⏰ Rivian Debate: Wall Street vs Silicon Valley
Vol 75
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.
I’m excited to share that I’ve recently joined Blue Vision Capital as a Venture Partner. Blue Vision Capital’s mission is to invest in seed stage innovative, disruptive, and breakthrough startups that can demonstrate a measurable and meaningful positive impact in solving our climate crisis all the while generating attractive venture scale returns.
Also, I’ll be hosting a webinar with the Wharton Energy Network on Feb 21 E-Mobility Trends in 2024 and Beyond alongside Russell Sprole of Virta Ventures. All are welcome. Register here.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
AC Future (California): Manufacturer of electric RVs
Ascetic (Poland): Mobile application for real-time carpooling and payment processing
DitchCarbon (United Kingdom): Climate emissions intelligence for procurement
Flip Energy (California, USA): API connecting batteries and inverters to virtual power plants
Hago Energetics (California, USA): Carbon-negative hydrogen for the transportation sector
Maple Materials (California, USA): Carbon-negative battery anode material
NextDriver (Netherlands): Driver coaching software for heavy-duty vehicles
Peak Energy (Sweden): Consumer-facing software for smart EV charging
Virv (California, USA): Mobile charging solution for airport ground handling equipment
Zin Boats (Washington, USA): Manufacturer of electric boats
💰FUNDING: Capital raises from startups previously featured in Startup Watch
Daze (Vol 9) raised a 14.6M EUR Series A from CDP Venture Capital
Guided Energy (Vol 57) raised a $5.2M seed round led by Sequoia Capital and Dynamo Ventures
OutSail Shipping (Vol 60) raised pre-seed funding from 10Bond (amount undisclosed)
As a reminder, the startup data set is open, for free to subscribers. If you’re a subscriber interested in accessing the Airtable with how these startups raised $1.7 billion in follow-on funding, please let me know.
📰QUICK HITS: Notable news from the last two weeks
👩🏽⚖️Government, Policies & Cities
🅿️ Voters in Paris approved a plan to triple parking fees for heavy cars and may ban cars from the Eiffel Tower area after this summer’s Olympic Games. Mayor Anne Hidalgo has spent a decade remaking the EU’s largest city to be less car-centric, making friends and enemies along the way.
🤧 New York City continues towards congestion pricing, despite lawsuits and Boston has rebooted its efforts. See the Deep Dive in Vol 49 for a refresher.
🚉 The California State Assembly has a bill that would exempt railroad electrification projects from the environmental review process known as CEQA. While CEQA has notable intent, it’s being reformed to allow California to get sustainable infrastructure in the ground quickly.
🚲 There’s also a bill in the California State Assembly for an e-bike driver’s license. A good move on the path towards legitimizing e-bikes as a form factor.
✈️ The US Federal Aviation Administration has finally closed a loophole that severely discouraged airports from being served directly by local metros. Europe and Asia aim for a direct rail connection to the airport when possible, rather than relying on a secondary airtrain/people mover. Now the US may follow suit.
💥 France has paused its EV leasing program for low-income households because it proved too popular. The scheme was more than 3x oversubscribed and will be relaunched with fresh funding next year.
🌍 Driven by a voracious appetite for critical minerals for EV batteries, China is financing the revamp of a Zambia to Tanzania rail line. The EU and the US are financing similar projects. This feels like an ominous sequel to the “Scramble for Africa” over a century ago.
🔬Markets & Research
🚌 A new study is turning conventional wisdom on its head by arguing that increasing public transit subsidies makes transit more efficient, not less. Whether it changes the perspective of the Cato Institute is still unclear.
Enjoying this issue? Share it with 3 people…
🏭 Corporates & Later Stage
💰Barclays announced it will no longer finance oil and gas projects. Staying in oil and gas is getting ever more expensive.
🔌 Stellantis adopted the Tesla charging standard in North America. Every single major car brand has now adopted the standard.
🤖 A rioting crowd in San Francisco burned down a Waymo robotaxi. As robotaxis proliferate in a few cities, we’re starting to see signs of a pushback.
↗️ Uber finally delivered its first full-year annual profit and Lyft managed decent financials. Wall St celebrated but drivers went on strike demanding fair pay.
📌 The latest corporate perk is an e-bike subscription. All the more important given that private car ownership is increasingly out of reach for Americans.
⚓️ Retailer Flying Tiger Copenhagen became the latest to contract with Maersk for 100% use of so-called green fuels. Flying Tiger joins Nestle, Amazon, and Inditex (Zara).
🐣 Startups & Early Stage
✈️ Syensqo has teamed up with Climate Impulse to build the first hydrogen plane to fly non-stop around the world. The flight will come about a decade after the first round-the-world flight on solar power.
🚁 Joby announced it will launch an air taxi in Dubai in 2026. Dubai is itching to be a pioneer in this space; other governments may be much more cautious.
⏳ Faraday Future may lose its LA HQ for failing to pay rent. It’s hard to see how this saga ends well.
If you are enjoying this issue, please share with 3 people in your network.
DEEP DIVE On the Rivian Debate: Wall Street vs Silicon Valley
Electric truck and van maker Rivian went public in November of 2021 to much fanfare, with shares popping about 30% on the first day of trading. The company even opted for the traditional IPO route rather than the significantly easier SPAC process that so many of its peers pursued.
Alas, it’s been downhill ever since. From a high of $130, Rivian shares now trade at about $16. Analysts blame a host of factors, with “production hell” frequently highest on the list. Simply put, getting manufacturing launched for an emerging car maker is usually fatal, with simultaneous battles to be fought on sales, production volumes, and finance, to say nothing of vehicle initial quality. The Tesla Model 3 ramp-up, for example, almost killed Tesla.
The stock market continues to question whether Rivian has the right stuff to make it through production hell. Even at today’s low share price, 15% of the company’s shares are currently sold short compared to 3% for Tesla stock.
While Wall Street was falling out of love with Rivian, Silicon Valley began falling in love. Rivian is becoming one of the “go-to” employers for leaders from Apple, Meta (Facebook), and other Silicon Valley heavyweights eager for their next challenge.
Just before Rivian’s IPO, the leadership team reporting to CEO and Founder RJ Scaringe was an assorted crew sourced from employers like Royal Enfield motorcycles and Roland Berger strategy consultants.
Fast forward to today, and only 6 of those reports are still listed on the company’s leadership page. Instead, the company has brought on 10 execs, half of whom have worked at Silicon Valley heavyweights like Alphabet (Waymo), Apple, or Meta. (Incidentally, many of the other newcomers have ties to the German premium automakers.)
In short, Silicon Valley insiders are making big career bets on the future of Rivian, despite Wall Street’s cold shoulder. At some point relatively soon, the company either becomes the next EV success story or succumbs to the dangers of production hell.
Not yet a subscriber?