š Car Talk - Issue #43 (V2G, Revel, Arrival, Ola)
Hi friends
In the last issue, I urged folks to donate to the COVID relief effort in India. I was overwhelmed by the number of folks who pitched in, far exceeding my expectations. Thanks to all of you for your generosity!
Also - with this issue, CarTalk is one year old! Woohoo! Season 1 of CarTalk involved the characters (okay, just me) finding their voices. Iām going to think about where to take this post-COVID Season 2 of CarTalk - whether it is more interviews, more deep-dives, more regional commentary. Suggestions welcome!
As for this birthday issue, I had a good time writing it you guys!
Buckle up!
Insource/Outsource?
This topic will continue being hot in new mobility with hundreds of thousands of collective hours spent deciding whether it is better to be a master of your own fate (I mean.. supply chain) and make automotive components yourself, or whether it is better to outsource your weaknesses away? Hereās a recent round-up:
Exhibit # 1: Ford has started flirting with the idea of insourcing their batteries. Their current supplier (SK Innovations from S. Korea) had to overcome significant legal hurdles to supply batteries to Ford and VW in North America. Meanwhile, General Motors is partnering with LG Chem to erect battery factory after battery factory. Iām not a betting man, but if I were, Iād bet that Ford will shortly break up with their current battery supplier. It is the only way to make the Mach-E more affordable and offer more versatility in range. Link
Exhibit # 2: Argo AI (backed not-s0-coincidentally by Ford) demonstrated that their in-house LIDAR can sense objects as far as 400 meters away. This is bad news for pure-play LIDAR companies like Velodyne.
Why I bring that up - Flirty Ford was flirting with Velodyne also at one point, even holding a >7% stake in the company worth $227 million, while simultaneously having invested $1B in Argo. Six months later, Ford dissolved their Velodyne stake and doubled down on Argoās in-house LIDAR. Ford seems to have thrown all options on the wall to see what sticks. Not a knock, Iād have done the same. Link
(By the way, I like #FlirtyFord. Donāt you?)
Exhibit 3: Volkswagen will design its own AI chips to unlock self-driving. This is in line with companies like Tesla, Apple, who design their own silicon. And in contrast with OEMs like Mercedes, who decided to use Nvidiaās hardware for self-driving. Link
Exhibit # 4: This will buck the in-source trend! Volvo is outsourcing their infotainment software platform to Googleās Android Automotive, giving up on their in-house āSensus Connectā effort. For what it is worth, General Motors as well as #FlirtyFord have signed up to use Googleās OS too. In doing so, all three companies lose a key differentiator for customers. Or perhaps the customer doesnāt care for a differentiated infotainment experience? Weāll find out. Link
Long story short - weāll continue hearing such updates āCompany X is determined to make a go of it on their own, meanwhile Y is partnering with Z to affect the same outcomeā. Is there a right answer here? I personally believe there is - if you have the resources (i.e. land, factories, human talent, cold hard cash), insource it! It is a strong opinion, weakly held.
Stop trying to make Vehicle-To-Grid Happen
Every time a carmaker launches an EV model that promises vehicle-to-grid (V2G) applications, pockets of Twitter burst into applause. Like here, or here.
I, on the other hand, donāt really get V2G. I mean, I get the premise - charge your EV battery during non-peak hours and when it is peak time, send the AC power back into the grid. Or use your EV battery to power an electric stove while camping, like Rivian wants you to. Orrrrrr, use the EV battery during natural disasters, like Nissan was claiming at one point. All of this is technically feasible - an EV is a giant battery on wheels, after all!
That said, the technical specs for a battery not only differ for mobility applications vs storage applications, these specs are somewhat orthogonal. For instance - in the context of an EV, you want your battery pack to have:
Rapid charge and discharge cycling ability: when you floor the accelerator, you want your EV to fly, necessitating the rapidness in charge/discharge
Energy density: For a given form factor, you want to squeeze the most miles out of a battery pack. Range anxiety isnāt entirely dead, guys
Reliability: Given the cells in battery are working on the cutting edge of physics, you want them to not create thermal events (EV-speak for fire!)
In the context of stationary energy storage, you want the battery packs to have:
A large number of charge-discharge cycles: This lets you use the battery packs to store energy for years on end
Low, low cost
(This link covers the specs for EV batteries in a way I never could.)
As an analogy, while both stilettoes and sneakers fall in the category of shoes, they serve very different purposes. You probably donāt want to wear sneakers to a boardroom meeting (unless youāre Steve Jobs), and doing lunges and squats in stilettoes will just be suicide for your ankles.
I like what Redwood Materials is doing here. Take EV batteries, recycle them for raw materials, repurpose raw material into batteries for energy storage solutions. That is the most sustainable and economically friendly path forward!
Someone please explain V2G a little better to me if I missed a nuance or two. Link
Mobility In The US
Lyft sells autonomous vehicle division to Toyota: Hereās the state of the union on autonomous technology bake sale:
Lyft sells AV unit to Toyota for $550M
Uber āsoldā its AV unit to Aurora for a 26% stake in the new company
Zoox was sold to Amazon for >$1B
Voyage sold to Cruise for an undisclosed sum
Lyft has often been described as āUber, but with lower capexā (paraphrasing from this podcast), so shedding a business unit that was going to be weighing down the balance sheet for a while makes total sense. And Toyota can, in fact, string along an unprofitable business for a long time. I mean - theyāve continued to be gung-ho about hydrogen fuel cells since the 1970s, havenāt they? Heyoooooo!! Link
Revelās electric taxi service in NYC: This one is a minor development that wouldnāt have made it to CarTalk for two reasons - it is too small-fry, and Tesla is sort of in the mix. Normally, Iād pass.
Still, Iāll include it this time for the drama thatās unfolding. If youāre in the US, chances are youāve seen Revelās scooters/mopeds. Now Revel is getting into the taxi business with, get this, an all-electric fleet comprising of only Teslas. So far so good, except:
NYC arguably has the best transportation infra in the entire country. Do they really need more taxis clogging the streets?
The NYC taxi company (TLC) is gettinā territorial because Revel is adding more taxis on the road and bypassing the medallion system
On that second point, Revel is exploiting a loophole - all-electric fleets donāt need the blessing of the medallion gods. To which TLC says:
āTLC capped for-hire vehicles because supply already exceeds demand,ā she said in a statement. āThe electric battery exemption exists to encourage already-licensed cars to go green, not to flood an already saturated market or to disenfranchise the Yellow Taxi sector in Manhattan.
Yeah but the law doesnāt say that though, does it? TLCās only bet is that the supply-demand forces deem Revelās offering dead in the water. This is unlikely, EVs are cheaper to operate than gas vehicles and Revel has enough VC backing to continue burning cash if needed. Link
IEA wants western governments to stockpile metals: Well, thereās a race to build batteries and China is winning it. The International Energy Agency wants western governments to stockpile metals relevant to EV manufacturing - cobalt, lithium, nickel. The race for Lithium is already raising environmental concerns. This could get ugly real soon unless the Fed steps in with environmentally friendly mining regulations. Link
Related: the price of copper hit $10,000 for the first time in a decade Link
IEA also says: that the total number of electric vehicles on the road by 2030 will be 135 million Link
QuantumScape hit by short-sellers: Like the rest of the new mobility world, Iāve been following QuantumScape for a long time and wrote about them almost a year ago. Recently, they were the targets of an expose by a short-selling firm alleging that QuantumScape is, well, a fraud. They called QS a āpump and dump scam by Silicon Valley celebritiesā. The link to the report is here (188 pages). QuantumScapeās CEO defended the company with lots of words and very little data. The world is waiting for results, seƱor. Link
Mobility Around The World
Arrival + Uber partner on taxis: This one got a lot of airtime but as Iāve written about Arrival before - I donāt really get how all of Arrivalās claims can work together (low capex factories, composite materials, cheap cars, all in one). Uberās role here is to provide design input to ensure electric taxis are robust for ride-hailing applications.
The Arrival Car is intended to be a relatively low-cost electric vehicle designed for ride-hail and car-share fleets, initially in the U.K. and European Union
However, custom-made electric taxis make a lot of sense for Uber! They can lower their operating costs with EVs, ensure a great customer experience with custom taxis, basically run their own taxi company instead of just being a platform to match drivers with riders. Wishing them the best with Arrival! Link
Russian AV company Yandex clocks 7 million miles: I donāt keep as close of an eye on Yandex as I should. This Russian AV company had clocked ~2 million miles just a year ago, now they are at 7 million miles. The only other AV company with more announced miles under their belt is Waymo. Yandex started testing in the US recently, and this piece from the article was interesting to me:
āWhen we first deployed in the US, passengers commented on how suddenly the car would change lanes. We trained the vehicle for Moscow, where you might only have a gap of a few meters to shift from one lane to other. The same maneuver, in the US, can actually startle passengers. So now weāve adjusted that based on location.ā
Region-based customization of autonomous driving - very cool, isnāt it? That, or maybe they are just covering up their jerky-autonomous software! Link
Ola and the worldās largest 2-wheeler charging network: Ola is India is going from strength to strength. After the worldās biggest scooter factory, Ola plans to build the worldās largest scooter charging network in India, creatively called the āHypercharger networkā. This is one of those āby defaultā prizes that Ola gets to enjoy, nonetheless, great news for the consumer!
Also, I was reading about Ola the other day and this jumped out to me:
āThis network, the Hypercharger Network is focused on two-wheelers. In due course, we will expand this network to four-wheelers also, when our four wheeler products come out in a couple of years,ā he said.
I wasnāt aware of this development, wow. So Ola plans to manufacture electric cars too? Nice! Going to keep a closer eye on Ola here on out! Link
Maruti shuts down factories in India to divert oxygen for COVID medical supplies: First the company said:
āAs part of the car manufacturing process, Maruti Suzuki uses a small amount of oxygen in its factories while relatively much larger quantities are used by the manufacturers of components.
Later they said:
Although Maruti Suzuki does not use liquid oxygen in its production processes, several suppliers use oxygen in large quantities,ā
Well, which is it, Maruti? Link
Saudi considering a home-grown EV company: Even as gasoline turns out to be the big winner of COVID (profits from the fuel are at near all-time highs) as people eschew public transit and drive more, Saudi is hedging their bets and aiming to start up a homegrown electric vehicle company. Link
Thatās all from me folks. Have a great week!
By Sachin Seth
This weekly newsletter on new mobility is curated by me as a passion project. Yes, the name is an homage to the NPR show of the same name! If you like it, please forward it to whoever is interested in this space. Cheers!
I have worked for many years on automotive products and currently work @ Tesla. All opinions are my own.
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