen, significant progress continues to be made.

HT Aero, affiliated with the Chinese EV manufacturer Xpeng, has secured a substantial $500 million in Series A funding. According to Deli Zhao, the company’s founder and president, these funds will be allocated towards attracting highly skilled personnel, furthering research and development, and achieving airworthiness certification for their next-generation vehicles.

The company recently unveiled the Xpeng X2, its fifth-generation flying vehicle. This model is capable of autonomous take-off and landing in specific urban environments, alongside backend systems for scheduling, charging, and flight control. HT Aero intends to focus on providing UAM solutions directly to individual consumers, aligning with Xpeng’s broader objectives.

Notable Investment Activity …

AirGarage, a startup specializing in parking management software and services for property owners, has completed a $12.5 million Series A funding round. The round was led by a16z, with participation from existing investors including Floodgate, Founders Fund, and Abstract Ventures. Currently, AirGarage manages over 200 parking locations across 30 states.

Alaska Airlines has established a new venture capital division, Alaska Star Ventures, dedicated to identifying and investing in technologies aimed at reducing carbon emissions in air travel. The firm’s initial investment involves a $15 million contribution to UP.Partners’ inaugural venture fund.

UP.Partners’ $230 million early-stage fund concentrates on advancements in mobility technologies. Additional investors in the UP.Partners fund include Woven Capital (Toyota Motor’s investment arm), Standard Industries, Hillwood, and OSM Maritime.

Ally Financial, a major player in automotive financing, is planning to acquire Fair Square Financial, a credit card company, for $750 million, as reported by Automotive News.

BMW i Ventures has made an undisclosed investment in Our Next Energy Inc., a Michigan-based company developing advanced energy storage solutions for electric vehicles, focusing on increased range and reduced battery costs.

FlixMobility, a German transportation company valued at $3 billion, has demonstrated a strong interest in the U.S. market. The company has agreed to acquire Greyhound Lines, the well-known U.S. bus network, from FirstGroup. The transaction, encompassing the vehicle fleet, trademarks, and associated assets and liabilities, carries an enterprise value of $46 million, with an additional deferred consideration of $32 million accruing interest at a rate of 5% annually.

Flock Freight, a logistics company focused on the trucking industry, has raised $215 million in a Series D round led by SoftBank Vision Fund 2, achieving a valuation exceeding $1 billion and attaining unicorn status.

Gatik, an autonomous vehicle technology company, has entered into a strategic agreement with Ryder System for vehicle leasing and maintenance services, according to Freightwaves.

River, an Indian startup specializing in electric two-wheelers, has emerged from stealth mode with $2 million in seed funding from Maniv Mobility and TrucksVC.

Yummy, a Venezuelan delivery super app launched in 2020, has secured $18 million in a Series A round to support its planned expansion throughout Latin America. Anthos Capital led the round, with further participation from JAM Fund, whose founder, Justin Mateen, previously invested $4 million in the startup’s seed round.

Policy Updates

Welcome to this week’s edition of Policy Corner.

A significant development this week involves the appointment of Missy Cummings, a former Navy fighter pilot and engineering professor from Duke University, to a key safety advisory position within the nation’s primary vehicle safety regulator.

While such appointments don’t always garner widespread public attention, the reaction from Tesla enthusiasts was notably strong (as noted by transportation editor and The Station founder Kirsten Korosec, the autonomous vehicle sector was keenly aware, though largely refrained from public statements). A wave of concern and criticism erupted within the Tesla owner and shareholder community, manifesting as a barrage of commentary on Twitter, occasionally escalating into personal attacks directed at Cummings.

Cummings has consistently voiced critiques of Tesla’s Autopilot advanced driver assistance system, and more recently, the deployment of the “Full Self-Driving” beta program to a large number of drivers throughout the United States. During a recent appearance on the McKinsey Global Institute podcast, she highlighted the issue of “mode confusion,” where drivers lack a complete understanding of a system’s capabilities and limitations.

“This phenomenon is well-established in aviation, but represents a new challenge for the automotive industry,” she explained on the podcast. “Instances occur where individuals mistakenly believe Autopilot and Full Self-Driving equate to full automation, leading them to disengage and potentially cause accidents.”

Concurrent with the announcement of her appointment, Elon Musk, CEO of Tesla, posted on Twitter, stating, “Objectively, her record demonstrates a strong bias against Tesla.” This tweet intensified the existing discontent among Tesla supporters, many of whom are also investors. A petition calling for her removal has also been circulated online.

Tesla advocates have also drawn attention to Cummings’ involvement on the board of Veoneer, a Tier 1 supplier of advanced driver assistance systems and related hardware, including radars, lidars, thermal night vision cameras, and vision systems. The inclusion of lidar – a sensor considered essential for full automation by most in the industry, excluding Tesla – has been a focal point for Tesla fans. Qualcomm has recently finalized an agreement to acquire Veoneer.

Critics suggest that the National Highway Transportation and Safety Administration might adopt a more cautious approach towards ADAS and Tesla going forward. (It’s worth noting that NHTSA has historically been relatively lenient with Tesla; any increased scrutiny would be perceived as a significant shift in regulatory oversight.) The extent of her involvement in the ongoing NHTSA investigation into Autopilot, initiated following 12 incidents involving Teslas colliding with stationary emergency vehicles, remains uncertain.

Kirsten Korosec adds a note on this matter: Missy Cummings initially protected, and subsequently deleted, her Twitter account due to receiving not only harassment but also death threats, which are currently under investigation by authorities.

Update: The FSD beta software was temporarily reverted to version 10.2 on Sunday. Musk explained via Twitter, “Seeing some issues with 10.3, so rolling back to 10.2 temporarily. As expected with beta software, comprehensive testing across all hardware configurations and conditions is impossible with internal QA alone, necessitating public beta testing.”

Shifting focus to another key development this week…

Uber and Lyft are actively lobbying for the inclusion of provisions designed to encourage electric vehicle adoption within the $3.5 trillion budget reconciliation bill currently under consideration by Congress.

Both ride-hailing companies have publicly committed to transitioning their entire fleets to electric vehicles by 2030 – an ambitious goal that will likely require substantial government assistance to achieve.

According to reporting from E&E News, both companies identify cost and the limited availability of charging infrastructure as major barriers to wider EV adoption. Indeed, electric vehicles remain financially inaccessible for many, particularly when compared to the abundance of used gasoline-powered vehicles available.

Adam Gromis, a sustainability policy manager at Uber, explained to E&E News, “A significant portion of our driver population comes from lower-income communities and provides mobility services in urban areas. Therefore, we advocate for the expansion of slow charging options in underserved neighborhoods and multi-unit dwellings, as well as the deployment of fast charging stations in urban centers and areas with high demand.”

Data from the spending transparency platform OpenSecrets reveals that Uber and Lyft have each invested approximately $1 million in lobbying efforts during the first half of the year, although they employed a smaller number of lobbyists overall. Third-quarter lobbying expenditure data is currently unavailable.

— Aria Alamalhodaei

Industry Updates and Recent Developments

This week’s news is a compilation of various happenings within the autonomous vehicle and transportation sectors – a diverse collection of updates.

Initial authorization has been granted to Elon Musk’s Boring Company for the construction of a transportation network beneath Las Vegas. This system is designed to transport passengers in Tesla vehicles through a series of tunnels. The permit and franchise agreement will facilitate an expansion of the Vegas Loop, extending beyond its current 1.7-mile range to encompass a 29-mile route with 51 stations, including casinos on the Las Vegas Strip, the city’s stadium, and UNLV, ultimately connecting to McCarran International Airport.

Lyft has recently published its inaugural safety report, a long-awaited document detailing its safety measures.

Miles, the rewards application offering mileage accrual for every mile traveled, has launched its services in Japan. This expansion is intended to leverage the platform’s marketplace, which currently provides users with access to over 500 personalized rewards from 350 brands, such as Garmin, Hulu, Japan Airlines, Red Bull, and Under Armour.

Motional, a joint venture between Hyundai Motor Group and Aptiv focused on autonomous vehicle technology, is collaborating with Transport for New South Wales. This partnership aims to assist the Australian state in evaluating the technology and potential benefits of a driverless ride-hailing service.

Plus, a developer of self-driving truck technology, has announced plans for expansion into the European market. To support this growth, the company has appointed Bosch veteran Sun-Mi “Sunny” Choi as its senior director of business development.

Rivian, currently preparing for its initial public offering, anticipates a quarterly net loss of up to $1.28 billion. This is attributed to the expenses associated with initiating production of its first vehicle model, as detailed in a recent regulatory filing. The projected net loss for the quarter ending September 30th is estimated between $1.18 billion and $1.28 billion.

Stellantis, the automotive group resulting from the merger of Fiat Chrysler Automobiles and Groupe PSA, has reached a preliminary agreement with LG Energy Solution to establish a facility for the production of battery cells and modules within North America.

Tesla has continued its trend of profitability, reporting a net income of $1.62 billion for the third quarter. This represents a substantial increase compared to the $331 million earned during the same period last year. Record sales, despite ongoing global chip shortages and supply chain disruptions, contributed to this record profit. Remarkably, Tesla achieved this net income despite the majority of its sales being comprised of its more affordable Model Y and Model 3 electric vehicles.

Analysts at Wolfe Research conducted a ride in an autonomous test vehicle developed by Argo AI. Their assessment indicated significant progress, with the vehicle successfully navigating a complex environment including heavy traffic, parked vehicles, street cleaners, bicycles, scooters, and pedestrians. The report highlighted the vehicle’s ability to make complex decisions, such as yielding to pedestrians and executing unprotected left turns. Their conclusion: “We tested an Argo’s AV. And it reinforced our view that this technology is coming sooner, with potential for greater disruption than investors currently appreciate.”

Zoox, the autonomous vehicle startup acquired by Amazon, is extending its operations to Seattle. The company intends to establish an engineering office and operations facility in 2022, serving as a base for its autonomous vehicle testing. Currently employing over 1,300 individuals, Zoox conducts testing in San Francisco, Las Vegas, and Foster City, California.

I recently interviewed co-founder and CTO Jesse Levinson, who revealed that Zoox has long considered Seattle as a potential testing location. A small-scale pilot program was even conducted in the city in late 2019.

Levinson explained that the frequent rainfall in Seattle is a key factor in Zoox’s decision. The company has developed advanced weatherproofing technologies, including what he termed “active rain mitigation” for its sensors. “We’re very excited about that and we want to test it and validate it in the rain; Seattle is a great place for that,” Levinson stated.

Despite establishing operations in the same city as Amazon’s headquarters, Levinson emphasized the continued operational independence of the two companies. The Zoox office and facility will not be located on the Amazon campus. However, Levinson indicated that Zoox will leverage its proximity to Amazon for future collaborations, describing this as an added benefit.