🇧🇷🇲🇽Su$tainable Mobility: Electrifying Transportation in Latin America
🇧🇷🇲🇽Su$tainable Mobility: Electrifying Transportation in Latin America
Vol 55
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.
This week’s Deep Dive is Electrifying Transportation in Latin America with Jack Sarvary of Vammo and Jakson Alvarez of Evolectric.
Submit startups & ideas for the newsletter here.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
Batteryze (California, USA): Cloud-based battery health diagnostics for 2nd life optimization
Blumen Systems (California, USA): Software for permitting & siting automation for battery minerals
Climatize (California, USA): Consumer-driven project finance, including mobility infrastructure
EVChaja (Kenya): EV charging network using domestically manufactured chargers
Gently (California, USA): Mobile warehouse last-mile delivery network
Kerbo Charge (United Kingdom): Curb-compliant charging solution for on-street parking
Lisus Energy (California, USA): Software for lithium site identification
r3charge (Germany): Hotel booking for EV owners
Sharehub (Netherlands): EV car-sharing service with emissions-free charging
Stepwise (California, USA): Smart device between electrical panel and appliances like EV chargers
Upfront (California, USA): Fintech solutions to facilitate point of sale rebate on EV charging equipment
Zenway (United Kingdom): Mobility as an amenity for real estate operators
💰FUNDING: Capital raises from startups previously featured in Startup Watch
Ashnni (Vol 21) raised $244K from WealthTrust Capital Services
Infyos (Vol 45) won a 170K GBP grant from the Advanced Propulsion Centre UK
QUICK HITS: Notable news from the last 2 weeks
👩🏽⚖️Government, Policies & Cities
🏋️♂️ A neighborhood in Montreal (article in French) is charging for residential parking permits based on type and weight of vehicles. A good way to start reining in overweight vehicles.
🇮🇳 Delhi approved a policy forcing ridehail operators to go electric by 2030. There are a whole lot of regions in the world, developed and emerging, where ridehail will exclusively be electric by 2030.
😌 Los Angeles has finally scrapped plans to widen the infamous I-710 freeway. Now on to decarbonizing the heavy-duty trucks that use the 710 to reach the massive ports nearby.
🚔 South Pasadena claims to be the first police district in the US to go fully electric. The fueling and maintenance savings were too good to pass up.
🤠 Austin eliminated parking minimums. Great success! See the Deep Dive on parking minimums in Volume 43.
📚 Denver’s e-bike success is inspiring e-bike rebates all over, including the rest of Colorado, San Francisco, and NYC. One step closer to a national e-bike rebate…
🇳🇬 Nigeria orders 12,000 electric buses, becoming one of the largest electric bus markets in the world. For context, there were under 6,000 zero-emission buses in the whole of the US in 2022.
🇨🇳 The New York Times asks whether you can you build an EV without China. Short answer? Not yet.
🇬🇧 Corporates like Stellantis and Ford are sounding the alarm about the collapse of the car manufacturing sector in the UK. As a consequence of Brexit, the UK will likely not make the transition to mass-volume EV manufacturing.
👨🏾💻 The Open Mobility Foundation released its Mobility Data Specification 2.0. For more on these vital software standards, see the Deep Dive in Volume 43.
♻️ PeopleForBikes and Call2Recycle have started an e-bike battery recycling campaign in the US. The work continues until every battery is recovered at the end of life.
🔬Markets & Research
🚊 A new report shows that subways have a massive climate benefit. Another reason for the US to get its subway construction costs under control.
🚌 In the US, everybody wants zero-emission bus grants; demand for low-emission bus grants has evaporated. The government would be well served to reallocate the low-emission bus funding to zero-emission buses.
🏭 Corporates & Later Stage
🇪🇺 Germany and France each notched a new battery gigafactory announcement. Europe is now making an effort to match the largesse of the US Inflation Reduction Act.
♾️ NIO launched the first EV with a semi-solid state battery. We’ve reached the ludicrous battery capacity stage: the car you only need to charge once per month! (It has 1,000 km of range and the average Chinese vehicle does under 12,000 km per year.)
💍 In Europe, Bolt may acquire Tier. If it happens, Europe, China, and the US would each share the market structure of a car network operator (like Lyft) owning the large micromobility operator.
🗑️ According to Greenpeace, Western automakers may be stuck with factories in China producing gasoline-powered cars that nobody wants. Greenpeace is far from unbiased, but American, European, and Japanese carmakers in China are getting desperate to catch up to China’s EV makers.
🗺️ Google Maps is getting an “immersive view.” It’s cool but it would be nice if Google Maps did a better job of consistently innovating.
✈️ Uber is continuing its march towards “super app” status by adding flight booking in the UK. Don’t tell Elon Musk, who also wants Twitter to become a super app.
🐣 Startups & Early Stage
🚴♀️ Interested in bike routing algorithms? Germany’s BRouter is an open-sourced algorithm you can fine-tune based on your bike, weather conditions, etc.
🖖 Truck maker Iveco is dismantling its JV with startup Nikola. Nikola is doubling down on hydrogen and the US market at the expense of electric and Europe.
⛴️ Can abandoned oil barges be repurposed for carbon capture? Some folks are going to spend a lot of money to find out.
DEEP DIVE: Electrifying Transportation in Latin America
Most of the transportation electrification discussion revolves around China, the EU and the US. But what’s happening in Latin America? A friend of the newsletter framed the situation well:
“The Latin American urbanization rate is at 80%, 70% of people move around in public transportation, and the region has a high renewable energy share (25%, 315GW).
However, transportation represents ~40% of all emissions in the region, we have highly polluted cities, and very limited charging infrastructure coupled with the fastest growing car fleet in the world (expected to reach 200 million units by 2050)”
To go a few levels deeper, I sat down with Jack Sarvary of Vammo (formerly Leoparda, Vol 36) and Jakson Alvarez of Evolectric (Vol 27).
Q: Could you start with what Vammo and Evolectric do?
(Sarvary/Vammo): We rent electric motorcycles in Brazil to the courier population. These folks are using their bikes for commercial purposes, perhaps 150 kilometers a day on average. Their major roadblock to EV adoption is that the range just isn’t there. So to unlock the market potential we’ve built a network of battery swapping stations around the city; when their batteries get low, they come to us to pick up fully charged batteries and drop off a set to be recharged. This gets drivers back on the road immediately, and we take care of recharging.
(Alvarez/Evolectric): Evolectric is accelerating electrification for commercial fleet owners. We combine circular economy principles with advanced electric vehicle technology into what we call circular electric vehicles. We take diesel, end-of-life trucks and give them a minimum of 10 more years of service as 100% electric and smart. We go beyond the vehicle itself in applying circular economy principles, including training the existing workforce to service these vehicles. That way, we don't have to build new factories or equipment, and we minimize the logistics footprint of the electrification process.
Q: Electrification is currently being dominated by regions like China, Europe, and the US, which are, not coincidentally, home to the major manufacturers. How does Latin America move the needle in the short term without major domestic manufacturers?
Sarvary/Vammo: There’s an opportunity to rethink the paradigm we had in automotive where foreign companies just arrived to build locally. There’s a transition to foster new industries and create new jobs. On the battery side, Brazil has a lot of interest in understanding what role Latin America can play given the immense amount of lithium deposits in the southern portion of the continent, and how to avoid just shipping raw materials to China for value-added processing.
Alvarez/Evolectric: Battery manufacturing has to be localized; there's no way around it. It’s simply not sustainable to ship battery packs all over the world. So how quickly can countries in Latin America move to localize some of these key components like batteries and motors? The answers don’t necessarily need to be fully homegrown, because battery technologies require a lot of R&D investment and sophistication to manufacture safely at scale; I see big players partnering with local players to build those factories locally.
Q: Southeast Asia and India have a fairly robust economy around battery swap as a service embedded within the 2- and 3- wheeler market. How would you respond if somebody like a Gogoro or Gojek enters Latin America?
Sarvary/Vammo: I don't think anyone's really cracked the code here yet with one exception, which would be Gogoro and, even then, only in Taiwan. Gogoro tried to enter 3 huge neighbors (India, Indonesia, China) and that hasn’t been the same kind of success. Part of our defensibility here in Brazil is that the markets in Southeast Asia are so much bigger. So Gogoro has got new opportunities over there for a while.
But then there are intrinsic differences in Latin America. About half of the motorcycles here are used for commercial purposes by workers who are working all day long, versus Asia where it's a commute-focused product. The Latin American commercial use requires a different bike, different range, and a different price point which also has implications for the battery and the network that supports it. Plus we have the first-mover advantage in the region.
Q: Brazil and Mexico both outrank France, Germany, and the UK in terms of commercial vehicle sales. Beyond Evolectric’s presence in the US, what countries are you prioritizing for medium- and heavy-duty vehicle electrification?
Alvarez/Evolectric: We've modularized our product kits and standardized the process so that it can be localized, which is our point of differentiation. We can work with local partners using existing facilities and equipment with their existing workforce. We're proving that in Mexico right now as we're piloting with AB InBev, one of the largest brewing companies in the world.
Our focus is Mexico, Brazil, and Colombia. Colombia is a small country, but it's a big influencer; they have the largest electric bus fleet in the world outside of China. So we are focused on Colombia from a regulatory standpoint: how can we help shape regulation that can impact the entire region in Latin America? Commercially, we're starting to deploy in Mexico which is the most viable. And then we’ll work on Brazil, which can be a bit more protectionist.
Q: What’s the biggest myth you want to dispel about electrification in Latin America?
Sarvary/Vammo: There’s a myth that electrification starts with the rich driving Teslas for lifestyle decisions. But the reality is very different. Because while we’ve put 20 million electric cars on the road, we've also got 280 million electric 2- and 3-wheelers. So I think of electrification starts at the bottom of the pyramid with 2-wheelers and moves towards 4-wheelers.
Q: Latin America has a lot of electrification potential, thanks to large lithium deposits. Are you hopeful for Latin America’s potential to be an upstream player in the battery wars given some of the historical frictions on the continent?
Alvarez/Evolectric: We’re going to have to make sure we rethink the traditional holdover from colonialism of arrive, extract resources, and leave. If this is not done right, it could have a huge negative environmental impact on one of the most amazing ecosystems in the world.
Sarvary/Vammo: What makes me optimistic is that the business community, the political Left, and the political Right all agree that this is vitally important. You don’t often find that alignment; they’re all looking for entrepreneurs to step up.
If you’re interested in this region, startups in the database from Latin America include Mercado Bici, VamosPasajes, MegaFlux, La Wawa, and Orkid. 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 ~400+ companies, please let me know.
