🗽Congestion pricing by the numbers
Vol 99
This newsletter aims to separate the signal from the noise for investment in all things sustainable transportation: Electrification, mode shift, active and public transit, and mobility aggregation, across both people and goods movement.
Thanks to all of you who reached out over the last dozen days about the devastating wildfires in LA. I am grateful to be safe and unharmed, but all of us in LA are grieving for those who lost so much and for the impact on our area.
This week’s Deep Dive is about what we’ve learned from two weeks of congestion pricing in NYC, one of the biggest mobility experiments in the US this century.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
Altrove (France): Synthesized manufacturing of critical minerals, including for EV batteries
ChargeBoat (California, USA): Maritime electric charging network
Deflect (New York, USA): Hardware solutions to improve fuel efficiency of rail operations
Dockflow (Belgium): Maritime logistics software for traceability and circularity
Mevco (Australia): Converts utility vehicles to electric for mining operations
Pawnee Mobility (Texas, USA): Hybrid-electric vehicles for the defense industry
Stralis Aircraft (Australia): Emerging manufacturer of hydrogen-powered aircraft
Webreathe (France): Software for public transportation, including passenger counting
Zero Homes (Colorado, USA): Software platform to help homeowners go all-electric including EV charger install
💰FUNDING: Capital raises from startups previously featured in Startup Watch
Moment Energy (Vol 48) raised a $15M Series A from Amazon Climate Pledge Fund and Voyager Ventures, as well as Version One Ventures, Overture Ventures, WovenEarth Ventures, MCJ, Climate Capital, and others
Metafuels (Vol 49) raised a $9M Series A from Celsius Industries, Energy Impact Partners, Contrarian Ventures, and others
Muon Vision (Vol 64) raised a $2.5M Seed Round from Azolla Ventures, Lamar Legacy LP, and Starshot Capital
Know someone who invests in climate and sustainbility?
📰QUICK HITS: Notable news from the last two weeks
👩🏽⚖️Government, Policies & Cities
🇳🇱 Amsterdam launched its zero-emissions zone on January 1. You love to see it.
🔋In Los Angeles, cleanup in wildfire areas requires a new skill set: learning how to dispose of damaged electric vehicles. Fires in ICE vehicles are much more common than in EVs, but EV fires are more difficult to extinguish.
🚆California has unveiled its statewide plan for electric passenger rail. This is mostly symbolic but does provide regional planning authorities with a sense of where state priorities are heading.
🫳 California has withdrawn multiple requests from the EPA for potential policies relating to zero-emissions truck fleets, zero-emissions ferries and zero-emissions trains. California consistently makes smart calculations about which battles are worth fighting in DC; the state will focus more on rulemaking that doesn’t require federal approval.
🇨🇳 The Biden Administration has a new rule that effectively bans Chinese cars on national security concerns related to software from “countries of concern.” For more context on this challenge, see the Deep Dive in Vol 41: The Next Cold War Is Already Here.
✈️ The Trump Administration’s choice for Secretary of Transportation, Sean Duffy, earned bi-partisan support during his Senate confirmation hearing. Duffy noted the need to give “tough love” to Boeing and suggested that EVs should pay for road use, given that the gas tax funds much of road spending.
☄️The Trump Administration’s choice for EPA, Lee Zeldin, seemed keen to align with the Supreme Court’s Chevron ruling. While the stance was expected, it’s tough to predict when, where, and how the Administration will roll back environmental protections.
Fun fact: Newsletter subscribers live in 49 US states.
🔬Markets & Research
📈 The International Council on Clean Transportation (ICCT) has its 2024 update on the zero-emissions vehicle transition. On a percentage basis of new cars sold, the US is not just trailing the EU and China, but also New Zealand, Vietnam, and Thailand.
🙈 ProPublica has a deep dive into the failures of The Boring Company in Las Vegas. I’ve used Vegas Loop multiple times and consistently find it underwhelming and disappointing.
🚌 New data from the US Federal Transit Administration shows a continued decline from the peak of public transit ridership since 2014. This report is a fantastic quantitative overview of the nation’s public transit system.
🏭 Corporates & Later Stage
🔌 EV maker Polestar is bracing for a rough 2025. The spinoff of Volvo Cars, itself a subsidiary of China’s Geely, may find that its China links close the door to the US market access.
🤷♀️ A video surfaced this week showing Tesla’s “self-driving” system unable to identify a train. While Tesla claims to be leading in self-driving vehicles, anecdotal insights and hard data suggest otherwise.
🚚 Amazon UK has announced the country’s largest purchase of electric heavy-duty trucks. The orders go to Mercedes and Volvo Group, not Tesla or startups.
🚲 Bosch is making e-bike batteries with remote disabling to deter theft. Ask any e-bike owner and they’ll tell you that theft is one of their biggest concerns when on the road.
👋 As part of a Honda-Nissan merger, Honda wants to buy out Renault’s 35.7% stake in Nissan. This would likely please both Renault and Nissan.
🏦 The DOE Loan Program Office finalized its $6.6B loan guarantee to Rivian to build a factory in Georgia, as well as a $1.7B loan guarantee to clean hydrogen startup Plug Power and a $1.7B loan guarantee to Montana Renewables for sustainable aviation fuel production. Whether the DOE Loan Program office undertakes any new loan guarantees under the Trump Administration is anyone’s guess.
🐣 Startups & Early Stage
🤖 Self-driving heavy-duty truck startup Aurora is suing the US federal government over a rule that requires warning triangles on the road when a semi is stopped on the side of the road. With the automation of driving, some rules will inevitably have to change.
💰Medium-duty EV truck maker Harbinger raised a $100M Series B. That’s a nice vote of confidence.
💧The board of hydrogen-truck startup Hyzon has voted to dissolve the company. Hydrogen’s window of opportunity to be a fuel in surface transportation is closing.
🚁 eVTOL startup Beta Technologies now has 46 charging sites live across the US. Charging networks may end up being strategic for airports and flight operators in the same way that the charging network serves a vital strategic advantage for Tesla.
🚗 Swiss startup Microlino has announced plans to bring its microcar to the US. While microcars/kei cars are having a moment in the US, oversized cars and trucks are having a much bigger moment.
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DEEP DIVE: CONGESTION PRICING BY THE NUMBERS
Two weeks ago, after almost two decades of preparation, NYC made history by launching the first zone-based congestion pricing mechanism in the US.
How long it will last is anyone’s guess. Republican lawmakers have met recently with Donald Trump to push for its reversal. Given that the new Administration starts tomorrow, now is as good of a time as any to quantify the impacts of congestion pricing in NYC.
When evaluating the impact of congestion pricing, you hope to see at least two different things:
A reduction in the number of people using private cars, with a commensurate increase in usage of public transit, micromobility, and active transit.
Improved service within the zone with faster and more predictable travel times. Public support often comes down to “well, sure, it costs me a bit more, but the travel times are so much faster.”
On both accounts, the early signs with one full week of data are good.
In terms of traffic reduction, early signs are that we’re seeing just over a 7% reduction in vehicles. That’s good, but not as strong as what London saw (14% in year one) and below the gold standard of 20%. The plan had initially foreseen a $15 fee, but Governor Hochul launched a watered-down version with a $9 fee. Greater reductions will likely be seen if and when the fee increases to $12 in 2028 and then $15 in 2031.
Service within the zone is dramatically improved over the baseline, both in terms of how much time it takes to enter the zone from, say, the Holland Tunnel or Lincoln Tunnel, and by how much time it takes to traverse the zone.
As congestion pricing continues, expect several business implications:
Growth in last-mile logistics via micromobility, as delivery services bypass the use of vans
A boost for so-called Blue Highway efforts to shift goods movement toward maritime
Heightened value from mapping, real-time traffic information, and routing algorithms that differentiate by vehicle type, time of day, etc.
A shift in both B2B and B2C deliveries to after-hours, taking advantage of off-peak congestion pricing, through solutions like parcel delivery lockers
Uptake in leasing, usage, and ownership of micromobility by commuters
Increased use of measurement, verification, and enforcement software
Growth in mobility aggregators that help commuters plan and pay for variable commutes
NYC is America’s most transit-oriented city. May congestion pricing in NYC keep shining a path for other American cities about car ownership as an option rather than a necessity.
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Thanks for another great piece, Alex. ANd Microlino’s entry is intriguing, but America’s obsession with oversized vehicles makes this a tough sell. Will urban congestion force a cultural shift?