News: The Station: Rivian adds to its EV war chest, Sec. Buttigieg is coming to Disrupt and Argo preps to launch with Lyft
The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Sunday in your inbox. Hello frens and readers. Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point
The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Sunday in your inbox.
Hello frens and readers. Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.
Hey so maybe y’all missed it, but we shared some exciting news this week.
Transportation Secretary Pete Buttigieg will join us for a fireside chat at Disrupt 2021, where we plan to dig into some of the thorniest questions around transportation and how to ensure that moving from Point A to Point B is a universal right, not a privilege. The upshot: If it involves technology that moves people and packages, we aim to talk about it.
What do you want us to address?
Also, this is my way of telling y’all to buy a ticket to Disrupt. There are a lot of great speakers, including writer, director, actor and Houseplant co-founder Seth Rogen, Twitter CISO Rinki Sethi, Calendly founder and CEO Tope Awotona, Mirror co-founder and CEO Brynn Putnam, Evil Geniuses CEO Nicole LaPointe Jameson and Andreessen Horowitz General Partner Katie Haun, Duolingo CEO and co-founder Luis von Ahn and Coinbase CEO Brian Armstrong — to name a few.
As always, you can email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.
Micromobbin’
Do you live in a city with shared e-scooters and e-bikes that you never really ride even though you think it’s a cool concept? Maybe you think paying $10 to go three miles is ridiculous, or you don’t want to touch the sticky handlebars that someone may have previously coughed on. You’ve considered buying your own, but it ain’t cheap and you’re not ready for that kind of commitment … But wait! From the depths of this stream of consciousness a new business model emerges: micromobility subscriptions.
The premise is that customers pay a somewhat affordable fee for a monthly rental of a higher quality e-scooter or e-bike. It’s delivered to their door and assembled for them. If it breaks down, someone will ship them a new one. And customers can cancel anytime. It’s truly made for the 21st century city dweller, adding nicely to their collection of meal kit, vitamins, video streaming, music streaming, book reading, meditation app, digital trainer and outfit subscriptions.
Enough about the customer. Investors and companies are seeing the value in either building a business around the micromobility subscriptions model or adding it as another line to an existing business. They say it’s easy to scale, provides a good return on investment and costs less per mile to operate. And for those who actually care about sustainability, it allows the operator to control the vehicle’s end of life in a way that sales don’t.
The reason I’m harping on about this model is because I wrote about it for ExtraCrunch this week. It’s behind a paywall, but here are some highlights from the piece:
Shawn Carolan, managing director at Menlo Ventures, which invested in e-scooter subscription/sales company Unagi, is bullish on the micromobility subscription model. He says most people would rather pay a low monthly fee rather than a higher upfront fee.
“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”
Menlo Ventures bet that customers would also take better care of high-quality scooter they get to “own” for a time, which translates to a longer lifetime for hardware — something the dockless shared model consistently struggles with. Having an additional route to micromobility will broaden the market, positioning it as a SaaS business, which achieves a higher multiple.
So what’s next for the subscription model? Startups looking to go this route need to work on providing the best possible service in order to retain customers.
“The job to be done is reliability,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “Maintenance and repairs is still a nascent sector, but for people who want to have a reliable option for travel and don’t know or care about how to maintain their brakes or gears, it’s a really good option. Proper servicing will open up micromobility to a far wider group, especially when paired to safe infrastructure and favorable transport policies.”
Ireland gets on the e-scooter bandwagon
In other news, this week Ireland launched its first e-scooter trial across five campuses of Dublin City University. Berlin-based Tier will work with Irish and DCU-based Luna to equi
p e-scooters with computer vision tech that will be able to detect pavement lines and pedestrians. This is similar to what Drover is doing with Spin, which has just launched its visually updated scooters in Santa Monica.
The Insight SFI Research Centre for Data Analytics and Smart DCU, a district of Smart Dublin, will also collaborate on the pilot research. E-scooters are still illegal to ride on Irish roads, but there is proposed legislation in the works to change that.
Superpedestrian’s scooters are not backing vision
E-scooter company Superpedestrian acquired Navmatic, a startup that helps micromobility operators locate vehicles and correct their movements in real time. With access to Navmatic’s super fusion tech, Superpedestrian has created an advanced safety system called Pedestrian Defense that can detect unsafe riding behaviors and stop them in real time.
Navmatic’s technology basically allows the scooter to detect the rider’s micro-movements and through those plus other data picked up from sensors can determine things like if the scooter is going down the wrong way on a one way street or riding on the pavement.
Bike stuff
The Rad Power RadRover 6 Plus was launched this week, the latest model of the company’s flagship bike.
It’s the e-bike for people who come to the world of biking from a car-centric background somewhat reluctantly, but get hooked to the smooth, sturdy ride, user-friendly design and really affordable price. This totally rad bike is only $1,999, and it’s built to last.
I talked to the bike manufacturer’s chief product officer, Redwood Stephens, and he explained how Rad Power’s business model is all about reducing friction for the customer, from the way you order your vehicle to the packaging it arrives in to the big obvious ON button. And this method appears to be going quite well for the company. In February it raised $150 million in funding, probably the most any e-bike company in America has ever raised.
— Rebecca Bellan
Deal of the week
Rivian scored another $2.5 billion in a private funding round of returning investors. The round was led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc. Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue also participated in the round, according to Rivian.
Rivian has raised an eye-popping $10.5 billion to date. The company didn’t share a post-money valuation, but earlier this year when it had announced a $2.65 billion raise TechCrunch learned that its valuation was $27.6 billion.
As the money comes in, the pressure is increasing for the company to deliver its consumer and commercial products. Rivian recently delayed deliveries of its R1T truck and R1S SUV from this summer to September due to delays in production caused by “cascading impacts of the pandemic,” particularly the ongoing global shortage of semiconductor chips. The company also confirmed it plans to open a second U.S. factory.
My other “deal of the week” involves a deal that almost wasn’t. I’m speaking of Lucid Motors of course, which had to extend the deadline to approve its merger with special purpose acquisition company Churchill Capital IV because not enough retail investors showed up to cast their vote. (They were able to approve the merger on Friday).
The hiccup occurred on Thursday, when shareholders voted to approve all but one of the proposals as part of the merger — proposal two, which would revise the company’s charter so that Lucid could receive key financing. That proposal requires a higher number of votes than the others — and it must be approved for the merger to take place — so a lack of votes ended up halting the entire process. The lack of shareholders was blamed on retail investors’ unfamiliarity with the SPAC process and, unbelievably, spam filters gone awry.
The issue is unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs.
Other deals that got my attention this week …
ChargePoint acquired European charging software company has·to·be for €250 million ($295 million) in cash and stock, the electric vehicle charging network’s first acquisition since it became a publicly traded company. Through the deal, ChargePoint gains more than just 125 employees and the company’s operating software, which manages more than 40,000 networked ports in Europe. The acquisition will give ChargePoint a boost in its pursuit to gain market share beyond North America, as well as VW Group as a strategic partner.
Magna International, the Canadian auto parts maker, is going to acquire its rival Veoneer, which had spun off from safety equipment supplier Autoliv in 2018, for about $3.8 billion in cash, Automotive News reported. (This also qualifies for my “deal of the week.”) The acquisition is going to give Magna a major boost, particularly in the area of driver assistance technologies business.
Magna will buy out Veoneer’s outstanding shares for $31.25 each, and the acquisition represents an enterprise value of $3.3 billion including debt, the companies said in a joint statement. Magna also said it will capture about $100 million in annual cost savings by 2024.
Miles, a universal rewards platform and app that allows anyone with a smartphone to earn miles for all of their travel, raised $12.5 million in Series A funding round led by Scrum Ventures, with participation from TransLink Capital and Japan Airlines (JAL Innovation Fund), TechNexus Venture Collaborative, Aioi Nissay Dowa Insurance (MS&AD), Synapse Partners and several other prominent individual investors. The raise brings Miles’ total funding to $20 million, with other notable investors including JetBlue Technology Ventures, Liil Ventures, Porsche Ventures, Panasonic, SAIC, Sony Innovation Fund, Urban Us (VC), and Gabe Klein (Co-founder CityFi).
Rodo, an e-commerce startup focused on buying and selling vehicles, raised $18 million in a Series B financing round led by Holman Enterprises and Evolution VC Partners. The round also included existing investor IAC along with Kevin Hart’s HartBeat Ventures as well as auto industry veterans RML Automotive vice chairman Mack McLarty, McLarty Diversified Holdings Chairman and CEO Franklin McLarty and Ken Schnitzer, the former chairman of Park Place Automotive Group. Rodo, which has raised a total of $45 million to date, plans to use the funds to scale its dealership network nationwide and invest in marketing and customer acquisition.
Sonatus, the California-grown automotive software company, raised $35 million in a Series A round that attracted high-profile technology and automotive industry companies including Hyundai Motor Group’s Kia Corporation, SAIC Capital and LG Electronics. Silicon Valley VC Translink Capital led the round, with other investors including Marvell Technology, UMC Capital and Wanxiang Group Company.
Tesla said it will secure nickel from the commodity production giant BHP. The companies didn’t disclose the amount of mineral that will be supplied, just that it will come from BHP’s Nickel West division mines in Western Australia. The two companies also agreed to work together to increase battery supply chain sustainability and to identify ways to decrease carbon emissions from their respective operations using energy storage paired with renewable energy.
Uber Freight, the logistics business spun out of Uber in 2018, acquired TransPlace for $2.25 billion from private equity group TPG Capital. It’s one of those upstream meets downstream type of deals. The union will fold one of the largest managed transportation and logistics networks into Uber Freight’s platform, which connects truck drivers with shippers that need cargo delivered. Uber Freight’s brokerage will continue to operate independently from Transplace’s services, the company said.
This deal marks a ramping up of Uber Freight’s business as it aims to carve out market share in its existing markets and an expansion in Mexico. Uber Freight also sees the acquisition as a means to accelerate the company’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022.
Policy corner
Welcome back to Policy Corner!
EV rebates and tax credits are a well-known incentive mechanism to encourage Americans to make the switch to electric, but people looking for micromobility incentives have historically been out of luck. A new bill introduced in the Senate is looking to change that. The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act would give consumers a refundable 30% tax credit on the purchase of an electric bicycle, up to $1,500.
Qualifying bikes must be under $8,000 dollars and reach a max speed of no more than 28 miles per hour. So that means a huge swath of the market would be eligible for the credit. A sister bill was introduced to the House earlier this year. If it passes in both parts of Congress, it would then head to President Biden’s desk.
There’s an interesting interview with Rep. Earl Blumenauer, one of the legislators who introduced the bill in the House. (Just a note, it was conducted by The Scenic Route, a vertical of e-bike seller Rad Power Bikes.) The Congressman talks about how e-bike incentives could fit into the larger goals of the massive infrastructure bill currently being mulled by lawmakers.
“I was talking to the Secretary of Transportation yesterday about the opportunities we have with this big infrastructure package and this is one of those elements that ties in with what we’re doing with the tax system,” Blumenauer said. “It reduces traffic congestion, there’s less pollution to contend with, and it eases the problem of parking.”
I live in Austin, where the hills have dissuaded me from cycling around — yet, the majority of my car trips are less than four miles. I’ve often thought that an electric bike would be a good way to use my car less. I’m sure many other Americans feel similarly.
— Aria Alamalhodaei
Notable news and other tidbits
As per ushe, there is a lot to get to this week. When will the news cycle slow down?
Autonomous vehicles
Argo AI and its backer and customer Ford had the big AV story of the week. The two companies announced plans to launch at least 1,000 self-driving vehicles on Lyft’s ride-hailing network in a number of cities over the next five years, starting with Miami and Austin. I get deep into the details in the story, but the tl;dr includes Lyft taking a 2.5% stake in Argo, which now has a valuation of $12.4 billion.
The first Ford self-driving vehicles, which are equipped with Argo’s autonomous vehicle technology, will become available on Lyft’s app in Miami later this year. Austin will follow next year, with the remaining U.S. cities being added to the Lyft app in 2023 and beyond. Argo currently tests in Detroit, Palo Alto, Pittsburgh and Washington, D.C.
Jody Kelman, who heads up Lyft’s Autonomous, the company’s self-driving deployment business unit, answers the why we should care question: “It’s the biggest deployment certainly that we’re doing and that I think anyone else is doing. One thousand cars across six markets is a big leap forward in terms of scaled commercialization.”
Mobileye expanded its autonomous vehicle testing program to New York City as part of its strategy to develop and deploy the technology. If you’re not watching Mobileye, you should be — even those who don’t agree with the company’s approach.
New York City joins a number of other cities, including Detroit, Paris, Shanghai and Tokyo, where Mobileye has either launched testing or plans to this year. Mobileye launched its first test fleet in Jerusalem in 2018 and added one in Munich in 2020.
Waymo is expanding into AV hub Pittsburgh. The company will start by hiring around a dozen engineers, a source familiar with the move told TechCrunch, and they’ll co-locate in Google’s existing offices in the Bakery Square district. As of Thursday, only around three open positions for the Pittsburgh area were listed on Waymo’s website, but the company will be adding more roles soon.
Notably, some of the new team will come from Pittsburgh-based RobotWits, a tech startup focused on autonomous vehicle decision-making. Waymo acquired RobotWits’ IP rights and some members of its engineering and technical team as well as the company’s founder and CEO Maxim Likhachev are joining Waymo.
Electric vehicles
Arrival, the commercial electric vehicle company, has been chosen to build electric buses for the City of Anaheim, California. The Federal Transportation Administration awarded Anaheim a $2 million grant in 2019. The city’s transportation network announced the plan to partner with Arrival to achieve its goal of running California’s first all-electric bus fleet by 2025.
Battery joint ventures have become the hot must-have deal for automakers that have set ambitious targets to deliver millions of electric vehicles in the next few years. TechCrunch’s Rebecca Bellan digs into what is driving this trend and provides a roundup of the latest deals.
GM said it will add a full-size electric pickup truck to its GMC lineup, the latest in a string of EV product announcements by the automaker in the past year as it pushes to deliver more than 1 million electric vehicles globally by 2025. GM didn’t provide much more, but we can expect it to follow the GMC Hummer EV pickup that is coming late this year.
Tesla CEO Elon Musk said the automaker will allow other electric vehicles to access its global network of chargers later this year. Musk has been chattering about this idea for years now; what made me take it a skosh more seriously is that he attached a timeline to this. My prediction is that Tesla owners will push back.
Speaking of Musk, the technoking said the automaker will ‘most likely’ resume accepting bitcoin as a form of payment once the mining rate for the cryptocurrency reaches 50% renewables. He made the comments at a virtual panel discussion hosted by the Crypto Council for Innovation. You might recall that Tesla started accepting bitcoin as a form of payment in February, the same time that the company purchased a historic $1.5 billion in bitcoin — before reneging on its decision just three months later, citing environmental concerns.
Mercedes-Benz laid out a €40 billion ($47 billion) plan to become an electric-only automaker by the end of the decade. To be clear, Mercedes did give itself some wiggle room in that ambitious goal, noting that it will be “ready to go all electric by the end of the decade, where markets allow.” This could mean that some combustion engine Mercedes, which are already equipped with 48-volt mild hybrid systems, will be produced and sold beyond the decade.
This target is driving Mercedes to become more vertically integrated, secure its supply chain and retraining its workforce. For instance, the automaker noted that it has acquired U.K.-based electric motor company YASA, and has determined it will need battery capacity of more than 200 gigawatt hours. To hit meet those needs, Mercedes plans to set up eight battery factories with existing partners and one new partner to produce cells.
In-car tech and ADAS
GM is rolling out three major upgrades including automatic lanes changes and towing support to its hands-free driver assistance system Super Cruise and making it available in six vehicles, including the 2022 all-new GMC Hummer EV pickup truck.
Speaking of Super Cruise, GM isn’t OK with Ford naming its own ADAS BlueCruise. GM and its self-driving vehicle subsidiary Cruise, filed a lawsuit against Ford claiming that the BlueCruise name is too similar to its Super Cruise trademark and Cruise’s trademark, The Hill reported.
Ride-hailing, car-sharing and other stuff
Getaround was fined nearly $1 million by the Washington, D.C. Office of the attorney general for operating without a license and other violations, part of a settlement of what the peer-to-peer car rental startup calls “politically motivated allegations.”
People makin’ moves
Aurora has hired Yanbing Li as its new senior VP of engineering, according to a posting on LinkedIn. Yanbing comes from Google, where she lead the enterprise services platform organization in Google Cloud.
Joby Aviation announced its board of directors and it contains some high-profile transportation folks, including Zoox CEO Aicha Evans, Dr. James Kuffner, CEO of Toyota’s Woven Planet Holdings,·Reid Hoffman, LinkedIn Co-Founder and Co-Lead Director of Reinvent Technology Partners, Google general counsel Halimah DeLaine Prado and Dipender Saluja the managing director of Capricorn Investment Group.
Of course, the board also includes Joby founder and CEO JoeBen Bevirt, Founder and executive chairman Paul Sciarra.
Velodyne Lidar lost its CEO, the latest in a series of issues and internal drama that have cropped up since the sensor company struck a deal to merge with special purpose acquisition company Graf Industrial Corp. CEO Anand Gopalan, who was previously CTO, announced he is leaving the lidar company at the end of July.
A team of top executives that includes COO Jim Barnhart, CFO Drew Hamer, Chief People Officer Kathy McBeath and Chief Commercial Officer Sinclair Vass will run the company as a search for a new chief executive is conducted. The company didn’t disclose why Gopalan was leaving.
Xos, the electric truck company that is set to go public via SPAC merger later this summer, announced nominees for the board that will represent the combined company. Beyond Xos co-founders Dakota Semler and Giordano Sordoni, the list includes: Burt Jordan, the former VP of global purchasing operation and supply chain sustainability at Ford, S. Sara Mathew, the former chair and CEO at Dun & Bradstreet Corporation, George Mattson, who co-dounded NextGen Acquisition Corporation, and Ed Rapp, the former group president for resource industries and former CFO at Caterpillar Inc.
