Cruise rolls out autonomous ride-hailing. $50M lidar raise. Nvidia makes AV investment.
Power struggles
Hi there,
Financing to private EV companies is roaring upward after the asset sales and bankruptcies that plagued the early 2010s. Today’s $1B investment in Chanje, a California-based startup developing electric medium-duty trucks, pushed investment well over $2B in 2017 to date.
As traditional VCs have withdrawn from the EV space, funding momentum is largely being driven by deep-pocketed Asian investors. Auto and tech corporates are prominent backers; Chanje’s investment was led by Hong Kong-based EV maker FGE.
Competition is fierce in the passenger car market, where incumbents are mobilizing (sorry) billions to boost EV programs. Audi alone is cutting $12B in costs to invest in electrification.
Even 14-year-old Tesla is still hungry for capital in its quest to go mainstream, now targeting a $1.5B debt offering. Although EV economics have improved vastly since Tesla’s inception, EV upstarts still require constant streams of capital to reach scale.
Chanje is surely hoping to avoid the struggles of other US-based, Chinese-backed, and (initially) well-funded players like Faraday and Lucid. Among others, Chanje is seeking better fortunes with larger form factors and EV-friendly use cases. The company says its vans’ 100-mile range is well-suited for urban delivery routes, which average around 70 daily miles.
Another example is Proterra, which is going head-to-head against leading electric busmakers like BYD. Its vehicles could fit nicely with short urban routes, and patents describe its fast-charge tech for top-offs in bus terminals. Check out our full Proterra case study in our 72-page EV briefing.
These bets rely on fleet operators like delivery companies and metro transit agencies swallowing significant fixed costs upfront in the hopes of drastically lowered operating costs down the line.
Though some transit agencies (particularly in the US) are strapped for cash, at least LA Metro recently set an ambitious goal of electrifying or otherwise eliminating tailpipe emissions from its 2,200+ strong bus fleet by 2030.
Tl;dr
With each week now bringing a flood of developments in auto and transport tech, we’ll make a habit of extracting highlights up top for your reading convenience:
The Travis Kalanick lawsuit: The week began with rumors swirling that the ex-Uber CEO was looking to muscle back into his former role, hiring “CEO advisory” firm Teneo. Early Uber investor Benchmark Capital is now suing Kalanick for his alleged power grab. The firm led the original charge behind his resignation, and currently owns about 13% of the company compared to TK’s 10%.
AV fleets: Cruise has racked up 1,000 trips on its AV ride-hailing service for employees, which is notably operating within San Francisco city proper. After closing its Mobileye acquisition, Intel announced it would build a fleet of 100+ Level 4 autonomous vehicles.
SoftBank eats everything: The conglomerate and its $93B Vision Fund continue distorting the private markets funding environment; mobility is still in the crosshairs, with SoftBank mulling an Uber or Lyft deal while also partnering with bike-sharing unicorn Ofo.
Mazda’s strategy: As a smaller player, Mazda has focused its resources on gas-engine development rather than spreading R&D across alternative powertrains. It announced a breakthrough in HCCI tech this week (which could boost fuel economy 20-30% in the near term) while also securing Toyota as a partner for EV know-how down the road.
As always, read on for the full roundup. Have a great rest of the week!
