🇯🇵 Su$tainable Mobility: The World Zigs, Japan Zags
Vol 48
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 entitled: The World Zigs, Japan Zags. In short, why is Japan tackling sustainable mobility differently than others?
On March 3rd, I will be at the Curbivore conference, which brings the world of transportation, delivery and technology to Downtown LA. Hear from top minds at Uber, LADOT, Bloomberg, Walmart, Wonder, Motional, Crunchbase and more; test out new technology; sample amazing cuisine, and meet new business partners. The first 20 readers to register with code Sustainable20 can register for just $20!
Submit startups & ideas for the newsletter here.
STARTUP WATCH: Sustainable mobility startups (generally pre-seed or seed) to keep an eye on
🌞 Active Surfaces (Massachusetts, USA): Ultra-thin film solar for multiple applications, including vehicle exteriors
🐀 Byterat (United Kingdom): Software to forecast battery performance based on electrochemical data acquired during manufacturing
💳 ChargePass (California, USA): Fintech solution for EV charging
💨 EVHACS (Ireland): Integrated EV charger/heat pump HVAC hardware
🛤️ FluidRail (Germany): Decarbonizing and automating rail transport
🚚 MegaFlux (Mexico): EV fleet conversions focused on Latin America
♻️ Moment Energy (Canada): Repurposing EV batteries for energy storage
🔋Natrion (Illinois, USA): Solid state batteries using lithium solid ionic composite (LISIC)
👨🏾💻 NxtLog (Germany): Fleet management decarbonization software
🪨 Phoenix Tailings (Massachusetts, USA): Manufacturing technologies to recover valuable metal tailings at mining sites
🤳🏽Reefilla (Italy): SparkCharge-like mobile charging network for Europe
FUNDING: Capital raises and updates from startups previously featured in Startup Watch
Orkid (Vol 4) raised an $800k pre-seed round from Newtopia VC, Infinita VC, Seed9 and IRIE VC
Avocargo (Vol 30) entered bankruptcy proceedings (article in German)
Ni-CAT (Vol 31) raised a seed round (amount undisclosed) from Lonca Girişimcilik Merkezi
Mina (Vol 39) was acquired by FleetCor Technologies for an undisclosed amount; this is the 5th exit in the dataset
STARTUP FUNDRAISING UNDERWAY*: Imperium Drive
Solution space: Imperium Drive has launched the concept of Car-Fetching, a tech-enabled service that allows users to summon a remotely-driven hire car to their doorstep in 5 minutes.
Traction: The Fetch service is commercially launched in the UK with paying customers.
Fundraising: Imperium Drive is kicking off its next funding round soon to develop the product further, scale the fleet in the UK and launch the first US operations.
QUICK HITS: Notable news from the last two weeks
🇪🇺 Not wanting to be sidelined by the US Inflation Reduction Act, the EU unveiled the outline of its Green New Deal. It’s filled with high goals, expedited permitting, subsidies, and a push for new trade agreements.
🇺🇸 Related: Volvo Trucks is considering building heavy-duty EV trucks in the US instead of Europe. Hence why Europe is miffed about the US Inflation Reduction Act; time will tell whether the European Green New Deal will also have protectionist elements.
♻️ The US DOE Loan Program Office kicked it into gear with a $2 billion conditional loan commitment to battery recycler Redwood Materials, following on last month’s conditional commitment to lithium company Ioneer. Rightfully, the DOE is focusing loans on where the most work is needed: scaling a credible American supply chain for the battery economy.
🇮🇳 India just became a lithium powerhouse with a major new discovery. This could help vault India into the EV big leagues.
🌎 Polestar and Rivian teamed up on a new study with Kearny underscoring that even with full battery-electric vehicle deployment, we don’t hit our Paris-aligned climate targets. I like the report’s quality, but it misses the importance of focusing on mode shift/resource decoupling.
🪫We already know that autonomous vehicles might bring huge congestion challenges, but a new MIT study shows how autonomous EVs will be a GHG challenge because of their voracious energy consumption. A good reminder of the interdependency between vehicle decarbonization and grid decarbonization.
🧘🏽 Another new study looks at why some people miss their commute and others have no desire to go back. The key is having time to mentally switch gears from work and home; stressful commutes don’t help.
🚄 Minnesota is rebooting plans for higher-speed rail. It’s one of a handful of efforts in the US. Meanwhile, here’s a great video primer on how Japan is going to double the speed of its high speed rail network using magnetic levitation (maglev).
💵 A bill in the California Senate would offer $2k for EV conversions. This bill is focused on the slim subset of passenger cars (classics, lowriders, etc.) where an EV retrofit conversion can make sense, but medium and heavy duty truck conversions also make sense. The logic of converting a regular passenger car is currently not penciling.
🥊 Tesla took a massive EV price cut globally, and Ford followed, but others like VW and GM balked. This is partly a reaction to the details in the Inflation Reduction Act, but it also serves to separate who’s ready to play big leagues in the EV space and who is minor leagues.
👎🏼 Ford unveiled dismal earnings. Again. There’s a Groundhog Day issue here with Ford’s history of underwhelming execution, so investors should be concerned that the EV transition might be harder for Ford than others.
🥷Ford has sold the bulk of its Rivian stake. But the rivalry between Rivian’s electric pickup truck and the Ford F-150 Lightning is just beginning.
🚲 Rivian confirms that e-bikes are definitely part of their product plan. Logical long term idea, but the vastly different scale and scope of cars and bikes makes it hard to scale both at the same time.
🤬 A Tesla driver showed off “Autopilot” capabilities in the parking lot on video. This is rude and dangerous behavior, but expect more of this going forward.
🚙 Having already built electric scooters, India’s Ola is now looking to build electric cars. This touches on themes from Volume 11 and Volume 47.
💰Bank of America became the first major bank in the US to offer financing on home EV chargers. I’m truly surprised this didn’t already exist.
🐚 Shell directors are being personally sued for the company’s climate strategy. The fact that large pension funds and other institutional investors support the lawsuit should make execs at carbon-intensive firms take note.
DEEP DIVE: The World Zigs, Japan Zags
Final 2022 light duty vehicle sales figures are still being refined by various reporting agencies, but there’s little doubt that it was a triumphant year for electric vehicles (battery electric and plug-in hybrids) all over the world.
Except in Japan. While China, Germany, and France were all comfortably in the double digits, 2022 was the first time Japan was able to round up to 2%.
So why is Japan choosing a different path? I believe it comes down to three major factors:
Hybrid cars: Hybrids like the Toyota Prius account for approximately 40% of the Japanese market. With such a successful initial toehold in transportation decarbonization, and perhaps a bit of sunk cost fallacy around hybrid investments, it was other markets like China and the US that went all in on EVs.
A unique hope in a hydrogen car future: The idea that hydrogen fuel cell cars will be sold in large volumes is no longer entertained by most governments or car companies, but Japan Inc remains a vocal proponent. The country’s interest in hydrogen began during the 1970s oil embargoes, which exposed the island nation’s dependence on imported energy. The hydrogen love affair intensified following the country’s Fukushima nuclear disaster.
A concern about the job impacts from switching to EV manufacturing. Japan’s leading automakers have a more paternalistic relationship with their myriad suppliers and it’s clear that EVs requires less manufacturing labor than gas powered cars.
So has Japan made the right decision? Will it be able to decarbonize transportation as quickly as its peers and with less risk? Either way, it will make for an interesting comparison over time with the path chosen by China, the EU and the US.
*Disclaimer: Su$tainable Mobility is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) or any state securities regulatory authority. By accepting this email, you agree to the above terms.