China EVs rising, Tesla loses profit ground and Lyft preps for deep cuts
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If there was any doubt that China is a leader in EVs, the Shanghai Auto Show should have erased those thoughts. China is developing and producing compelling EVs and reaping the sales as a result. (Eight of the top 10 best-selling EV models in China are from Chinese automakers.)
And unlike the U.S. market, these are not just premium and luxury brands that only a slice of society can afford. BYD, the Warren Buffet-backed Chinese automaker, unveiled its Seagull EV during the show and the unassuming vehicle attracted some of the largest crowds at the show. Industry watchers believe that this vehicle , which starts at 78,000 yuan ($11,300), is poised to become the top-selling EV in the country.
China is already the world’s biggest market for EVs. But as the Financial Times noted in its coverage of the auto show, China is also set to push Japan out of the top spot for global car export volume this year after overtaking Germany in 2022.
This development creates a two-fold challenge for foreign automakers. After years of dominating the premium and luxury market in China, foreign brands Buick, BMW, Mercedes-Benz and others are facing homegrown competition. And now that China is exporting its vehicles to Europe, these same automakers are facing pressure in their own territory as well.
To be clear, I don’t expect Chinese brands to make a big play for the U.S. market just yet. But I am closely watching how these brands fare in Europe.
Some of our Shanghai Auto Coverage:
• Chinese luxury EV brand Zeekr expanding to Europe by end of 2023
• The Polestar 4 replaces a rear window with a high-def screen
• Luminar wants to light up China’s smart vehicles
• XPeng’s G6 SUV aims to be a premium EV for the masses
• Volkswagen pumps 1B euros into China electric vehicle center
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Acer’s Ebii is an AI-assisted e-bike with sci-fi vibes. It’s got an onboard brain that adapts to riding conditions, has a rear collision warning radar sensor, an integrated headlight and taillight that turns on automatically at night and crash detection built into the app. All that, plus 70 miles of range. It’ll launch in Europe starting September for €1,999 ($2,194).
Arcimoto is seeing another leadership shuffle. Board member Chris Dawson is replacing interim CEO Jesse Fittipaldi, who will stick around as president and report to Dawson going forward.
Austin is providing rebates of up to $600 on e-bikes bought by Austin Energy customers.
Curtis Motorcycle Co. introduced The 1, its debut electric two-wheeler that it’s calling the “Tesla of Motorcycles.” Only for $120,000, that’s around three times the cost of a Tesla Model 3. I’ll grant, it’s a pretty bike — part retro, part Mad Max. And it has a range of 120 miles for highway riding, 75 miles for city cruising. I’d be curious to see what, if anything, could possibly warrant such a price tag.
Electric Bike Company launched the Model J, a small, nimble, moto-inspired e-bike with a reasonable limited time price tag of $1,199. Built in California, the bike has a minimalist hipster feel about it — a colorful matte aluminum frame with a leather seat and option for wooden trimmings. That and a battery range of up to 200 miles make it an attractive deal.
Gazelle’s new line of e-bikes are aimed at commuters and casual long-distance riders. They’ve got stepless (or automatic) gearing that puts the assist at the right level for the rider at that time.
Gogoro is working with Enel X to add its battery swapping stations in Taiwan to Enel’s virtual power plant network.
Lyft pretty much has a monopoly on bike share in U.S. cities. But the company is struggling to stay afloat and has had to make drastic cuts to programs and staff to stay in the ride-hail game. (And Friday the company’s new CEO said more cuts are coming.) Curbed digs into the potential consequences of one tech company controlling bike share.
Neuron found in a recent study that 5% of riders have a disability or mobility impairment and use e-scooters to overcome pain and other issues on their daily commutes.
Swapfiets, a Dutch micromobility subscription service, has introduced a fast-charging, heavy-duty e-bike for delivery workers.
Unagi has secured Best Buy as a partner to sell its e-scooter subscriptions.
Deal of the week
Startups in the ground transportation business have another source of funding to chase: Autotech Ventures has closed a $230 million fund.
The $230 million fund, its third since launching in 2017, will be used to invest in seed through Series C mobility-related startups, according to the company. A mixture of financial and corporate LPs, including Allison Transmission, American Axle, Iochpe-Maxion and Shell participated in the fund.
The VC firm is still sticking to its early-stage ground transportation startup roots. But the firm’s investors are expanding that strategy and going after what they believe are the next big opportunities in automotive and mobility.
Fintech, logistics, supply chain and the circular economy are at the top of the list.
Other deals that got my attention this week …
ChargeLab, an EV charging software management startup based in Toronto, secured $15 million in new financing to their Series A, doubling funds previously raised and bringing the round’s total to $30 million. The expansion included $10 million in new equity financing and $5 million in venture debt. The company’s first Series A tranche of $15 million led by King River Capital was previously announced in May 2022.
Cowboy successfully raised €1 million ($1.1 million) in two days through a crowdfunding campaign.
Evermile, a local delivery platform built for small businesses, raised $6 million in a seed funding round led by 10D. Mensch Capital Partners also participated.
Miovision Technologies, a Canadian traffic management technology company, acquired Global Traffic Technologies LLC from Vontier Corp. for $107 million. GTT-developed technology allows emergency vehicles and transit to trigger traffic signal changes. Miovision also raised $260 million in a funding round led by Telus Ventures with participation by Maverix Private Equity and Export Development Canada.
Novalith Technologies, an Australian startup that has developed a novel lithium extraction method, raised A$23 million ($15.4 million) in a Series A funding round led by Lowercarbon Capital. The Clean Energy Finance Corporation (CEFC), the Grantham Environmental Trusts’ Neglected Climate Opportunities Fund, TDK Ventures and Investible also participated.
Skarper, a London-based company that developed technology to convert bikes into e-bikes, raised nearly $5 million in a round led by the Starry Group and Mobilitech Capital.
SK On, a South Korean battery maker, could raise 1.5 trillion won ($1.1 billion) from BlackRock, Singapore-based Hillhouse Capital, Qatar Investment Authority, North Asia-focused MBK Partners and other financial investors. The deal would give the consortium a 5% stake in SK On.
Whisper, which developed a quiet and efficient electric propulsion device for eVTOLs and delivery drones, raised $32 million in a Series A round led jointly by Menlo Ventures, EVE Atlas, Capricorn’s Technology Impact Fund and Connor Capital. Additional participation came from Kindred Ventures, Abstract Ventures, Moving Capital, AeroX Ventures, Cosmos Ventures, Linse Capital and LaunchTN, a public-private partnership with the state of Tennessee.
Notable reads and other tidbits
Tesla scored a victory after a California jury determined the automaker was not to blame for a 2019 crash that involved its advanced driver assistance system, known as Autopilot. The jury awarded no damages to Justine Hsu who sued Tesla in 2020.
Apollo Go, Baidu’s robotaxi service, has hit some milestones recently. The service now has more than 100 fully driverless vehicles operating in Wuhan, and in 2022, the company doubled its active users, with some riders taking nearly 1,000 trips.
Kodiak Robotics is partnering with truckload carrier C.R. England to autonomously haul Tyson Foods products between Dallas and San Antonio, Texas. (A human safety operator is still behind the wheel.)
Uber is expanding its partnership with sidewalk delivery robot startup Cartken to Fairfax, Virginia.
Electric vehicles, batteries & charging
BorgWarner will invest $42 million into the expansion of its Seneca, South Carolina production facility, including the development of new manufacturing lines to launch the production of 3GWh of annual battery module capacity.
Bugatti is getting ready to go electric.
Einride is expanding to the U.K. Its first U.K. deployment will be in partnership with PepsiCo snack-food subsidiary Walkers, which will use Einride’s trucks and platform to deliver goods between the cities of Leicester and Coventry.
Jaguar Land Rover has rebranded to JLR with four main brands: Defender, Discovery, Jaguar and Range Rover. Yup, that’s right, you did not see the Land Rover in there. The company is also continuing its push into EVs. The first car under the Jaguar brand will be a four-door electric GT with a range of about 435 miles (under WLTP) and a more than $124,000 price tag.
On a side note: JLR also selected Elektrobit to supply its software platform and automotive OS for its next-gen EVA Continuum electrical architecture that will come to JLR’s full line of vehicles beginning in 2024.
The U.S. Treasury updated its list of electric vehicles eligible for a $7,500 EV tax credit per its new rules for battery sourcing. It initially appeared that Rivian would lose the entire tax credit. The EV company clarified that current model year 2023 R1T and R1S vehicles qualify for $3,750 in federal tax incentives, as the batteries are compliant with the critical mineral sourcing requirements passed in the Inflation Reduction Act.
Tesla kicked off Q1 earnings season on a bit of a down note. The company’s EV price-cutting strategy boosted sales, but at the expense of profits. Tesla earned $2.51 billion in net income in the first quarter, a 24% drop from the same period last year.
Tesla has repeatedly reduced the price of its four EVs — the Model S, Model X, Model Y and Model 3 — in the United States as well as Europe and China (including the day before earnings). That strategy has helped push revenue in the first quarter to $23.3 billion, a 24% pop from the same period last year. But it has also squeezed the automaker’s traditionally robust automotive gross margins.
Aston Martin appointed Ferrari’s former chief manufacturing officer Vincenzo Regazzoni to the newly created position of chief industrial officer and Giorgio Lasagni as chief procurement officer.
Hyzon Motors named Dr. Bappa Banerjee as chief operating officer effective May 1, 2023. He was most recently vice president of mining equipment at GE Transportation.
Lyft is about to make some deep cuts to its workforce — as many as 1,200 people, or 30%, according to WSJ, which cited unnamed sources. We know the layoffs are coming, per an email sent to employees by newly appointed CEO David Risher, who informed them that the company is “significantly reducing its workforce” as part of a restructuring effort.
Risher said the restructuring is part of Lyft’s plan to “better meeting the needs of riders and drivers.” That’s code — at least for me — that other programs and services outside of ride-hailing will be axed. What’s less clear is how this might affect its bike-sharing service.
Redwood Materials hired Cal Lankton (former Tesla exec focused on energy sales/infrastructure and most recently Lyft’s EVP of fleet and global ops) as its chief commercial officer, per his post on LinkedIn.
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.