🐸 Why East Africa May Leapfrog the US in EVs
Vol 84
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.
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
Auxilium (Arizona, USA): Recovering valuable metal tailings at mining sites
Ayrton Energy (Canada): Modular hydrogen
BeCause (Denmark): Sustainability management software for travel
Betteries (Germany): Mobile electrical power systems
Decade Energy (France): Depot electrification solution
Foundation Robotics (California, USA): Advanced robotics for construction of sustainable cities, from the founder of now-bankrupt Synapse
GEKOT (Michigan, USA): Safety solutions for micromobility products
Infinite Mobility (Norway): Manufacturer of solar-powered e-cargo bikes
Noki Noki (Republic of Congo): Last-mile delivery platform
Trev Mobility (India): All-electric ride-hailing service from a former Zoomcar exec
WattsUp (Massachusetts, USA): Predictive maintenance software for EV chargers
💰FUNDING: Capital raises from startups previously featured in Startup Watch
Voltpost (Vol 7) secured a $100K grant from the Michigan Economic Development Corporation
Princeton NuEnergy (Vol 24) raised an additional $30M for its Series A from Samsung, Honda Motor, Wistron Corp, Helium-3 Ventures, and others
Lisus (Vol 55) raised a pre-seed from Rumbo Ventures (amount undisclosed)
ShipZero (Vol 60) raised an 8M EUR Series A from TF Partners, Raspberry, Rethink Ventures and Zu na mi
Cardino (Vol 65) raised a 4M EUR seed round from Sequoia, DEPO Ventures, Point Nine, and Rosberg 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.
👩🏽⚖️Government, Policies & Cities
🍾 Atlanta’s e-bike rebate lottery program just launched and is already oversubscribed. The city has received over 4,800 applications for only 700 slots.
🫠 In New York City, construction on the Second Avenue Subway extension has halted and S&P has flagged a potential downgrade to the transit authority’s credit rating. The damage from the governor’s pause on congestion pricing is suddenly very real.
🍁 Montreal is making 11 streets car-free this summer. Montreal continues to be one of the clear leaders in mobility policies in North America.
🤠 Fort Worth Mayor Mattie Parker blasted her Dallas counterparts for their opposition to high-speed rail. When a Republican mayor in Texas is pushing for high-speed rail, perhaps things are slowly changing…
🛤️ In California, railroad companies fear that the state’s zero-emissions rules for 2035 will shift cargo from rail to trucking. Counterpoint: rail will go zero-emissions faster than expected.
🇿🇦 South Africa’s plan to transition its factories to building zero-emissions vehicles may be dead on arrival. South Africa’s long-standing vehicle manufacturing industry may collapse, like Australia’s did. Alas, Morocco is already building EVs.
🚈 Ridership on Amtrak, the US passenger rail operator, is hitting all-time highs. Ridership and revenue are growing at double digits.
🎲 Congress has launched a watchdog probe into why cars in the US kill so many more pedestrians than in other countries. The primary countermeasure here is already known: follow Europe’s lead and incorporate pedestrian safety into vehicle crash standards. Whether the country has the political will for that is an open question.
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🔬Markets & Research
💽 BNEF has launched its annual Electric Vehicle Outlook. Cool tidbit: In almost all markets, EVs log more miles than their internal combustion engine equivalents. Not so in the US.
🔌 According to McKinsey, almost 30% of EV drivers globally may go back to ICE for their next car. The culprit is the public charging experience.
🚲 What happens when you build more cycling infrastructure? Ridership goes up by double digits.
🏭 Corporates & Later Stage
🙈 Boeing’s CEO testified before the US Senate about the company’s challenges. See Vol 76 for a reminder on the climate impacts of this one, especially the all-important decision on when to greenlight a new, more fuel-efficient plane.
🛟 GM’s Cruise unit paid only $112,000 in a fine to the California Public Utility Commission over its lack of disclosure. That’s a drop in the bucket compared to the $850M commitment GM just made to bring Cruise back to life; see Vol 82 for the messiness in robotaxis.
⏱️ Ford is killing its Model E dealer certification program, which involved separate investments and standards for Ford dealers to sell EVs. While this gives Ford dealers some breathing room, it takes the pressure off of dealerships to adapt their selling and service approaches in the EV era.
🍔 Uber and Postmates have lost their legal challenge to California AB5. The law, which reins in gig working, is holding up surprisingly well to challenges.
🐣 Startups & Early Stage
🪦EV manufacturer Fisker declared bankruptcy. It’s unlikely that rivals like Faraday Future and Canoo will escape the same fate.
🤖 German autonomous technology startup Vay is partnering with Peugeot to test remote driving for last-mile connectivity. Teledriving isn’t just for sidewalk robots bringing you your burrito.
🫳 Swedish unicorn Northvolt may have lost a 2B EUR contract with BMW. Legacy car manufacturers’ need for predictability can clash with the chaotic scaling of startups.
📲 Air taxi company Joby got FAA approval for its booking app. Similarities to Uber’s user interface are purely coincidental…
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DEEP DIVE: Why East Africa May Leapfrog the US in EVs
Ethiopia made headlines earlier this year, becoming the first nation in the world to ban the import of gas powered cars.
While was one of the first visible signs of a major transition already underway. For reasons relating to geopolitics, energy policy, and comparative economic advantage, East Africa will likely leapfrog the US in EV adoption, in the same way that mobile banking took off in East Africa long before it did in the US.
Start with geopolitics. In the last few months, the US and the EU have both made it clear that they are deeply concerned about China’s lead in EV technology and are ready to implement trade tariffs to dramatically limit the volume of EV imports. Just shortly after the US quadrupled tariffs on Chinese EVs to 100%, the EU announced it would slap a 38% tariff on Chinese EVs. That will not stop the technology juggernaut that is the Chinese EV industry; it will just shift where China sends its exports. China has an eyewatering problem with overcapacity; those exports will be redirected toward Southeast Asia, Africa, Latin America, and other emerging markets.
East Africa is an importer of passenger cars, whether from larger economies in Africa like Morocco and South Africa or from China and Europe. The advantage here is that East African nations, unlike the US, China or South Africa, can adopt EV policies without broad concern about the impact on local manufacturing jobs.
There’s another absence in East Africa that becomes a strength: Unlike oil-rich Nigeria, Gabon, or Angola, East African nations are generally not oil producers. And, like many emerging and developed nations, East African countries spend significant portions of the federal budget on fuel subsidies.
There is, however, East Africa’s green grid. Most nations in East Africa are decades ahead of the US in terms of being able to tap into renewable energy. And that’s before even less expensive green energy technologies like solar plus battery energy storage reach scale.
Every import of a gas-powered car into an East African country means importing foreign oil and potential fuel subsidies for drivers. Conversely, every import of an EV into an East African country means relying on domestic energy and avoiding fuel subsidies. It’s a double win for the budget, plus an environmental win. Couple that with cheap Chinese EV imports and it’s easy to see why Ethiopia’s gas ban is the first sign of how quickly East Africa might tip towards EVs.
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