Auto's Remake: Part 2

More on the the catalysts of change for the automotive industry.

Welcome to the second issue of Transport 3.0. We’re leading with a continuation of the other five top factors and events which will feed disruption in automotive in 2022. The first five were covered last week.

1. More people will work from home permanently. As the number of stay-at-home of workers increases, traffic volumes and patterns will change - particularly in cities with large bedroom communities. This has long-term consequences for city and road planners. Expensive public transit projects are now even less viable. So are large parking garage projects. Expect a lot of rethinking and budget re-allocation on these matters at city and regional administrations in 2022 as the scale of the WFH movement becomes clearer.

2. The EV charging infrastructure will grow rapidly as well-funded startups develop new charging technology and more governments and private entities build out stations. We expect many auto and truck OEMs - motivated by new revenue opportunities - to roll out their own programs. Big oil will also get more into the game. According to Reuters, London-based BP is close to a point where they can make more money charging an EV than filling an IC vehicle with fuel. The company says electricity sales for EV charging grew 45% in the third quarter of 2021 from the previous quarter and it plans to grow its EV charging business from 11,000 charging points currently to 70,000 by 2030. In countries like Australia where there are long distances with low population they are using crowdfunding to finance installation of charging points at strategic points along lonely highways.

3. OEMs will introduce vehicle-as-a-service (VaaS) programs either on their own or in partnership with dealer groups, rental fleets, or existing ride share players. The Tesla tie-up with Hertz is an indication of what’s coming. Auto makers have had a history of owning a piece or all of rental companies, mostly as a way to guarantee sales volumes for their cars. As more of the population eschews car ownership, they need new revenue sources. In commercial applications, VaaS is a way to de-risk adoption of electric vehicles. Truck OEM Mack just introduced a VaaS program to make it easier to buy or lease its LR Electric garbage trucks. Customers pay a monthly amount for the chassis and truck body as well as a comprehensive vehicle protection plan.

4. More breakthroughs in autonomy. As the sensors and the AI gets better, expect autonomous cars and trucks to travel further distances without human assistance. We will get closer to the tipping point where confidence in sensors and software have nexus with risk tolerance. Most of the initial use cases will be in local delivery and longer freight hauls on fixed routes. Truck autonomy developer TuSimple is creating an Autonomous Freight Network between a number of south western cities. It recently demonstrated a 550-mile driverless run and is currently running driverless between Tucson and Phoenix regularly. Truckload carrier JB Hunt has an alliance with TuSimple competitor Waymo and is also experimenting with driverless trucks in Texas.

5. The remaking of the dealership. The old vehicle sales model is changing. It started with the Internet and the increased price transparency it allowed customers. Now dealers will need to deal with electrification. Their high-margin parts and service business will shrink and they will need to invest heavily in new maintenance systems and training. We see the more enterprising ones getting into the vehicle media content business - selling and distributing subscriptions to content designed for the vehicle entertainment and information systems. This could include voice-based FAQs which answer drivers’ questions about the vehicle’s operation or repair.

Briefly

According to the Financial Times, EV sales in Europe eclipsed diesel vehicle sales for the first time in December. One wonders if the VW diesel emissions scandal in recent years had a hand in speeding up that milestone.

The Virginia Department of Motor Vehicles is using an in-road sensor technology called Tire Anomaly and Classification System (TACS) to identify trucks with flat, missing, mismatched or underinflated tires as they are passing over the state’s highways. Drivers of trucks with bad tires are called into weigh stations and told to get them repaired. In one year TACS was able to identify and remove 13,000 unsafe tires from trucks traveling on Interstate 81. That should significantly reduce the number of sudden tire failures and hazardous rubber “alligators” on Virginia highways. Other states should follow suit.

According to a report in FreightWaves, electric commercial vehicles already have a lower total cost of ownership than comparable diesel-powered vehicles. The report cites a study from data firm ACT Research which indicates that 72% of commercial vehicle applications across all regions are already at a positive TCO. ACT is forecasting that 100% of battery-electrics will have a TCO advantage over diesel by 2030.

Deals

UK-based autonomous vehicle startup Wayve raised a $200 million Series B funding round led by Eclipse Ventures and include D1 Capital Partners, Baillie Gifford, Moore Strategic Ventures and Linse Capital, as well as Microsoft and Virgin, and early-stage investors Compound and Balderton Capital. The company is focused on last-mile delivery vehicles and previously received investment from the large grocery concern Ocado.

Phantom Auto, which hopes to deploy thousands of remote-controlled forklifts, has signed major logistics players ArcBest and NFI Industries as both investors and clients. Phantom allows clients to run semi-autonomous forklifts using human operators thousands of miles away, helping alleviate labor shortages in warehouses.

Soelect, a Greensboro, N.C.-based solid-state battery component developer, raised $11 million in Series A funding from investors led by Lotte Ventures and was joined by investors including GM Ventures, and KTB Network.

Wireless charging technology developer Resonant Link raised $9.3 million in a seed round led by The Engine, joined by Volta Energy Technologies, Emerson Collective, Scout Ventures, Urban Us, and FreshTracks Capital. 

French-based IoT titan Sigfox has filed for bankruptcy. The company, which had raised over $300 million in venture capital, cited slow sales resulting from Covid-19 for its demise. It’s hoping to find a buyer to keep its giant network of sensors operating. It has a number of clients in transportation and logistics.

Celestial.ai, a Sunnyvale, Calif.-based AI accelerator company, raises $56 million in Series A funding led by Koch Disruptive Technologies and was joined by Temasek’s Xora Innovation Fund, The Engine, Tyche Partners, M-Ventures, IMEC XPand, and Fitz Gate.

Next week: We look at the growing EV charging business and how it plays a key role in the increased adoption of EVs. Subscribe below to Transport 3.0 to get the next issue in your inbox and stay on top of fast-changing news and trends in transport.

If you have a new transport-focused tech product or service to talk about or other news to share, contact us at transport30@dekenmedia.com