Intel Report | Dec 16 | The Weekly Automotive & Mobility News That Matters

Why do entry valuations matter so much to venture capital funds? | LINK

🚗 Automotive

With the decision to downgrade Cruise, GM is giving up on hopes of transforming itself into a multi-platform technology company that targeted bringing in $50 billion in revenue from robotaxi fares and subscriptions by 2030. The carmaker had aspired to double its revenue by 2030 on the twin pillars of autonomy and electric vehicles. That goal also now looks remote without Cruise as a new business and after GM scaled-back its lofty EV sales ambitions. | Bloomberg ($)

A few years ago, automakers were celebrating record profits as the pandemic created shortages of new cars, allowing them to raise prices. Now the hangover is setting in. Each carmaker has its own problems, but there are some common threads. They include a tricky and expensive technological transition, political turmoil, rising protectionism and the emergence of a new class of fast-growing Chinese carmakers. The many woes raise questions about the future of companies that are a critical source of jobs in many Western and Asian countries. Many of these problems have been apparent for years but became less pressing during the pandemic, lulling some automakers into complacency. When shortages of semiconductors and other components slowed production and limited inventory, carmakers found it easy to raise prices. | The New York Times ($)

Amazon expanded into online car sales with the launch of Amazon Autos, an e-commerce business that lets customers find, order, and buy new cars, trucks, and SUVs from dealerships. Amazon is kicking off the new endeavor with Hyundai in 48 U.S. cities, including Atlanta, Boston, Chicago, Los Angeles, and New York. The launch comes a little more than a year since the e-commerce giant announced plans to start selling vehicles on its website in the second half of 2024. Amazon said it will add more cities and additional auto manufacturers in 2025. | TechCrunch

Tekion Corp filed a federal antitrust lawsuit against CDK Global alleging the segment leader engages in “a systematic scheme to thwart competition in the franchise dealer management system (DMS) market.” The Dec. 9 lawsuit, filed in U.S. District Court in the Northern District of California, claims CDK unfairly prevented competition with other DMS players through how it handles its franchised dealership client data. | Automotive News ($)

CDK Global said Tekion’s federal antitrust lawsuit filed Dec. 9 against the company is “low on substance and high on rhetoric,” and the software company claims the lawsuit was filed in retaliation for how it manages dealership management system security. “We view the recently filed complaint as low on substance and high on rhetoric,” a CDK spokesperson told Automotive News in a Dec. 12 statement. “We believe Tekion filed it in retaliation to a cease-and-desist letter CDK sent to Tekion related to unauthorized access to our systems that was detected by our security monitoring protocols.” “It is unfortunate Tekion has resorted to using a legal filing as a marketing stunt in an attempt to bypass contractual terms and industry practices, but we are confident our industry will see this for what it really is.” | Automotive News ($)

Tekion sold its sole dealership, Hyundai of Gilroy in California, to Pedram Amin, owner of United Automotive Group. The dealership was one of two that Tekion purchased in 2020 to test and launch its artificial intelligence-based Automotive Retail Cloud, a cloud-based DMS. Tekion sold the other store, Gilroy Buick-GMC, in July to Gill Automotive Group. Both dealerships are about 60 miles south of Tekion’s Silicon Valley headquarters in Pleasanton, Calif. | Automotive News ($)

The head of Lucid Motors said the electric vehicle company is in talks with multiple automakers about potential partnerships as it tries to broaden its reach in the market for plug-in cars. Lucid would welcome an opportunity to share costs and intellectual property with a traditional car company, Chief Executive Officer Peter Rawlinson told Bloomberg TV, noting that there are ongoing conversations with “a couple” of manufacturers. | Bloomberg ($)

Watch the 2025 Ford Mustang GTD record a record-setting 6 minutes and 57.685 seconds lap of the Nürburgring Nordschleife. (Pro Tip: Turn up your sound. Loud.) | YouTube

Once one of the most vocal American executives on the dangers of climate change, Elon Musk called for a “popular uprising” against the fossil fuel industry in a 2016 film. At Tesla, every internal slide presentation had to include figures from former vice president Al Gore’s documentary “An Inconvenient Truth” citing rising carbon dioxide levels in the atmosphere, a reminder of the company’s mission. But the paragraph about global warming is no longer required in Tesla’s presentation decks and climate change has plummeted on Musk’s list of priorities: In an August live stream on X, he told Trump “we don’t need to rush” to solve the climate crisis. | The Washington Post ($)

Since just before the pandemic in December 2019, consumers have seen a roughly 51% jump in auto-insurance prices. Car insurance prices revolve around the supply of cars available for purchase, which has been trending far more expensive as manufacturers funnel resources into souped-up versions of pricey models and cut back on cheaper options. New technologies have made vehicles safer, but the costs are higher to replace these more expensive parts. Labor costs to repair cars have also skyrocketed. Rising accident frequency and severity is another factor, said Loretta Worters, a spokeswoman for the Insurance Information Institute, fueled by distracted and reckless driving. “As a result, we are seeing more fatalities and injuries, leading to increased attorney involvement in claims,” she said. | The Washington Post ($)

Jaguars are apex predators. But their habitat is shrinking. Last year the number of Jaguar cars sold was just below 67,000, only slightly ahead — on one estimate — of the number of actual jaguars that remain in the wild. By charging more for its cars, Jaguar can be profitable by selling fewer: it estimates that it only needs to sell about 30,000 cars a year to break even, less than half as many as it did last year. All it needs is to excite the super-rich. | Financial Times ($)

Scott Galloway argues that Jaguar's rebrand is a rejection of everything that ever made Jaguar … Jaguar. Not just the grace and power of the animal, but also the brand’s Britishness. | Scott Galloway

The annual economic cost for fatal crashes in the U.S. is estimated to be $417 billion, according to a recently published 2025 Roadmap for Safety report produced by the Advocates for Highway and Auto Safety. This includes $130 billion in lost workplace and household productivity, $141 billion in property damage costs, $108 billion in other costs, and $38 billion in present and future medical costs, the report says.  “When loss of life, pain, and decreased quality of life are added to economic costs, it is estimated to exceed $1.4 trillion,” the report says. Each person living in the U.S. essentially pays an annual “crash tax” of nearly $1,268, the report says. | Repairer Driven News  

⚡️ Electric Vehicles (EVs)

Pacific Gas and Electric Company is trying out an innovative program to make EVs play nicer with the grid: In October, PG&E launched its EV Charge Manager program. The goal is to enlist about 7,500 customers willing to earn up-front and ongoing incentives in exchange for letting the utility control when their EVs charge from hour to hour. Charge Manager aims to test what Lydia Krefta, PG&E’s director for clean energy transportation, described as “active managed charging.” That’s different from the time-of-use rates and other more common utility programs, which encourage EV owners en masse to avoid charging during certain hours when regionwide electricity demand spikes and start charging later at night when electricity demand eases. Instead of turning all the EVs on and off at the same time like time-of-use rates and other similar programs aim to do, managed charging modulates how EVs power up throughout the day and night in response to how they’re actually affecting the local grids they’re connected to. | Canary Media

Once you go electric, you almost never go back to a gas-powered car. According to a new survey from the Global EV Alliance, over 90% of EV drivers plan to buy another electric vehicle after trading in a gas car. Meanwhile, only 1% said they would return to an ICE vehicle. The new Global EV Alliance study collected data from over 23,000 electric vehicle drivers across 18 different countries, including the US, Canada, France, India, Brazil, and more. They found that EV drivers are overwhelmingly more likely to stick with an electric option rather than return to a gas-powered car. | Electrek

The batteries of electric vehicles (EVs) subject to the normal use of real-world drivers – like heavy traffic, long highway trips, short city trips, and mostly being parked – could last about a third longer than researchers have generally forecast, according to a new study by scientists working in the SLAC-Stanford University Battery Center, a joint center between Stanford University’s Precourt Institute for Energy and SLAC National Accelerator Laboratory. This suggests that the owner of a typical EV may not need to replace the expensive battery pack or buy a new car for several additional years. | Stanford Report

While secondhand prices for EVs have been plummeting, evidence is building that their batteries could last longer than the eight-year warranties most come with. In fact, they could still be very usable even after 20 years, potentially giving full-electric cars a longer useful life than many fossil-fuel equivalents. | Wired

The average price of lithium-ion battery packs has fallen the most in seven years, according to a BloombergNEF survey, in a development likely to accelerate price parity between electric vehicles and gasoline-powered cars. The cost of battery packs has dropped 20% to $115 per kilowatt-hour in 2024, according to BNEF’s annual battery price survey. An overcapacity in cell production, lower metal and component prices and the continued shift to using cheaper lithium iron phosphate batteries drove the decline, the survey said. The faster-than-expected decline signals that prices for electric vehicles could fall to similar levels to internal combustion engine vehicles as soon as in 2026, when average pricing is expected to fall below $100/kWh, the benchmark often referenced as the point of price parity. This has already been achieved in the Chinese market where average battery EV prices are below their gasoline-powered counterparts, according to the report. | Automotive News ($)

Technology advances that have allowed electric vehicle battery makers to increase energy density, combined with a drop in green metal prices, will push battery prices lower than previously expected, according to Goldman Sachs Research. Global average battery prices declined from $153 per kilowatt-hour (kWh) in 2022 to $149 in 2023, and they’re projected by Goldman Sachs Research to fall to $111 by the close of this year. Our researchers forecast that average battery prices could fall towards $80/kWh by 2026, amounting to a drop of almost 50% from 2023, a level at which battery electric vehicles would achieve ownership cost parity with gasoline-fueled cars in the US on an unsubsidized basis. | Goldman Sachs

California is embarking on a major expansion of its electric vehicle charging system, an effort to dramatically increase the number of places for drivers to plug in at a time when EV sales are growing faster than the country’s charging network. The California Energy Commission, the state agency that oversees energy policy, approved a $1.4 billion plan Wednesday that regulators said would result in nearly 17,000 new chargers for passenger vehicles statewide, adding to the more than 152,000 public and private chargers available today. The money will be spent over the next four years. In a news release, state regulators said at least 50% of the funds would go to parts of the state that bear a disproportionate share of pollution, such as communities near major highways, oil refineries and landfills. | The Washington Post ($)

The US Environmental Protection Agency (EPA) will grant California the right to ban sales of new gas cars by 2035 — a move that President-elect Donald Trump could attempt to reverse. The EPA plan underscores how President Joe Biden is racing to Trump-proof his climate legacy before leaving office next month. Just this week, his administration moved to block new mining in a sensitive watershed and to ban two cancer-causing chemicals used in a variety of consumer products and industrial settings. | The Washington Post ($)

Hugh Sheehy from Go Eve argues that buying an EV is a no-brainer unless you live in a remote location AND have no access to a plug. | Go Eve

🇨🇳  China

Michael Dunne provides a stark juxtaposition of Chinese vs. American manufacturing philosophies. His takeaway? China is dominant in manufacturing EVs today; the question is whether the rest of the world will be content watching from the sidelines - or will dig deep right now to find the will – and the way - to compete. | Michael Dunne

China is taking over the world automotive market. | @zerohedge

China’s top electric vehicle maker BYD gained market share as the world’s largest auto market recorded its fastest-growing month in 2024, setting up BYD to exceed its global annual sales goal and overtake Ford and Honda. BYD has been on an extraordinary expansion this year, increasing capacity and undertaking a massive hiring spree to turbocharge revenue that surpassed EV leader Tesla in the third quarter. Aided by robust sales in China, BYD is on course to top its annual sales target of 4 million vehicles, which would put it ahead of Honda and Ford for 2024. | Automotive News ($)  

🚂 Rail

Siemens Mobility launches the first hydrogen trains for emission-free travel in Berlin-Brandenburg and Bavaria. | RTM  

🚘  Sharing & Subscription

Hyundai Connected Mobility has big plans for its Mocean Subscription service, which it plans to expand throughout Europe’s major markets after finding success in Spain and the U.K. and recently debuting in Germany. The Hyundai Europe unit’s bullishness toward subscriptions comes as automakers such as Volvo Cars and sister brand Lynk & Co abandon or readjust their approach to a sector that is forecast to experience strong growth in the midterm. Hyundai Connected Mobility is in partnership with Casi, a Norwegian startup specializing in providing the car subscription technology needed to capitalize on the shift toward usership models, such as subscriptions, car-sharing and ride-hailing, as more consumers move away from traditional ownership and leasing. Mocean, which provides access to more than 40 Hyundai models, aims to make car ownership more flexible by offering short-term subscriptions, which include costs such as insurance, maintenance and taxes in a single monthly fee, thereby appealing to younger drivers. | Automotive News ($)  

🤖  Autonomy & Robotics

Tesla aims to start its robotaxi service with a company-owned fleet backed up by human teleoperators for safety, Deutsche Bank said in a note after a meeting with the company's head of investor relations. The electric vehicle maker still is shooting for a launch of its cheaper vehicle in the first half of next year and other models later in the year, the bank said after the meeting with investor relations chief Travis Axelrod. It published the note on Friday. Tesla plans to launch robotaxi service in California and Texas next year, Deutsche Bank said. Tesla had set that goal earlier this year. | Reuters ($)

GM’s Cruise unit is abandoning its effort to develop robotaxis, and the automaker instead will use the self-driving technology unit to work on advanced driver-assistance features that eventually may lead to fully autonomous personal vehicles. The automaker on Dec. 10 said it will combine Cruise and its own technical teams “into a single effort to advance autonomous and assisted driving” and that it “will no longer fund Cruise’s robotaxi development work given the considerable time and resources that would be needed to scale the business.” | Automotive News ($)

And then there were three. General Motors’ decision to abandon its Cruise self-driving–car unit’s efforts in the robotaxi market on Tuesday is good news for Alphabet Inc.’s Waymo, already the market leader, and helpful for Tesla, which has ambitions in the market. (Let’s not forget Amazon, which is testing its Zoox robotaxis in San Francisco as well.) GM’s decision is a reminder of the brutally high costs of developing this technology, which over the years have forced out other developers, such as Uber and Argo AI. GM has spent many billions on Cruise, the self-driving–car developer it acquired in 2016. Consider the bill for the past four years: GM reported Cruise’s operating losses totaling $5.8 billion between 2021 and 2023, plus $1.3 billion for the first nine months of this year. On top of that, it spent $2.1 billion in 2022 to buy out a former Cruise shareholder, SoftBank. GM had slashed its spending on Cruise over the past 12 months, to be sure, but that wasn’t enough. As GM said today, “considerable time and resources…would be needed to scale the business.” GM isn’t abandoning the technology it developed, instead planning to use it to make self-driving cars for personal use. But that approach is an uphill battle, given the premium GM would have to charge for self-driving cars to have a chance to earn a return on its investment. There’s a reason Waymo isn’t pursuing that approach right now, instead focusing on robotaxis. | The Information ($)

The Trump transition team is reportedly looking to kill the requirement for Tesla to have to report its crashes involving Autopilot and Full Self-Driving features. It probably has nothing to do with Tesla’s CEO, Elon Musk, being on Trump’s transition team. National Highway Traffic Safety Administration (NHTSA) has a program that requires automakers to report crashes involving advanced driver assist systems (ADAS). Reuters obtained a document that shows the Trump transition team is looking to kill this program. The Trump transition team wants the incoming administration to drop a car-crash reporting requirement opposed by Elon Musk’s Tesla, according to a document seen by Reuters, a move that could cripple the government’s ability to investigate and regulate the safety of vehicles with automated-driving systems. To be fair, most automakers are against any requirement to report, but Tesla is leading the effort here since its vehicles are involved in the vast majority of crashes reported through this program. A Reuters analysis of the NHTSA crash data shows Tesla accounted for 40 out of 45 fatal crashes reported to NHTSA through Oct. 15. | Electrek  

✈️  Aviation & Space

The United States Air Force is exploring the use of self-flying tankers for aerial refueling and other missions under a new contract. Boston-based Merlin Labs is the beneficiary of the 19-month, undisclosed value contract that aims to give current and future American tankers the ability to adapt missions on the fly without human intervention. | Flying

Lufthansa measured the average willingness to pay (WTP) for air-taxi use cases, such as city-center to airport as well as regional airport transfers. The average WTP for a combined city-to-airport and regional-to-airport trip stands at about $100 USD at the indifference price point. | TMNT

📚 Investing

Peter Walker from Carta shows that about 50% of startups will get from Seed to Series A. | Carta

Andreessen Horowitz’s big ideas in tech for 2025. | Andreessen Horowitz

Ben Murray from The SaaS CFO discusses the "Ultimate SaaS Metrics Playbook." | The SaaS CFO  

 🌡️ Climate

A new study published in Climate & Nature Communications found that between 2009 and the start of the COVID-19 pandemic in 2020, global emissions from tourism grew by an average of 3.5% a year, double the rate of emissions in general. In 2019 tourism led to 5.2 gigatonnes of carbon dioxide—almost 9% of the world’s total. Of that, aviation accounted for the bulk (52%) of direct emissions. Utilities, such as the electricity used in accommodation, were the main driver (34%) of the indirect carbon emissions. That failure, in part, seems to stem from lobbying by airlines. Schemes meant to make them greener tend to be toothless: carriers can sometimes sidestep them entirely by using small amounts of sustainable fuel. Moreover, tourists typically behave in a more emissions-intensive way than at home, eating out, shopping and living the high life. Because their emissions come from so many sources, it is hard for countries to know how to account for it all. | The Economist ($)  

🚘  Car of the Week

Our Automotive Ventures "Car of the Week": a 1955 Ferrari 555 Super Squalo Chassis no. FL 9001. | Bonhams Cars

Have a great week,

Steve Greenfield