The Turn of Events on Congestion Pricing
Vol 83
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.
Reminder: If you are or have been the founder of a micromobility startup, please take this 3” survey here! And please share with other micromobility founders.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
Blitz (Indonesia): Same-day micromobility delivery platform
Chargerzilla (Washington, DC, USA): Competitor to EVMatch and SplitEV
Climastry (Illinois, USA): Software enabling manufacturers to decarbonize
Entroview (France): Battery diagnostic software for manufacturing applications
Jolta (Florida, USA): Micromobility marketplace
Kemet Automotive (Cote d'Ivoire): Manufacturer of electric vehicles
Northern Light Composites/nlcomp (Italy): Recyclable fiberglass composite for use in maritime applications
Ven (Washington, USA): Managing general agent (MGA) insurance company exclusively focused on electric vehicles
💰FUNDING: Capital raises from startups previously featured in Startup Watch
McEasy (Vol 16) raised an $11M Series A from GGV Capital and East Ventures
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 $1.9 billion in follow-on funding, please let me know.
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📰QUICK HITS: Notable news from the last two weeks
👩🏽⚖️Government, Policies & Cities
🎵 Diana Ross and Eminem helped inaugurate the reopening of Michigan Central Station in Detroit. Credit to Bill Ford for ensuring that this architectural icon got repurposed as a mobility innovation center for the 21st century, just as Detroit clocked its first population increase since 1957.
🗣️ In New York City, residents debate whether e-bikes have made the city a nightmare. Pedestrians fear e-bikes and e-bike riders fear motorists.
👋🏼 Virginia Governor Glenn Youngkin is trying to pull the state out of the California emissions program. This follows steady growth in the number of states that follow California’s regulations.
🛢️ Massive lithium deposits, a vital input for EV batteries, were discovered in Pennsylvania. Alas, in this case, it appears that the lithium is being released as part of the fracking process.
💵 Minnesota became one of the latest states to offer an e-bike rebate. Hopefully another data point that helps secure federal support for micromobility…
🏭 In the US, Congressman Earl Blumenauer has introduced a bill to spur micromobility manufacturing in the US. For more on this topic, see the Deep Dive on Why Micromobility Got Left out of the Inflation Reduction Act.
🇨🇩 The Democratic Republic of Congo (DRC) has accused Apple of engaging in illegal mining in its country. Now the burden is on Apple to provide proof about the battery supply chain so that DRC doesn’t take legal action.
🇧🇪 Belgium goes to the polls today to vote, and in the Brussels region, the traffic-calming Good Move plan is a lightning rod electoral issue. The plan has exceeded expectations (over a third more cyclists, 20% fewer crashes, less noise, better air quality, and local business revenue up 10%), but frustrated motorists are also taking to the polls.
🇪🇺 The European Commission is getting closer to finalizing its proposed tariffs on EVs from China. If it succeeds, expect Chinese EV powerhouses like BYD and Geely to accelerate their plans to build or buy EV factories in Europe.
🇪🇺 The European Commission approved 1.4 billion EUR in hydrogen grants to Airbus, BMW, Michelin, and others to build a hydrogen transportation ecosystem. Meanwhile, in Germany, scandal continues in the Ministry of Transportation over hydrogen funding.
🔬Markets & Research
🚌 In Europe, the most popular powertrain for buses is now electric. It will be quite an uphill battle for hydrogen at this stage.
🎟️ Another study looks at the mixed results of fare-free public transportation. Riders want reliability and frequency more than they want free.
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🏭 Corporates & Later Stage
🛸 Amazon secured FAA approval to expand drone deliveries in the US. After years of fits and starts, 2024 may be a good growth year for the fledgling industry.
🛻 Rivian has mildly refreshed its pickup truck and SUV in an effort to drive out manufacturing costs. While necessary, the company’s real hope for the long term rests on surviving until the cheaper R2 vehicle launches in 2026.
🗳️ As Elon Musk becomes an informal advisor to Donald Trump, Tesla shareholders are anxiously awaiting next week’s shareholder vote on Musk’s pay. While expected to pass, the meme stock vibes of the “vote yes” campaign underscore the growing chasm between shareholders who pledge loyalty to the individual and those who follow a classic approach to fiduciary duty.
📈 2024 is the year the legacy players learned how to sell EVs in the US, with companies like GM, Hyundai, Kia, Honda, and others clocking records. Tesla is still in a rut; with sales in the US down, as well as in Europe and China.
🛂 Volvo became the first EV with a “battery passport.” Having verifiable battery information from the passport like raw material components and recycled content will help build a market for recycling and enhance supply chain trust.
🐣 Startups & Early Stage
✈️ Air taxi company Archer got permission from the FAA to run a commercial airline. This will allow Archer to trial operations while it pursues type certification for its air taxi product.
🤖 Archer’s rival Joby is buying the autonomy division of Xwing. In addition to helping Joby secure defense contracts, it also helps futureproof Joby’s commercial aviation business given the ongoing shortage of commercial pilots.
🔋 Ionic Materials, which raised $65M to develop an innovative polymer for lithium batteries for EVs, has shut down. Even with the near-shoring of the battery economy, success is far from guaranteed.
🌆 Gravity (Startup to Watch Vol 68) has unveiled a curbside charging "tree." Their solution would compete with others including Its Electric (Vol 26) and Voltpost (Vol 7).
🚌 Zenobe, the UK battery company for buses and second-life storage, just secured $522M to expand. Another example of batteries for propulsion eventually becoming batteries for storing renewable energy.
DEEP DIVE: The Turn of Events on Congestion Pricing
In Volume 49, I asked whether New York City was on the Cusp of Making Mobility History. The answer turned out to be yes, but for unexpected reasons. On Wednesday, with weeks until the launch of congestion pricing in New York City, New York Governor Kathy Hochul announced the program will be indefinitely delayed.
Congestion pricing was due to generate $1 billion a year, allowing the Metro Transportation Authority (MTA) to generate $15 billion in bond revenues that were a backbone of MTA’s $51.5 billion capital plan. By law, funds from congestion pricing were to be used only for capital projects, not daily operating expenses. In the days following Hochul’s announcement, the New York State Assembly and Senate tried and failed to find a funding alternative; as of this weekend, lawmakers are in legislative recess for the rest of the year.
These five year capital plans are guides to how investments will be spent on local railroads, buses and the all-important subway. While the subway is still the best example of American public transportation success, its performance is deteriorating: in 2017, in response to worsening reliability and major safety incidents, then-Governor Andrew Cuomo declared a state of emergency for the system.
This week’s decision will have major repercussions on mobility in the US. Most urgently, the MTA funding situation may get worse before it gets better. System upgrades, the extension of the Second Avenue subway, EV bus purchases, and other projects all must come to a halt until new funding is secured.
In addition, we may have to wait a bit longer to see the climate impact of transportation demand management as a strategy in North America. We won’t reach our climate goals just by getting people out of gas guzzlers into EVs, we also have to rapidly find ways of getting people into more efficient modes of transportation; this would have been the biggest experiment on the continent in prioritizing public transit use over private vehicle use.
Here’s to hoping that congestion pricing makes history in North America again soon.
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