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Hello readers: Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.
Wow, there was a lot this week, which means I am omitting the “notable news and other tidbits” section this time around. One other note … I had promised a breakdown of a lengthy interview with Kodiak Robotics co-founder and CEO Don Burnette this week. With all the GM news and other deals, I’ve pushed to next week to allow for the space it deserves. Sorry folks!
Here is one noteworthy item that might normally go in that notable news section: Tesla has made Austin its new headquarters. The news, which was announced during Tesla’s shareholder meeting Friday, comes more than a year after CEO Elon Musk threatened to leave California and filed a lawsuit against Alameda County amid a battle with the state over its regulatory environment during the pandemic.
It seems, at least based on Musk’s comments, that the reasons for the move are more about affordable housing, the ability to expand and commuting time for workers than his clash with California health officials last year.
It should be noted that Texas certainly takes a less restrictive approach to business than say California. Of course, Texas still doesn’t allow direct sales in the state that Tesla has now decided to call home.
As always, you can email me at email@example.com to share thoughts, criticisms, opinions or tips. You also can send a direct message to me at Twitter — @kirstenkorosec.
Let’s get right to it this week, shall we?
Israeli shared multimodal mobility operator GoTo Global Mobility has acquired German shared electric scooter company emmy. They didn’t share the financial terms of the deal, but the acquisition will allow GoTo easy entry into German markets like Munich, Hamburg and Berlin. GoTo plans to bring other forms of mobility, like e-bikes and cars, to Germany by next year. The company says car-sharing is a great addition to shared micromobility because it creates a full mobility ecosystem that results in loyal customers and better unit economics.
Tortoise, the company that’s working with Spin to remotely rebalance Spin’s three-wheeled scooters, has made a strong pivot to remotely operated delivery vehicles over the past few months. The latest is a deal with King Retail Solutions to resell and distribute over 500 of Tortoise’s sidewalk robots to help convenience store customers achieve affordable, same-day last-mile delivery options.
Speaking of Spin and its three-wheeler, the company just deployed a fleet of 50 tri-scooters in Santa Monica. The S-200 gives riders better stability than a traditional 2-wheeler, according to Spin, 500 of which have also hit the streets in SM.
Swedish electric motorbike maker Cake has created and delivered the first batch of purpose-built electric anti-poaching bush bikes to Africa. The Kalk AP, complete with 18-inch custom off-road tires, a rear carrier to attach arms or medical equipment and a first aid kit to treat wounded animals, was delivered to rangers who will test the bikes under the R&D department of the Southern African Wildlife College.
E-bikes are still all the rage
From July 2020 to July 2021, U.S. e-bike revenue skyrocketed 240% YOY, according to NDP Group. Other cycling equipment only increased 15% in the same time frame. E-bikes are now the third largest cycling category in terms of sales rev.
Which makes this the perfect time for Radio Flyer to launch its first line of electric bikes and scooters, which are now available for preorder and should officially arrive later this month. Flyer products were designed with adults and their many needs in mind, so there are plenty of attachments like child seats and cargo carriers. The bikes start at $1,699.
Meanwhile in Brazil, micromobility tech provider Tembici has just raised $80 million in a Series C. It will use the money to expand its fleet and its footprint into new cities, as well as accelerate its new business line focused on e-bike delivery.
Even Volkswagen gets it. Employees at VW’s Wolfsburg plant will now get to pilot a new network of cycle paths around the plant and to the factory gates and parking lots. Employees who live in the factory environment have been campaigning to come to work by bike instead of car for years, so it’s nice to see VW take action. The company hopes to be able to expand the pilot project in the future.
— Rebecca Bellan
Deal of the week
Another day, another transportation IPO announcement. This time, it is Swedish carmaker Volvo Cars, which is owned by China’s Zhejiang Geely Holding. Volvo Cars said it would file for an initial public offering and list on the Nasdaq Stockholm exchange, in a transaction that’s expected to raise up to $2.9 billion (25 billion Swedish kroner).
The IPO is interesting on its own. But what I find so intriguing is that just the week before, Volvo Cars’ electric performance spinoff Polestar announced its own plans to go public via a merger with a special purpose acquisition company. It seems likely that the timing is not a coincidence; according to WSJ reporting, the Polestar SPAC assigned a value of around $10 billion to Volvo’s stake in the company, paving the way for Volvo’s IPO.
Other deals that got my attention this week …
Arbe Robotics, a radar startup that merged with a special purpose acquisition company, made its public debut October 8 on the Nasdaq exchange. The company is trading under the “ARBE” ticker symbol. On the first day of trading, Arbe shares opened at $7.95 and closed at $8.10.
Northvolt is investing $750 million to expand off of Northvolt Labs, its existing cell industrialization plant in Sweden. The plan is to build adjacent testing facilities and a pilot recycling plant, which will feed recycled raw materials directly into on-site production. The company wants the campus, which will eventually employ 1,000 people, to become a leading center for battery technologies.
Otto, a Dallas-based fintech startup that wants to allow people to use their vehicle’s equity for access to credit, raised $4.5 million in a seed round of funding led by Uncommon Capital and included participation from Pelion Venture Partners, 1930 Capital, Bloom VP and Spacecadet Ventures. Other investors include Mark Cuban, entrepreneur and Shark Tank investor; Leo Polovets, co-founder and general partner at Susa Ventures; Bill Clerico, co-founder and CEO of WePay; and Vivek Garipalli, co-founder and CEO of Clover Health. Otto’s mobile platform is set to launch in early 2022.
Ouster, a lidar company that went public this year via a SPAC merger, agreed to acquire solid-state lidar startup Sense Photonics in an all-stock deal valued at around $68 million. Ouster said it will establish a new business arm, Ouster Automotive, which will be headed by Sense CEO Shauna McIntyre. That business will integrate Sense’s 200-meter range solid-state lidar into a new lidar suite. San Francisco-based Sense’s claim to fame is also its improved field of view, as ProWellTech’s Devin Coldewey has previously explained.
Qualcomm scored the purchase of Swedish automotive tech company Veoneer, nudging out Magna International with a higher bid. Qualcomm and investment group SSW Partners will acquire Veoneer for $37 per share in an all-cash transaction. At closing, SSW said it would sell Veoneer’s Arriver tech — an advanced driver assistance system stack that includes sensors and software — to Qualcomm and retain the Swedish company’s other Tier 1 supplier businesses. Veoneer had previously agreed to sell itself to Magna.
Rendered.ai, a two-year-old data startup that is generating synthetic data for the satellite, medical, robotics and automotive industries, raised a $6 million seed round led by Space Capital, with participation from Tectonic Ventures, Congruent Ventures, Union Labs and Uncorrelated Ventures.
Tekion, the end-to-end automotive SaaS platform startup launched by Tesla’s former CIO, raised $250 million in a Series D financing round co-led by Alkeon Capital and Durable Capital. Other investors include Hyundai Motor Company, several dealer groups across the U.S., and earlier backers Advent International, Index Ventures and FM Capital. The round has pushed the company’s valuation from $1 billion to $3.5 billion. It has raised a total of 435 million.
Tenstreet, a truck driver recruiting software company, is now majority owned by private equity firm Providence Equity Partners. Existing investor Spectrum Equity and Tenstreet Co-founder and CEO Tim Crawford will maintain their minority stakes.
TruckLabs, a Stanford spin-out that has developed hardware and software to reduce fuel consumption in long-haul trucks, raised a $15 million Series A round co-led by returning investors Calibrate Ventures, Autotech Ventures, and Uncork Capital. To date, TruckLabs has raised $24 million.
Volcon, an all-electric off-road powersports company, closed its initial public offering of 3,025,000 shares of common stock at a public offering price of $5.50. The gross proceeds of the offering were $16.6 million before deducting underwriting discounts,
commissions and offering expenses. The company is trading on the Nasdaq exchange under the symbol “VLCN.”
Voom, the commercial drone insurer, has raised $15 million to expand its usage-based insurance model to motorcycles, light aircraft, ride-hailing and delivery drivers. The funding round was co-led by JAL Ventures and UP.Partners, with participation from F2 Capital, Arbor Ventures, Verizon Ventures and ICON Continuity Fund. The company, which launched a pay-per-mile insurance product for motorcycles in August, has raised a total of $22 million.
Zaver, a Swedish fintech startup that built a platform that lets merchants accept cardless payments and offer buy-now-pay-later as an option, raised $13 million in a Series A round.
ZF signed a strategic partnership agreement with autonomous vehicle software company Oxbotica to develop a Level 4 self-driving system that will initially be deployed in passenger shuttles in major cities around the world, the companies said.
Zūm, a startup that provides optimized transportation services for school-age children, raised $130 million in a Series D round led by Softbank Vision Fund 2 with participation from existing investors including Sequoia, BMW i Ventures and AngelPad. The company intends to use the funds to add 10,000 new electric buses, vans and cars to its platform with the end goal of achieving 100% EVs by 2025. Currently, the company’s fleet has 1,000 vehicles, and they’re mainly all internal combustion engine vehicles.
The jumping off point for this week’s column comes from Cruise CEO Dan Amman, who gave a presentation Wednesday at General Motors’ two-day investor event. There was sweeping series of briefings from the automaker — news that’s worth catching up on further down in this newsletter — but not what I want to talk about here.
Instead, I want to focus on what Amman said regarding commercializing Cruise: “Over the next 12 to 24 months, you will be able to push a button and get a ride with a very short ETA in a couple of major cities in the United States,” said Ammann. “If you look at the next three to four years, we will be deployed in multiple cities, multiple markets around the U.S.”
What I’m curious about is… how many people would actually get in an autonomous vehicle? Not just today, but a year from now, or five? The answer to this question is, predictably, a complicated one. Let’s look at two recent polls from the market research firm Morning Consult. The first polled 2,200 people at the end of August; the second, the same number at the beginning of September.
The second poll found that only 25% of people surveyed would be ready to get in an AV this year or next; but that number jumps to 53% when the timespan is extended to the next five years. Only 27% of people said they would “never be ready” to ride in an AV. This is in line with the first poll, which saw slightly improved attitudes regarding AVs.
Morning Consult also asked people whether they had heard of the National Highway Transportation and Safety Administration’s probe into Tesla’s Autopilot — a little annoying, because Autopilot is not an autonomous driving system, but I understand why they did it: the public doesn’t have much of an understanding of the difference, and Tesla’s CEO Elon Musk does little to help the matters by naming the upgraded version of Autopilot “Full Self Driving.”
The good news, for AV developers at least, is that public opinion is getting higher over time. Based on a roundup of public opinion poll results from Advocates for Highway Safety, there appears to be a slight trend over time of people moving from the ‘Never’ camp to the ‘Maybe’ camp, when asked whether they would ever ride in an AV.
The biggest drivers for this shift in public support, also according to polls, seems to be greater education in AV technology, visibility and government regulation. A poll conducted by Partners for Automated Vehicle Education found that more than half of respondents would trust AVs more if they had to receive government approval similar to a driver’s license for humans.
Humans are leery of robots for a whole host of reasons, some more rational than others, but what this suggests to me is that the race to autonomous vehicles will be more tortoise than hare: slow and steady wins the race.
— Aria Alamalhodaei
GM investor day roundup
As Aria mentioned above, General Motors held its two-day investor event, in which a slew of announcements and forecasting took place. The bottom line: GM plans to double its revenue by the end of the decade and take over EV market share from Tesla, even as it increases profit margins for its ICE vehicles. In total, that looks like $280 billion in annual revenues by 2030.
The upshot: GM talked a lot about selling software-based services and subscriptions, as well as a range of “really affordable EVs for the people,” like the Chevy Silverado pickup. GM CEO Mary Barra said GM hopes to attract would-be Tesla customers with good prices, customer loyalty, strong manufacturing capacity and a wide dealership network.
Here’s a complete breakdown of announcements:
Supply chain strategies
After all the drama with semiconductor shortages and spontaneously combusting batteries causing factory delays, abysmal Q3 sales and car recalls, GM will need a good logistics strategy to kick this off.
The company signed a memorandum of understanding with General Electric for the supply of rare earth materials needed to manufacture EVs and clean energy equipment. The agreement is non-binding and will also explore ways to improve supplies of magnets, copper and “eSteel,” a material composed in part of recycled materials. This move is en vogue among automakers looking to control the supply, and GM stands to lose a lot from being at the mercy of an unpredictable supply chain.
More money for charging
You can’t have a bunch of EVs hit the market with nowhere to charge them, so GM also announced an investment of nearly $750 million through 2025 to create more access to public, home and work EV chargers. The automaker didn’t provide specifics on exactly where that capital would go. Will it go towards building out its own infrastructure or put towards partnerships? Maybe the latter. Last year, GM announced a partnership with EVgo, a charging network company, to install more than 2,700 DC fast chargers over five years.
New ADAS tech
GM is also launching a new hands-free advanced driver assistance system in 2023 called Ultra Cruise, that it says will work in 95% of all driving scenarios. Ultra Cruise will first be released in the Cadillac models and then in other GM brands like GMC and Chevrolet. GM did not stipulate whether the new system will sell for a flat fee or as a subscription. But based on executives comments about subscriptions, we’re expecting this too will be a pay-for-access feature.
Subscriptions = revenue
GM said it expects in-car subscriptions to put it in league with Netflix and Spotify in terms of revenue by 2030. GM expects in-car subscriptions like OnStar and Maps+ to generate nearly $2 billion in revenue this year, which it says could reach as high as $25 billion over the next decade. The company is beefing up subscriptions offerings, particularly to commercial fleets that might be interested in logistics and analytics services. The launch of its Ultifi software platform in 2023 should help boost subscriptions.
Finally, GM’s autonomous driving subsidiary, Cruise, said it expects to get “tens of thousands” of its purpose-built Origin AVs on U.S. roads over the next few years, even though production won’t start on the Origin until 2023.
The company, which is but a permit away from being able to launch a commercial driverless robotaxi service in San Francisco, is counting on technological advancements, a $5 billion line of credit from GM Financial and a human-less business model to help it scale rapidly and profitably across self-driving ride-hail and delivery.