This bi-weekly newsletter aims to separate the signal from the noise for making money in sustainable: Electrification, mode shift, active and public transit, and mobility aggregation, across both people and goods movement.
Next week is LATech Week and I’ll be at events focused on climate, mobility, and meeting founders (including at this event). Let me know if you’ll be around.
Also, I’m excited to announce a partnership with The #CitiesFirst Podcast. The #CitiesFirst Podcast will be joining forces with Su$tainable Mobility on upcoming events and announcements. Be sure to subscribe here.
This week’s Dive Dive is a Memo to the Human Resources Department about how microeconomics meets would-be rapper Bhad Bhabie. Really.
Submit startups & ideas for the newsletter here.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
Blue5PL (Mexico): Cross-border shared truckload logistics to reduce emissions
Electriflow Finance (California, USA): Multi-channel EV network subscription as dealer point-of-sale tool
Fest Auto (Singapore): Manufacturer of light-duty electric vans
Kleanbus (United Kingdom): EV bus retrofits
Loewi (France): Refurbishing and retailing used micromobility
OnCharge (United Kingdom): Overnight charging for electric van fleets via battery swap
Telematica (California, USA): Single API to connect and control energy hardware like EVs, home chargers, and other hardware
Tempo (California, USA): Subscription solution for micromobility brands
Urban Ray (Germany): Last-mile delivery by drone
zero44 (Germany): Software solution for maritime to track and report carbon emissions
💰FUNDING: Capital raises from startups previously featured in Startup Watch
ZParq (Vol 30) raised a $2.7M Seed round from Santander, Almi Invest GreenTech, and EIT InnoEnergy
Shovels (Vol 50) raised a $1M pre-Seed round led by Coelius Capital
Pionix (Vol 53) raised a $5M Seed round from Axeleo Capital, Mobility Fund, Pale Blue Dot, Vireo Ventures, and Yabeo Capital
📰QUICK HITS: Notable news from the last two weeks
👩🏽⚖️Government, Policies & Cities
🇧🇪 Brussels is becoming a case study for American cities on how to kick addiction to private car usage. Success here was a combination of smaller measures rather than the big bang approach of London’s congestion pricing.
🇫🇷 France made good on its environmental policy to ban short-haul flights that can be better served by high-speed train. Lots of larger countries with dynamic rail networks will likely consider this at some point.
🦁 Lyon, France will issue parking permits based on vehicle weight. Last issue it was a neighborhood in Montreal, this issue it’s France’s second-largest city. Keep an eye out for this trend to accelerate.
🇨🇭Protests against private jets continue, including shutting down the Geneva airport for an hour. The pressure will only rise until private jets go zero emissions.
🏚️ In the US, Amtrak is struggling to deploy higher-speed trains for Acela. A cautionary tale of marrying 21st-century trains with 19th-century tracks.
📰 In Los Angeles, the LA Times editorial board is advocating for the nation’s second-largest city to follow New York in implementing congestion pricing. For a refresher on congestion pricing, see Volume 49.
⚓️ How do you decarbonize massive ports like Los Angeles and Long Beach? Via a three-phase approach: electrify ground handling equipment first, then force drayage to go zero-emissions via electrification or hydrogen, and then figure out the ships.
🔬Markets & Research
🛴 New research shows that low caps on e-scooter speeds result in more sidewalk riding. We need more technology like Drover and we need more dedicated lanes for micromobility.
🇪🇺 In Europe, electric buses outsold diesel buses for the first time. In multiple European markets like Sweden, Romania, Ireland, and the UK, more than half of all bus sales were electric.
🛩️ Studies of pathways for aviation decarbonization all show an over-reliance on the Hail Mary of sustainable aviation fuel. Like the Brussels case study above, aviation decarb looks to require a combination of measures.
✏️ The post-pandemic reluctance to commute 5 days a week is tanking the downtown commercial real estate market. Another reason why the US regional banking crisis may continue.
🍻 What happens when a Slate journalist crashes the annual convention of the National Automobile Dealers Association (NADA)? I shared how the dealership model will need to adapt to EVs in Volume 30.
🏅 The International Council on Clean Transportation (ICCT) ranked the EV plans of major automakers. Tesla and BYD came out on top, and Japan Inc on the bottom.
🏭 Corporates & Later Stage
🙏 Ford bit the bullet and negotiated access to the Tesla Supercharger network. The notable news here was Ford’s commitment to adopt the Tesla charging standard for upcoming vehicles. Collateral damage here includes the CCS charging standard, independent charging networks like ChargePoint, and Ford’s EV partner VW. For more context, see the Deep Dive: Is Tesla’s Supercharger Flywheel Entering Hyperdrive?
🤺 Mercedes and Stellantis disagree on the threat posed by Chinese EV brands in Europe. Mainstream brands like Fiat and Opel are threatened by Chinese brands in a way that Mercedes and BMW are not. For now.
👩🏽⚖️ A Tesla whistleblower (link in German) leaked thousands of customer safety complaints about Tesla’s so-called “Full Self Driving.” The data covers North America, Europe, and Asia, so keep an eye on how regulators in different markets react.
🚛 Volvo Group won an order for 1,000 heavy-duty EV trucks from cement maker Holcim. Tesla had a decade-long head start in passenger car EVs; they’re going to have to scale quickly in heavy-duty if they want to go toe-to-toe with legacy players like Volvo Group.
🍽️ Toyota is merging its heavy-duty truck unit Hino with Daimler’s Fuso. This should increase the likelihood of having a globally-competitive Japanese heavy-duty truck company.
📲 Waymo agreed to make its self-driving cars available on Uber’s network, starting in Phoenix. A loss for Lyft, whose partnership with Waymo lapsed during the pandemic.
🛢️ Chevron is under fire for using “worthless” carbon offsets. If you’re looking for second-and third-order effects, check out this interesting pledge from UK students at Cambridge, Oxford, and others to not work at insurers like Lloyd’s of London that support the fossil-fuel industry.
🐣 Startups & Early Stage
🔋Stellantis invested in lithium-sulfur battery startup Lyten. The search for batteries without nickel, manganese, or cobalt continues.
🛬 Boeing signed a carbon-removal agreement with LA-based startup Equatic. Bonus points if you’re able to decipher what exactly a “pre-purchase option agreement” means
🗺️ The free, open-source OpenStreetMap is now robust enough that Lyft ended its long-term use of Google Maps. A good example where Apple and Google are competing with free, open-source data.
DEEP DIVE Memo to HR: Cash Me Outside
The dreaded commute is one of the biggest hindrances in getting employees back to the office on a more consistent basis. For many in the US, there’s a perceived lack of choice: the decision to drive to work often appears to be the only viable choice.
Historically, most employers simply assumed employees would drive to work and incurred significant costs to build vast parking lots; an off-street parking spot can cost $20K in construction alone.
Change is now afoot as employers start calculating the carbon footprint of their employees’ commutes (some will have a regulatory obligation to disclose the information as part of scope 3 carbon emissions) and cities start nudging employers away from the free parking approach.
Enter the concept of cash out parking, which uses money to align incentives, including environmental. The concept means that “employers that provide free or subsidized parking at work also offer employees the option to take an equivalent cash payment, tax-free transit benefit…instead of the parking subsidy”. In short, letting the employee “cash out” what their employer was paying for on-site parking and use an alternative, whether public transit, active transit (bike, walk), or shared transit.
In microeconomics speak, we’re turning parking into an opportunity cost.
Cash out is usually revenue neutral for the employer, and results in significant behavioral changes by employees. Employees who previously felt compelled to drive to work suddenly take a look at the financial benefit of using public transit, active transit or shared transit for their commute.
The US DOT’s Federal Highway Administration recently released a study looking at the expected benefits of adopting cash out parking in nine different American cities. This included a simulation of how city traffic would change if an ordinance required “employers that offer free/subsidized parking to offer employees the option to cash-out their parking on a monthly basis.”
For those looking for an even bigger bang, the DOT modeled a more aggressive scenario where local ordinance forbids free/subsidized on-site parking and where all employers must offer an employee benefit for non-single occupancy car use of $5 per commute day.
That’s a monumental change in most cities based on toggling an employee benefit, a fantastic illustration of the linkage between routine HR decisions and the livability of our cities.
As more cities and employers contemplate cash out parking, HR managers will need a new suite of enterprise software at the overlap of employee benefits management, individual carbon accounting, and mobility wallets. Keep an eye out for startups to shine here versus staid legacy players like ADP.
If you’ve read this far, you’re clearly excited about the potential to unleash this change in cities, so go ahead and forward this post to your Human Resources department and tell ‘em to cash you outside.