🐘 Are Republicans Coming Around on EVs?
Vol 53
This bi-weekly newsletter aims to separate the signal from the noise for making money in sustainable transportation: Electrification, mode shift, active and public transit, and mobility aggregation, across both people and goods movement.
In personal news, I’ve been selected to join the newest cohort of Recast Enablement, a training program to empower the next generation of venture capitalists with guidance on firm-building and fundraising. Feel free to message me for more info.
Upcoming conference alert: CoMotion MIAMI’23 (May 10-11) connects the Americas & beyond with Florida’s future-forward spirit. The unmissable two-day gathering is packed with lively panels, interactive workshops, demos, networking sessions, and energizing talks. Get your passes now! Use code SUSTAINABLEMOBILITY25OFF to get 25% off your ticket here.
Submit startups & ideas for the newsletter here.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
Avol Aerospace (New York, USA): Autonomous electric cargo aviation for inter-island travel
CarbEngage (California, USA): Software for developers and contractors to develop EV install proposals
Crux Climate (New York, USA): Marketplace for cleantech tax credits
Mercado Bici (Mexico): Micromobility fintech platform providing access to consignments and buy now/pay later
Morelle (California, USA): New e-bike brand from Gary Fisher, the legend of mountain biking
OK2Charge (Florida, USA): EV charger network for multi-tenant dwellings
Pionix (Germany): Open source software-as-a-service for charging stations
Propitious Technologies (Arizona, USA): Tier 1 manufacturer of power-generating suspensions for medium and heavy-duty vehicles
VamosPasajes (Ecuador): Bus booking and ticketing platform
WingDriver (Michigan, USA): Smartphone-based driver monitor system
💰FUNDING: Capital raises from startups previously featured in Startup Watch
Jatri (Vol 9) completed a $5.2M Series A from SBK Tech, ALSA, Genting Ventures, and others
Hyperspec (Vol 19) raised seed funding from StratMinds (amount undisclosed)
GAFT (Vol 44) won a $2.5M grant from the European Innovation Council Accelerator
Reminder: The startup data set is open, for free to subscribers. If you’re a subscriber interested in accessing the Airtable with all the raw data on 350+ companies, please let me know.
📰QUICK HITS: Notable news from the last two weeks
🏭 I’m quoted in this Forbes article on whether European corporations are better at the implementation of the US Inflation Reduction Act than their American counterparts (non-paywall access here). My answer: yes, they are.
🔌 Also featuring a quote or two from me: Does Enel have a shot at taking on Tesla in the US charger market?
🤖 San Jose announced plans to connect its airport and rail hub via autonomous pods. While novel, it’s not clear that this would be better than a traditional transit solution.
🚇 Chicago’s transit network is still struggling to return to pre-COVID levels. It’s a common challenge across the country, as American commuters have taken a decidedly different post-COVID office approach than their European or Asian counterparts.
🚎 Related: a new Moody’s study shows that metro areas with shorter commute times have lower office vacancy rates. A good reason to help get American transit networks like the Bay Area and Chicago out of their downward spiral.
🗼How did Tokyo become so car-free? In short: narrow streets, high parking fees, and toll roads.
🇳🇱 Dutch city Utrecht is inching closer to the launch of a neighborhood without privately owned cars. This is a scenario where it’s easy to see car sharing actually being profitable (article in Dutch).
🚁 Paris is moving to get air taxi service ahead of the 2024 Olympics. Using a 290kg (640lb) vehicle to fly only one passenger isn’t sustainable mobility, even if it is electric.
🇰🇪 Kenya is quickly becoming the e-mobility hub for East Africa. Kenya’s more robust private investment market has helped solidify its early lead over Tanzania, Rwanda, and Uganda.
🚚 The Dutch government opened up subsidies for electric and hydrogen trucks, with a final tally of 1,600 for electric and 0 for hydrogen. While an embarrassment for the hydrogen industry, this is a long game, and hydrogen deployment may indeed accelerate in due course.
🐻 California is moving closer to mandating bidirectional charging for EVs. This could be a game changer in the US, especially if other states or the Federal government follow suit. This could unlock huge amounts of electric grid buffering capacity, but will likely only happen if the automakers are incented or forced to participate.
💸 The US government belatedly revealed which EVs qualify for the new Inflation Reduction Act (IRA) tax credit, with Rivian and VW as late additions to the list. In contrast to other IRA credits, this still feels like “we’ll let you know when you qualify” rather than “this is the precise eligibility criteria.”
🇬🇧 Tata’s Jaguar-Land Rover (JLR) unit announced its electrification plans. JLR has no choice but to build EVs in the UK, while most of its peers have opted to deprioritize all UK manufacturing in favor of EU factories.
👨🏽🏭 Foxconn is getting closer to producing its white-label EV in Ohio. This is going to be quite the long-term challenge for lesser mainstream carmakers like Mitsubishi.
🧂Chinese automakers BYD and JAC have unveiled their first car powered by sodium-ion batteries. Western automakers were slow on the lithium-ion to LFP transition and look likely to be laggards on the sodium-ion alternative as well.
🤲🏽 Rivian will open its charging network to other car manufacturers. As with the same decision by Tesla, the ability to tap into government funding with an open network was likely decisive.
🚕 Former Lyft COO thinks finding a buyer will be tough. Yet another voice saying that a DoorDash combo makes the most sense.
🚉 A team of California entrepreneurs is trying to revive night trains between LA and San Francisco. Night trains are being revived across Europe; this is the first revival attempt I’ve seen in the US.
🛫 A new report from the World Economic Forum and McKinsey analyses the potential of battery electric and hydrogen flight. This is a great quantification of some of the insights from the Deep Dive in Volume 50.
🛬 China’s CATL announces batteries designed for aviation. No announcement on price, but given CATL’s market leadership, this is one worth following.
DEEP DIVE: Are Republicans Coming Around on EVs?
Just over a week ago, the Biden administration proposed new EPA emissions standards for vehicles, which could result in EVs being 2/3 of cars sold by 2032.
Given the political divide in the US, you might expect fierce Republican pushback. So far, however, Republican opposition focused on the need for permitting reform. (While Republicans want permitting reform to speed up oil and gas projects, Democrats acknowledge that permitting reform is needed to get renewable and battery projects moving faster.) Could it be that we’re slowly migrating to a place where Republicans and Democrats aren’t in complete opposition on the topic of EVs?
The political gap between the two parties on EVs is real, even in California. While California is an anomaly on many fronts, including wealth and population, it is not a political monolith: Biden lost to Trump in over 40% of the counties in California.
And indeed, there is a strong relationship between how the county voted in the 2020 Biden vs Trump election and what percent of light-duty vehicle sales in the first quarter of this year were plug-in.
For the stats wonks among you, the R² for the above is .64, which is higher than the R² of .58 when EV sales are plotted against per capita income! (Incidentally, we have multiple counties in California where over one-third of Q1 sales were plug-in! Anomalous counties to be sure, but progress nonetheless).
So with sales results like this, why might the Republican party gradually come around on EVs?
Elon Musk, who runs the largest EV carmaker in the country, is now outspoken in his alignment with Republican issues.
Price: Tesla has cut the price of the Model Y five times in three months; the base price is now almost $4K below the average vehicle transaction price in Q1.
New product: Ford is still struggling to keep up with demand for the electric F-150 Lightning pickup and the muscle car tradition will live on with the upcoming Dodge Challenger electric. EVs are now a lot more than just luxury sedans.
Investments inspired by the Inflation Reduction Act are more often going to Red or Purple states than Blue states. The biggest winners of energy investment dollars since the passage of the IRA have been, in order, Georgia, Tennessee, Michigan, South Carolina, Texas, and Ohio.
It will be a slow change and it won’t happen overnight. But there’s no reason that both parties shouldn’t align further on support for EVs, even if their underlying motivations diverge.