FreshRSS

🔒
❌ About FreshRSS
There are new available articles, click to refresh the page.
Before yesterdayYour RSS feeds

Cadillac reveals Lyriq, its all-electric SUV flagship loaded with luxury and tech

By Kirsten Korosec

GM unveiled Thursday the Cadillac Lyriq, an all-electric crossover dripping in luxury and tech-forward touches. Promising more than 300 miles of range, it aims to propel the brand into a new electrified era.

That new era for Cadillac will have to wait though. The company said the Lyriq will go into production in the U.S. in late 2022, more than two years after its reveal date. The Cadillac Lyriq will be a global product, meaning it will be headed to China as well. Production in China will begin ahead of the U.S., according to Cadillac.

The Lyriq is just one in a roster of 20 electric vehicles that GM plans to bring to market by 2023. But it will be a critical one for the Cadillac brand. “The Lyriq sets the benchmark for future Cadillacs,” Michael Simcoe, GM’s vice president of global design, said during the reveal.

The Lyriq embodies the kinds of luxury touches a Cadillac customer has come to expect, from the “black crystal” grille and jewelry box-styled drawer to the 33-inch vertical LED touchscreen display and AKG sound system.

Cadillac aimed for a modern and aggressive design that it achieved by giving the Lyriq a low, fast roofline and wide stance. That “black crystal” grille is a dynamic feature with “choreographed” LED lighting that greets the owner as they approach the vehicle. The LED lighting continues in the rear with a split taillamp design.

Inside the vehicle are backlit speaker grilles, curved screens with hidden storage and orchestrated lighting features similar to the dynamic lighting outside.

The Lyriq will be available in rear-wheel drive and performance all-wheel drive configurations. The 100 kilowatt-hour battery pack will provide more than 300 miles of range, according to the company’s internal testing. It will come with DC fast charging rates over 150 kilowatts and Level 2 charging rates up to 19 kW.

Cadillac LYRIQ EV

Image Credits: Cadillac

The tech inside the Lyriq includes the latest version of the hands-free driver assistance system called Super Cruise that first debuted in the Cadillac CT6 several years ago. Super Cruise uses a combination of lidar map data, high-precision GPS, cameras and radar sensors, as well as a driver attention system, which monitors the person behind the wheel to ensure they’re paying attention. Unlike Tesla’s Autopilot driver assistance system, users of Super Cruise do not need to have their hands on the wheel. However, their eyes must remain directed straight ahead.

The Lyriq will also come with a dual-plane augmented reality-enhanced head-up display. The head up display, which is projected on the windshield in the sight line of the driver, shows a near plane indicating speed and direction and a far plane that displays navigation signals and other important alerts. The effect is a layered look.

A vehicle has to be compelling visually to attract buyers. But the underlying foundation of the Lyriq is where GM has placed its biggest bet. Earlier this year, the automaker revealed a sweeping plan to produce and sell EVs that hinges on a new scalable electric architecture called Ultium that will support a wide range of products across all of its brands, including Buick, Cadillac, Chevrolet and GMC. The EV portfolio will include everything from compact cars and work trucks to large premium SUVs and performance vehicles.

This modular architecture, called “Ultium,” will be capable of 19 different battery and drive unit configurations, 400-volt and 800-volt packs with storage ranging from 50 kWh to 200 kWh, and front, rear and all-wheel drive configurations. At the heart of the new modular architecture will be the large-format pouch battery cells manufactured at this new factory.

The Ultium battery has a nickel-cobalt-manganese-aluminum chemistry that uses aluminum in the cathode to help reduce the need for rare-earth materials such as cobalt, according to GM. The company said it has been able to reduce the cobalt content by more than 70% compared to current GM batteries.

GM recently started construction on a 3-million-square-foot factory that will mass-produce Ultium battery cells and packs. The Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio is part of a joint venture between GM and LG Chem that was announced in December. At the time, the two companies committed to invest up to $2.3 billion into the new joint venture, as well as establish a battery cell assembly plant on a greenfield manufacturing site in the Lordstown area of Northeast Ohio that will create more than 1,100 new jobs. The factory will be able produce 30 gigawatts hours of capacity annually.

[gallery ids="2028480,2028483,2028481,2028482,2028484,2028478,2028479"]

Uber’s delivery business is now larger than ride-hailing

By Kirsten Korosec

Uber reported its second-quarter earnings Thursday, and buried in the blizzard of less-than-rosy numbers is a stunning figure that illustrates how much the company has changed during the COVID-19 pandemic.

Uber’s delivery business — better known as Uber Eats — is now bigger than its original and core ride-hailing division, based on adjusted net revenue. Now, adjusted net revenue tells only a piece of this evolving Uber story. Income, or losses in the case of Uber’s delivery business, are also important.

Still, looking at the change of the past year, and specifically in the past two quarters, it’s clear that Uber’s strategy has shifted. And all eyes are on delivery.

Before digging deeper, let’s run a quick recap.

Uber’s reported net loss was $1.78 billion in the second quarter of 2020, down from a year-ago net loss of $5.24 billion. The company went public last year, resulting in various one-time, non-cash costs. The company’s net loss worked out to a loss of $1.02 per share. That was enough to beat analysts’ expectations of a $0.86 per-share deficit.

Uber missed on profitability in the quarter, but did surpass expectations on top line, posting more revenue than the $2.18 billion figure investors expected.

The shift to delivery

There are three key ways to weigh the company’s various businesses, of which only two are of material scale to Uber’s operating results, namely Mobility (ride-hailing), and Delivery (Uber Eats). Here’s how the pair stacked up in Q2 2020:

  • Delivery gross bookings: $6.96 billion
  • Mobility gross bookings: $3.05 billion

Here’s how those gross bookings results turned into adjusted net revenue:

  • Delivery adjusted net revenue: $885 million
  • Mobility adjusted net revenue: $793 million

And how those revenue results turned into adjusted profit, and adjusted losses:

  • Delivery adjusted EBITDA: -$232 million
  • Mobility adjusted EBITDA: $50 million

As you can see, Uber’s food delivery business is doing far more gross dollars in transaction volume. However, as Uber has a better take-rate (the portion of gross spend it gets to keep as revenue) with ride-hailing than Uber Eats, the two had far closer adjusted net revenue numbers. Here, again, Delivery beat Mobility.

When it came down to adjusted profit, Uber’s traditionally core business of ride-hailing generated the superior result, generating positive adjusted EBITDA, while delivery lost money using the same profit calculation method.

In Q1 2020, Mobility generated more gross bookings, adjusted net revenue and adjusted EBITDA than Delivery. In Q2, due to COVID-19 and its resulting economic impacts, two of the three numbers flipped. How fast the figures could change in the future if the market for ride-hailing recovers further is not clear. Today’s earnings call made it clear that Uber is more about bringing you food than taking you to the airport, and that’s a big change for the American company.

To be clear, ride-hailing isn’t going anywhere. It’s the dual focus of delivery and ride-hailing that Uber is counting on to get it through this rough patch of COVID-19 pandemic as well as fortify its revenue earning potential in more stable times.

“It’s become clear that we have a hugely valuable hedge across our two core businesses that is a critical advantage in any recovery scenario,” Uber CEO Dara Khosrowshahi said Thursday. “When travel restrictions lift we know the mobility trips rebound. If restrictions continue or need to be re-imposed our delivery business will compensate.”

Graphical context

For fun, here are the pertinent sections of Uber’s Q2 investor slides.

Here’s the company’s Mobility numbers:

uber mobility Q2 numbers

Image Credits: Uber

And, here are its Delivery results:

Happy number crunching!

Security bugs let these car hackers remotely control a Mercedes-Benz

By Zack Whittaker

Few could ever forget back in 2015 when security researchers Charlie Miller and Chris Valasek remotely killed a Jeep’s engine on a highway with a Wired reporter at the wheel.

Since then, the car hacking world has bustled with security researchers looking to find new bugs — and ways to exploit them — in a new wave of internet-connected cars that have only existed the past decade.

This year’s Black Hat security conference — albeit virtual, thanks to the coronavirus pandemic — is no different.

Security researchers at the Sky-Go Team, the car hacking unit at Qihoo 360, found more than a dozen vulnerabilities in a Mercedes-Benz E-Class car that allowed them to remotely open its doors and start the engine.

Most modern cars are equipped with an internet connection, giving passengers access to in-car entertainment, navigation and directions, and more radio stations than you can choose from. But hooking up a car to the internet puts it at greater risk of remote attacks — precisely how Miller and Valasek hijacked that Jeep, which ended up in a ditch.

Although vehicle security has gotten better over the past half-decade, Sky-Go’s researchers showed that not even one of the most recent Mercedes-Benz models are impervious to attacks.

In a talk this week, Minrui Yan, head of Sky-Go’s security research team, said the 19 security vulnerabilities were now fixed, but could have affected as many as two million Mercedes-Benz connected cars in China.

Katharina Becker, a spokesperson for Mercedes’ parent company Daimler, pointed to a company statement published late last year after it patched the security issues. The spokesperson said Daimler could not corroborate the estimated number of affected vehicles.

“We addressed all findings and fixed all vulnerabilities that could be exploited before any vehicle in the market was affected,” said the spokesperson.

After more than a year of research, the end result was a series of vulnerabilities that formed an attack chain that could remotely control the vehicle.

To start, the researchers built a testbench to reverse-engineer the car’s components to look for vulnerabilities, dumping the car’s software and analyzing the car’s internals for vulnerabilities.

The researchers then obtained a Series-E car to verify their findings.

At the heart of the research is the E-Series’ telematics control unit, or TCU, which Yan said is the “most crucial” component of the car, as it allows the vehicle to communicate with the internet.

By tampering with the TCU’s file system, the researchers got access to a root shell — a way to run commands with the highest level of access to the vehicle’s internals. With root shell access, the researchers could remotely open the car’s doors.

The TCU file system also stores the car’s secrets, like passwords and certificates, which protect the vehicle from being accessed or modified without proper authorization. But the researchers were able to extract the passwords of several certificates for several different regions, including Europe and China. By obtaining the vehicle’s certificates and their passwords, the researchers could gain deep access to the vehicle’s internal network. The car’s certificate for the China region had a weak password, Yan said, making it easier to hijack a vulnerable car in the country.

Yan said the goal was to get access to the car’s back end, the core of the vehicle’s internal network. As long as the car’s back-end services can be accessed externally, the car is at risk of attacks, the researchers said.

The way the researchers did this was by tearing down the vehicle’s embedded SIM card, which allows the car to talk to the cell networks. A security feature meant the researchers couldn’t plug the SIM into a router without freezing access to the cell network. The researchers modified their router to spoof the vehicle, effectively making the cell network think it was the car.

With the vehicle’s firmware dumped, the networking protocols understood and its certificates obtained and cracked, the researchers say they could remotely control an affected vehicle.

The researchers said the car’s security design was tough and able to withstand a number of attacks, but it was not impervious.

“Making every back-end component secure all the time is hard,” the researchers said. “No company can make this perfect.”

But at least in the case of Mercedes-Benz, its cars are a lot more secure than they were a year ago.


Send tips securely over Signal and WhatsApp to +1 646-755-8849 or send an encrypted email to: zack.whittaker@protonmail.com

Unagi, the iPhone of scooters, now has a subscription service

By Kirsten Korosec

Unagi, the portable and design-forward electric scooter company that made a splash with celebs and pop stars, has launched a subscription service.

The service, called Unagi All-Access, will be offered in New York City and Los Angeles. The company said it plans to expand to additional markets as it gathers customer feedback and refines the service.

Customers will be able to choose from two plans. There will be a pay-as-you-go monthly plan that costs $39 per month and a discounted annual plan for $34 a month. Unagi does charge a $50 initial setup fee, which means that first month will cost customers $89. The flat monthly fee includes maintenance and insurance for scooter theft or damage.

unagi model one scooter

Image Credits: Unagi

Once a customer subscribes, an assembled Model One scooter is shipped to their home within 24 hours, Unagi promises. The Model One costs $990 for customers who want to buy the scooter outright.

Once a customer cancels their subscription, Unagi reclaims the scooter, which is then put through an 80-point inspection. Unagi tells TechCrunch that it’s the same inspection that the scooters go through at the factory. There’s no written guarantee that subscribers will get a new scooter. However, Unagi said customers will likely get new scooters because the company has been ramping up production since the beginning of the pandemic to meet demand.

It is a risk for Unagi, but one the company is betting will pay off amid — and after — the COVID-19 pandemic.

“This model is well-suited to today’s world: as cities re-open, people are rethinking how they get to the supermarket, the post office and the park,” according to the company’s recent blog post announcing the service. “Data shows COVID-wary consumers are afraid of shared transportation, whether it’s the subway, an Uber or a shared scooter. They’re looking for safer alternatives.”

The company was already researching a subscription service before COVID-19 spread throughout the world, according to CEO David Hyman.

Unagi tested the idea last fall. A deeper study was launched in spring in partnership with UC Berkeley’s Haas Business School that determined demand was higher than expected.

“COVID just reinforced our desire to get it live and was the impetus for going live in both LA and NYC at the same time,” Hyman told TechCrunch in an email.

Unagi isn’t alone in this scooter subscription pivot, or what we like to call hardware-as-a-service. Others are also pursuing this business model, including Dance and Voi.

ChargePoint raises $127M as electric vehicle adoption grows among fleet operators

By Kirsten Korosec

Electric vehicle charging network ChargePoint raised $127 million in funding in a bid to expand its platform for businesses and fleets in North America and Europe.

A mix of existing investors from the oil and gas, utilities and venture industries added to the round, including American Electric Power, Chevron Technology Ventures, Clearvision and Quantum Energy Partners.

This latest addition, which was an extension of its Series H round, pushes ChargePoint’s total funding to $660 million. The company didn’t provide a valuation.

An increasing number of businesses and municipalities are turning to electric vehicles as governments enact stricter emissions regulations. Meanwhile, an increasing number of new electric passenger cars, SUVs and soon pickup trucks are coming to market. In the next 18 months, GM, Ford, Nissan, Volvo along with startups Polestar and Rivian will have electric vehicles in production. Then there’s Tesla, which has continued to scale its existing portfolio while preparing to add new vehicles, including its Cybertruck.

The upshot: ChargePoint is aiming to keep up with the pace of electric vehicle adoption. But it’s not all about expanding the network for privately owned passenger vehicles.

ChargePoint designs, develops and manufactures hardware, and accompanying software as well as a cloud subscription platform, for electric vehicles. The company might be best known for its branded public and semi-public charging spots that consumers use to charge their personal electric cars and SUVs as well as its home chargers. However, ChargePoint also has a commercial-focused business that provides hardware and software to help fleet operators manage their delivery vans, buses and cars. In all, the company has more than 114,000 charging spots globally. 

ChargePoint President and CEO Pasquale Romano said the shift towards electrification is intensifying for mainstream businesses and fleet operators. The new capital will help the company’s expansion plans keep on pace with the market, he added. Specifically, the funds will be used to commercial and fleet portfolio in North America and Europe and continue to scale policy, marketing and sales efforts.

Anthony Levandowski sentenced to 18 months in prison, as new $4B lawsuit against Uber is filed

By Kirsten Korosec

Anthony Levandowski, the former Google engineer and serial entrepreneur who was at the center of a lawsuit between Uber and Waymo, has been sentenced to 18 months on one count of stealing trade secrets. 

Levandowski won’t be heading straight to prison, however. Judge William Alsup postponed his incarceration due to the COVID-19 pandemic. He will report to prison at a future date yet to be determined.

Judge Alsup said that home confinement would “[give] a green light to every future brilliant engineer to steal trade secrets. Prison time is the answer to that.”

During court proceedings today, Levandowski also agreed to pay $756,499.22 in restitution to Google and a fine of $90,000.

The U.S. District Attorney’s office had recommended a 27-month sentence arguing in court today that Levandowski had committed the crime for ego or greed, and that he remained a wealthy man. 

“It was wrong for him to take all of these files, and it erases the contributions of many, many other people that have also put their blood, sweat and tears into this project that makes a safer self-driving car,” prosecutor Katherine Wawrzyniak said in her closing statement. “When someone as brilliant as Mr Levandowski and as focused on his mission to create self driving cars to make the world safer and better, and that somehow excuses his actions, that’s wrong.”

Levandowski had sought a fine, 12 months home confinement and 200 hours of community service. 

Levandowski spoke briefly on his behalf: “The last three and a half years have forced me to come to terms with what I did. I want to take this time to apologize to my colleagues at Google for betraying their trust, and to my entire family for the price they have paid and will continue to pay for my actions.”

The sentencing is the latest in a series of legal blows that have seen Levandowski vilified as a thieving tech bro, unceremoniously ejected from Uber, and forced into bankruptcy by a $179 million award against him.

And yet, Levandowski is not skulking away. Even as he faced more than two years in prison, the maverick engineer was plotting a comeback that could see him netting upwards of $4 billion from Uber. 

TechCrunch has learned that Levandowski recently filed a lawsuit making explosive claims against Waymo and Uber that, if proven, could turn his fortunes around with a multi-billion dollar payout. [Whether this is a last-ditch effort by a desperate man whose career has been upended by his own poor choices or a viable claim against a double-dealing tech titan, will be up to the courts to decide.

This new lawsuit, filed as part of Levandowski’s bankruptcy proceedings, mostly focuses on Uber’s agreement to indemnify Levandowski against legal action when it bought his self-trucking company, Otto Trucking. It also includes new allegations concerning the settlement that Waymo and Uber reached over trade secret theft claims. 

“No new comment on this most recent desperate filing,” an Uber spokesperson said in an email.

The quick backstory 

The criminal case that led to Levandowski’s sentencing Tuesday, as well as related civil proceedings and this new lawsuit, are part of a multi-year legal saga that has entangled Levandowksi, Uber and Waymo, the former Google self-driving project that is now a business under Alphabet.

Levandowski was an engineer and one of the founding members in 2009 of the Google self-driving project, which was internally called Project Chauffeur. Levandowski was paid about $127 million by Google for his work on Project Chauffeur, according to the court documents.

In 2016, Levandowski left Google and started Otto with three other Google veterans: Lior Ron, Claire Delaunay and Don Burnette. Uber acquired Otto less than eight months later.

Two months after the acquisition, Google made two arbitration demands against Levandowski and Ron. Uber wasn’t a party to either arbitration. However, under the indemnification agreement between Uber and Levandowski, the company was compelled to defend him.

While the arbitrations played out, Waymo separately filed a lawsuit against Uber in February 2017 for trade secret theft and patent infringement. Waymo alleged in the suit, which went to trial but ended in a settlement in 2018, that Levandowski stole trade secrets, which were then used by Uber.

Under the settlement, Uber agreed to not incorporate Waymo’s confidential information into their hardware and software. Uber also agreed to pay a financial settlement that included 0.34% of Uber equity, per its Series G-1 round $72 billion valuation. That calculated at the time to about $244.8 million in Uber equity.

Startling allegations in new lawsuit

This history matters because it is at the center of this new lawsuit that Levandowski filed in July.

He claims that the terms of the Uber-Waymo settlement – which have never been made public – included an agreement that Uber would never hire or work with him again. Levandowski says that resulted in Uber also reneging on its promises to support his trucking business. 

At closing of the Otto acquisition, an earnout plan would have given its owners “a percent interest of billions in profit for Uber’s new trucking business,” the lawsuit alleges. Levandowski would be made a non-executive chairman and control the new trucking business. Alternatively, Uber could decline to close on the transaction but instead grant Levandowski an exclusive license to Otto’s and Uber’s self-driving technology.

The lawsuit says that neither occurred, and that Uber “threatened to leave the transaction in limbo and force Mr. Levandowski to engage in protracted litigation to enforce his rights under the Otto Trucking Merger Agreement.” Uber then “coerced Mr. Levandowski to resign from Otto Trucking and to sell his interest in the company at a significant discount,” the lawsuit alleges.

The upshot: Levandowski believes and claims in the lawsuit that he should be awarded earnouts associated with the profits of Uber Freight  — the new name of Otto Trucking  — an amount that “should be at least $4.128 billion.” Uber made Uber Freight a separate business unit in August 2018. It has since set up a headquarters in Chicago and pursued an aggressive expansion even as it suffers losses. Bloomberg recently reported Uber Freight was seeking investment at a valuation of $4BN. In short, Levandowski wants the whole company. 

In addition, Levandowski hopes to force Uber to pay the $179 million sum that was awarded to Google in arbitration. (Google, for its part, is keen for Levandowski to prevail. A filing it made in the new lawsuit states: “[Levandowski] cannot come close to fully repaying Google (or his other creditors) in this bankruptcy without recovering on his indemnification claim against Uber.”)

The lawsuit also contains the remarkable accusation that Levandowski may not have been the only Google employee to take the company’s self-driving car secrets with them when they left. It notes an independent expert found that Uber’s self-driving software contained problematic functions that might require it to enter into a license agreement for use of Waymo’s intellectual property. 

The lawsuit claims that Levandowski did not work on software at Google or Uber, and thus “those trade secrets did not come from Mr. Levandowski, but rather a different former Google employee.” It goes on to claim that Waymo and Uber “settled issues relating to theft of trade secrets by individuals who are not Levandowski.” It does not identify any such person. 

“No new comment on this most recent desperate filing,” an Uber spokesperson said in an email. 

Crime and punishment

In August 2019, the U.S. District Attorney charged Levandowski alone with 33 counts of theft and attempted theft of trade secrets while working at Google. The charges disrupted Levandowski’s most recent project and prompted him to step down as CEO from a startup he co-founded called Pronto.ai that is developing an advanced driver assistance system product for trucks.

Levandowski and the U.S. District Attorney reached a plea deal in March 2020 that allowed him to avoid a protracted legal fight and a potentially lengthy prison sentence. Under the plea agreement, Levandowski admitted to downloading thousands of files related to Project Chauffeur. Specifically, he pleaded guilty to count 33 of the indictment, which is related to taking what was known as the Chauffeur Weekly Update, a spreadsheet that contained a variety of details including quarterly goals and weekly metrics, the team’s objectives and key results as well as summaries of 15 technical challenges faced by the program and notes related to previous challenges that had been overcome, according to the filing.

Levandowski said in the plea agreement that he downloaded the Chauffeur Weekly Update to his personal laptop on or about January 17, 2016, and accessed the document after his resignation from Google, which occurred about 10 days later.

In a victim impact statement, Waymo wrote that Levandowski’s “misconduct was enormously disruptive and harmful to Waymo, constituted a betrayal,” and requested that his sentence include “a substantial period of incarceration.” 

With no end to the COVID, it is possible that Levandowski’s latest lawsuit will be resolved before he even reports to jail. He may have been sentenced as a bankrupt, but he could enter prison a billionaire. 

Autonomous vehicle reporting data is driving AV innovation right off the road

By Walter Thompson
Grace Strickland Contributor
Grace Strickland is an attorney with more than six years of experience representing technology clients in cutting-edge industries, including autonomous transportation.
John McNelis Contributor
John McNelis is an intellectual property partner and leader of the autonomous transportation and shared mobility practice at Fenwick & West; he also chairs the California Technology Council’s Autonomous Transportation Initiative.

At the end of every calendar year, the complaints from autonomous vehicle companies start piling up. This annual tradition is the result of a requirement by the California Department of Motor Vehicles that AV companies deliver “disengagement reports” by January 1 of each year showing the number of times an AV operator had to disengage the vehicle’s autonomous driving function while testing the vehicle.

However, all disengagement reports have one thing in common: their usefulness is ubiquitously criticized by those who have to submit them. The CEO and founder of a San Francisco-based self-driving car company publicly stated that disengagement reporting is “woefully inadequate … to give a meaningful signal about whether an AV is ready for commercial deployment.” The CEO of a self-driving technology startup called the metrics “misguided.” Waymo stated in a tweet that the metric “does not provide relevant insights” into its self-driving technology or “distinguish its performance from others in the self-driving space.”

1/7 We appreciate what the California DMV was trying to do when creating this requirement, but the disengagement metric does not provide relevant insights into the capabilities of the Waymo Driver or distinguish its performance from others in the self-driving space.

— Waymo (@Waymo) February 26, 2020

Why do AV companies object so strongly to California’s disengagement reports? They argue the metric is misleading based on lack of context due to the AV companies’ varied testing strategies. I would argue that a lack of guidance regarding the language used to describe the disengagements also makes the data misleading. Furthermore, the metric incentivizes testing in less difficult circumstances and favors real-world testing over more insightful virtual testing.

Understanding California reporting metrics

To test an autonomous vehicle on public roads in California, an AV company must obtain an AV Testing Permit. As of June 22, 2020, there were 66 Autonomous Vehicle Testing Permit holders in California and 36 of those companies reported autonomous vehicle testing in California in 2019. Only five of those companies have permits to transport passengers.

To operate on California public roads, each permitted company must report any collision that results in property damage, bodily injury, or death within 10 days of the incident.

There have been 24 autonomous vehicle collision reports in 2020 thus far. However, though the majority of those incidents occurred in autonomous mode, accidents were almost exclusively the result of the autonomous vehicle being rear-ended. In California, rear-end collisions are almost always deemed the fault of the rear-ending driver.

The usefulness of collision data is evident — consumers and regulators are most concerned with the safety of autonomous vehicles for pedestrians and passengers. If an AV company reports even one accident resulting in substantial damage to the vehicle or harm to a pedestrian or passenger while the vehicle operates in autonomous mode, the implications and repercussions for the company (and potentially the entire AV industry) are substantial.

However, the usefulness of disengagement reporting data is much more questionable. The California DMV requires AV operators to report the number and details of disengagements while testing on California public roads by January 1 of each year. The DMV defines this as “how often their vehicles disengaged from autonomous mode during tests (whether because of technical failure or situations requiring the test driver/operator to take manual control of the vehicle to operate safely).”

Operators must also track how often their vehicles disengaged from autonomous mode, and whether that disengagement was the result of software malfunction, human error, or at the option of the vehicle operator.

AV companies have kept a tight lid on measurable metrics, often only sharing limited footage of demonstrations performed under controlled settings and very little data, if any. Some companies have shared the occasional “annual safety report,” which reads more like a promotional deck than a source of data on AV performance. Furthermore, there are almost no reporting requirements for companies doing public testing in any other state. California’s disengagement reports are the exception.

This AV information desert means that disengagement reporting in California has often been treated as our only source of information on AVs. The public is forced to judge AV readiness and relative performance based on this disengagement data, which is incomplete at best and misleading at worst.

Disengagement reporting data offers no context

Most AV companies claim that disengagement reporting data is a poor metric for judging advancement in the AV industry due to a lack of context for the numbers: knowing where those miles were driven and the purpose of those trips is essential to understanding the data in disengagement reports.

Some in the AV industry have complained that miles driven in sparsely populated areas with arid climates and few intersections are miles dissimilar from miles driven in a city like San Francisco, Pittsburgh, or Atlanta. As a result, the number of disengagements reported by companies that test in the former versus the latter geography are incomparable.

It’s also important to understand that disengagement reporting requirements influence AV companies’ decisions on where and how to test. A test that requires substantial disengagements, even while safe, would be discouraged, as it would make the company look less ready for commercial deployment than its competitors. In reality, such testing may result in the most commercially ready vehicle. Indeed, some in the AV industry have accused competitors of manipulating disengagement reporting metrics by easing the difficulty of miles driven over time to look like real progress.

Furthermore, while data can look particularly good when manipulated by easy drives and clear roads, data can look particularly bad when it’s being used strategically to improve AV software.

Let’s consider an example provided by Jack Stewart, a reporter for NPR’s Marketplace covering transportation:

“Say a company rolls out a brand-new build of their software, and they’re testing that in California because it’s near their headquarters. That software could be extra buggy at the beginning, and you could see a bunch of disengagements, but that same company could be running a commercial service somewhere like Arizona, where they don’t have to collect these reports.

That service could be running super smoothly. You don’t really get a picture of a company’s overall performance just by looking at this one really tight little metric. It was a nice idea of California some years ago to start collecting some information, but it’s not really doing what it was originally intended to do nowadays.”

Disengagement reports lack prescriptive language

The disengagement reports are also misleading due to a lack of guidance and uniformity in the language used to describe the disengagements. For example, while AV companies used a variety of language, “perception discrepancies” was the most common term used to describe the reason for a disengagement — however, it’s not clear that the term “perception discrepancies” has a set meaning.

Several operators used the phrase “perception discrepancy” to describe a failure to detect an object correctly. Valeo North America described a similar error as “false detection of object.” Toyota Research Institute almost exclusively described their disengagements vaguely as “Safety Driver proactive disengagement,” the meaning of which is “any kind of disengagement.” Whereas, Pony.ai described each instance of disengagement with particularity.

Many other operators reported disengagements that were “planned testing disengagements” or that were described with such insufficient particularity as to be virtually meaningless.

For example, “planned disengagements” could mean the testing of intentionally created malfunctions, or it could simply mean the software is so nascent and unsophisticated that the company expected the disengagement. Similarly, “perception discrepancy” could mean anything from precautionary disengagements to disengagements due to extremely hazardous software malfunctions. “Perception discrepancy,” “planned disengagement” or any number of other vague descriptions of disengagements make comparisons across AV operators virtually impossible.

So, for example, while it appears that a San Francisco-based AV company’s disengagements were exclusively precautionary, the lack of guidance on how to describe disengagements and the many vague descriptions provided by AV companies have cast a shadow over disengagement descriptions, calling them all into question.

Regulations discourage virtual testing

Today, the software of AV companies is the real product. The hardware and physical components — lidar, sensors, etc. — of AV vehicles have become so uniform, they’re practically off-the-shelf. The real component that is being tested is software. It’s well known that software bugs are best found by running the software as often as possible; road testing simply can’t reach the sheer numbers necessary to find all the bugs. What can reach those numbers is virtual testing.

However, the regulations discourage virtual testing as the lower reported road miles would seem to imply that a company is not road-ready.

Jack Stewart of NPR’s Marketplace expressed a similar point of view:

“There are things that can be relatively bought off the shelf and, more so these days, there are just a few companies that you can go to and pick up the hardware that you need. It’s the software, and it’s how many miles that software has driven both in simulation and on the real roads without any incident.”

So, where can we find the real data we need to compare AV companies? One company runs over 30,000 instances daily through its end-to-end, three-dimensional simulation environment. Another company runs millions of off-road tests a day through its internal simulation tool, running driving models that include scenarios that it can’t test on roads involving pedestrians, lane merging, and parked cars. Waymo drives 20 million miles a day in its Carcraft simulation platform — the equivalent of over 100 years of real-world driving on public roads.

One CEO estimated that a single virtual mile can be just as insightful as 1,000 miles collected on the open road.

Jonathan Karmel, Waymo’s product lead for simulation and automation, similarly explained that Carcraft provides “the most interesting miles and useful information.”

Where we go from here

Clearly there are issues with disengagement reports — both in relying on the data therein and in the negative incentives they create for AV companies. However, there are voluntary steps that the AV industry can take to combat some of these issues:

  1. Prioritize and invest in virtual testing. Developing and operating a robust system of virtual testing may present a high expense to AV companies, but it also presents the opportunity to dramatically shorten the pathway to commercial deployment through the ability to test more complex, higher risk, and higher number scenarios.
  2. Share data from virtual testing. Voluntary disclosure of virtual testing data will reduce reliance on disengagement reports by the public. Commercial readiness will be pointless unless AV companies have provided the public with reliable data on AV readiness for a sustained period.
  3. Seek the greatest value from on-road miles. AV companies should continue using on-road testing in California, but they should use those miles to fill in the gaps from virtual testing. They should seek the greatest value possible out of those slower miles, accept the higher percentage of disengagements they will be required to report, and when reporting on those miles, describe their context in particularity.

With these steps, AV companies can lessen the pain of California’s disengagement reporting data and advance more quickly to an AV-ready future.

Ford names Jim Farley as new CEO, Jim Hackett to retire

By Kirsten Korosec

Ford Motor CEO Jim Hackett is retiring, leaving the company three years after being tapped to transform the automaker into a leaner, more competitive and profitable company while investing in technology and shifting toward electrification, automation and connectivity.

Jim Farley, who many believed was being groomed for the position, has been named president and CEO. Farley joined Ford in 2007 as global head of marketing and sales. He moved through the ranks of the company until 2019 when he was picked to lead Ford’s new businesses, technology and strategy team. He was named COO in February, a decision that along with the sudden retirement of Ford’s president of automotive, Joe Hinrichs, seemed to seal Farley’s path to CEO.

The change to leadership and Hackett’s exit will become effective October 1. Hackett will continue as a special advisor to Ford through March 2021.

“My goal when I took on the CEO role was to prepare Ford to win in the future,” Hackett said. “The hardest thing for a proud, long-lived company to do is change to meet the challenges of the world it’s entering rather than the world it has known. I’m very proud of how far we have come in creating a modern Ford and I am very optimistic about the future.”

Hackett’s turnaround plan was aimed at modernizing the company while making it “fitter,” a term he used back in 2017 several months after being named CEO. That plan included $14 billion in cost reductions over five years, a target that Ford said it could reach by increasing the use of common parts across its portfolio, building fewer prototypes and reducing the number of possible option combinations customers could order.

Ford also planned to shift its focus to its money makers — aka the trucks and SUVs that provided the heftiest gross margins. Three years ago, the company said it would take $7 billion away from cars and put it to work in those profit centers, vehicles like the Ford F-150, Ranger and the all-new Bronco. Ford has since announced plans to stop selling cars in North America — with the exception of the Mustang — in its shift to trucks and SUVs. The automaker has already stopped producing the Ford Taurus, Fiesta and C Max.

It also included a directive to put more money into electric vehicles, make connectivity a priority and modernize Ford’s factories by adding robotics, 3D printing and virtual reality tools to speed up the design, development and production of its vehicles.

Hackett accomplished many of those goals, but fell short in others, particularly around the day-to-day toil of making and shipping vehicles. Despite the launch of the all-electric Mustang Mach-E, a redesigned Ford F-150 and new Bronco series, Ford’s share price languished. The company has been hamstrung by the COVID-19 pandemic, which has disrupted its plans to streamline operations overseas and caused it to shut down factories in North America in the second quarter.

Meanwhile, the company has seen warranty costs balloon due to some quality problems with its vehicles. Not every vehicle launch went smoothly, either. For instance, the rollout of the redesigned Ford Explorer was blundered and set the company back.

Still, Ford Executive Chairman Bill Ford, in a statement Tuesday, credited Hackett for his leadership.

“I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future,” said Ford. “Our new product vision — led by the Mustang Mach-E, new F-150 and Bronco family — is taking shape. We now have compelling plans for electric and autonomous vehicles, as well as full vehicle connectivity. And we are becoming much more nimble, which was apparent when we quickly mobilized to make life-saving equipment at the outset of the pandemic.”

Lordstown Motors becomes latest EV automaker to use a SPAC to go public

By Kirsten Korosec

Lordstown Motors, the one-year-old Ohio electric automaker that revealed a pickup truck prototype in June, has reached a deal to merge with special-purpose acquisition company DiamondPeak Holdings Corp., with a market value of $1.6 billion.

The agreement marks the latest company — and electric automaker — to become a publicly traded company through a merger agreement with a SPAC, or blank-check company. Electric automakers Nikola Motor and Fisker Inc. have also become public companies through a SPAC over the past two months. Shift Technologies, an online used car marketplace and sensor company Velodyne Lidar, also went public via a SPAC, sidestepping the traditional IPO path.

In this latest SPAC, the combined company will remain on the Nasdaq under a new ticker symbol, RIDE. DiamondPeak Holdings Corp. was listed on the exchange under the ticker DPHC.

The company said it was able to raise $500 million in private investment in public equity, or PIPE, including a $75 million investment by General Motors. Other institutional investors that joined include Fidelity Management & Research Company, Wellington Management Company, Federated Hermes Kaufmann Small Cap Fund and funds and accounts managed by BlackRock.

The transaction is expected to close in the fourth quarter of 2020. The new combined company’s board will include Steve Burns, the founder and CEO of Lordstown, and David Hamamoto, chairman and CEO of DiamondPeak.

SPACs have been around for decades and have gone by different names, including “blind pools” and “clean shell companies” and “blank-check companies.” A SPAC is a corporation that has no defined business plan or purpose other than to raise money from public markets to acquire a private company. The SPAC has seen a resurgence in 2020, particularly in the second and now third quarters.

Lordstown has an interesting history for such a young company. Lordstown Motors is an offshoot of Burns’ other company, Workhorse Group, a battery-electric transportation technology company that is also a publicly traded company. Workhorse is a small company that was founded in 1998 and has struggled financially at various points. Its offshoot, Lordstown Motors, revealed a prototype of an electric pickup truck called Endurance that is aimed at contractors and other buyers in the commercial market.

The plan is to produce 20,000 of these electric commercial trucks annually, starting in the second half of 2021, at the former GM Assembly Plant in Lordstown, Ohio. Lordstown Motors acquired in November the 6.2 million-square-foot factory from GM.

The combined company plans to use about $675 million of gross proceeds from the SPAC transaction to  fund production of the Endurance. Since the truck’s unveiling, the company has secured pre-orders valued at $1.4 billion (or about 27,000 total pre-orders), according to Burns.

Is the 2020 SPAC boom an echo of the 2017 ICO craze?

By Alex Wilhelm

I wanted to write an essay about Microsoft and TikTok today, because I was effectively a full-time reporter covering the software giant when it hired Satya Nadella in 2014. But, everyone else has already done that and, frankly, there’s a more pressing financial topic for us to parse.

Let’s take a minute to take stock of SPAC (special purpose acquisition companies), which have risen sharply to fresh prominence in recent months. Also known as blank-check companies, SPACS are firms that are sent public with a bunch of cash and the reputation of their backers. Then, they combine with a private company, effectively allowing yet-private firms to go public with far less hassle than with a traditional IPO.


The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


And less scrutiny, which is why historically SPACs haven’t been the path forward for companies of the highest-quality; a look at the historical data doesn’t paint a great picture of post-IPO performance.

But that historical stigma isn’t stopping a flow of SPACs taking private companies public this year. A host of SPACs have already happened, something we should have remarked on more in Q1 and Q2.

Still, better late than never. This morning, let’s peek at two new pieces of SPAC news: electric truck company Lordstown Motors merging with a SPAC to go public, and fintech company Paya going public via FinTech III, another SPAC.

We’ll see that in hot sectors there’s ample capital hunting for deals of any stripe. How the boom in alt-liquidity will fare long-term isn’t clear, but what is plain today is that where caution is lacking, yield-hunting is more than willing to step in.

Electric vehicles as SPAC nirvana

The boom in the value of Tesla shares has lifted all electric vehicle (EV) boats. The value of historically struggling public EV companies like NIO have come back, and private companies in the space have been hot for SPACs as a way to go public in a hurry and cash in on investor interest.

Ford Bronco reservations surpass 150,000

By Kirsten Korosec

The reception to Bronco 2021 — Ford’s flagship series of 4×4 vehicles that were revealed earlier this month — surpassed expectations of the company’s most optimistic initial projections, CEO Jim Hackett said in an earnings call Thursday. 

More than 150,000 customers have plunked down $100 to reserve a spot to order one of the vehicles, according to Ford. 

“We think this family of vehicles has big upside potential in the growing off-road category and this is a category with a leading OEM has not been seriously challenged until now,” Hackett said.

These are, of course, mere reservations, not actual orders. The deposits are refundable. Now, Ford is focused on the due diligence required to determine how many of these reservations will be converted to orders as it lay outs its manufacturing strategy for the brand.

The Ford Bronco 2 and Bronco 4 will be built at Michigan Assembly Plant in Wayne, Michigan. The Bronco Sport will be assembled at plant in Mexico. The company is now determining how many shifts to staff at each factory in order to match actual orders.

“There’s still a lot of work to do,” Ford COO Jim Farley said in a call with analysts Thursday. “But the mix is great.”

The Bronco is a brand that leans heavily on nostalgia, customization, functional design and technology, such as the automaker’s next-generation infotainment system and a digital trail mapping feature that lets owners plan, record and share their experiences via an app.

While the response to the Bronco has been palatable, there are a number of competitors also aiming to win over customers. GM released a video this week teasing its all-electric GMC Hummer. While the video was a promotional mashup of buzzwords, it also showed that GM had clearly identified Ford Bronco and Tesla Cybertruck as its main competitors. Then there’s electric upstart Rivian, which plans to start production of its EV pickup and SUV in 2021.

Self-driving startup Argo AI hits $7.5 billion valuation

By Kirsten Korosec

Autonomous vehicle technology startup Argo AI is valued at $7.5 billion, just a little more than three years after the company burst on the scene with a $1 billion investment from Ford.

The official valuation was confirmed Thursday, nearly two months after VW Group finalized its $2.6 billion investment in Argo AI . Under that deal, Ford and VW have equal ownership stakes, which will be roughly 40% each over time. The remaining equity sits with Argo’s co-founders as well as employees. Argo’s board is comprised of two VW seats, two Ford seats and three Argo seats.

Ford’s announcement in February 2017 that it was investing in Argo AI surprised many. The startup was barely six months old when it was thrust into the spotlight. Its founders, Bryan Salesky and Peter Rander, were known in the tight-knit and often overlapping autonomous vehicle industry; prior to forming Argo, Salesky was director of hardware development at the Google self-driving project (now Waymo) and Rander was the engineering lead at Uber Advanced Technologies Group. But even those insiders who knew Salesky and Rander wondered what to make of the deal.

Since then, Argo has focused on developing the virtual driver system — all of the sensors, software and compute platform — as well as high-definition maps designed for Ford’s self-driving vehicles.

That mission now extends to VW Group as well. Ford and VW will share the cost of developing Argo AI’s self-driving vehicle technology under the terms of the deal. The Pittsburgh-based company also has offices in Detroit, Palo Alto and Cranbury, New Jersey. It has fleets of autonomous vehicles mapping and testing on public roads in Austin, Miami, Pittsburgh and Washington, D.C.

The investment by VW expands its workforce and operations to Europe. Autonomous Intelligent Driving (AID), the self-driving subsidiary that was launched in 2017 to develop autonomous vehicle technology for the VW Group, is being absorbed into Argo AI. AID’s Munich offices will become Argo’s European headquarters. In all, Argo now employs more than 1,000 people.

While the development and deployment of autonomous vehicles will be a long journey — a remark shared Thursday by Ford CEO Jim Hackett — the Argo investment has already provided the automaker with a short-term and timely gain.

The automaker said Thursday it netted $3.5 billion in the second quarter from selling some of its Argo equity to Volkswagen. That gain gave the automaker a one-time boost in its second-quarter earnings.

Ford posted a $1.1 billion profit in the second quarter, if the Argo transaction is counted. Ford lost $1.9 billion in the quarter before interest and taxes and one-time items. Ford reported a revenue of $19.4 billion, a 50% decrease from the same period in 2019 due to the COVID-19 pandemic, which caused the company to idle its factories for weeks.

Still, the result could have been far worse. Ford had previously warned that it could post as much as a $5 billion net loss in the second quarter.

Despite these COVID-19 headwinds, Hackett said Ford is still committed to the long-term pursuit of AVs, a point reiterated by CFO Tim Stone, who said the automaker continues to make investments to commercialize its autonomous vehicle business, including product development, engineering and testing.

“The AV journey will be a long one, but Ford is now well-positioned to run this race and compete like few others can,” Hackett added.

Lyft expands its rental business with Sixt partnership

By Kirsten Korosec

Lyft continues to expand beyond its core ride-hailing business into bikes, scooters, transit and now rental cars. The company said Thursday that it’s taking Lyft Rentals, a pilot program that launched in December, and expanding it through a partnership with Sixt.

Lyft Rentals initially gave folks in Los Angeles and San Francisco the ability to rent vehicles through its app, which might be traditionally used to hail a ride or grab a shared scooter. The pilot was successful enough to warrant an expansion, but with one notable change. Lyft owns and operates the rental fleet in Los Angeles and San Francisco. The new partnership will shift that responsibility to Sixt, a global rental car company with more than 70 locations in the United States. Lyft said it will continue to own and operate the rental fleet in Los Angeles and San Francisco.

The car rental option via the Sixt partnership will initially expand to Las Vegas, Miami and Seattle. Lyft said it plans to expand to all cities within the Sixt rental network in the U.S. in the coming months.

Customers can open the Lyft app to find a selection of cars that can be rented directly from the “Rentals” tab. From here, users can select their vehicle class, reservation dates, location and an option to add insurance coverage. Customers also have the option to select the exact make and model of their vehicle. Lyft said it will provide a $10 credit to be used to hail a ride after dropping the car back at the Sixt lot.

Lyft-Rentals-gif

Image Credits: Lyft

Lyft Rentals shouldn’t be confused with the company’s Express Drive program, which gives people who want to drive on the Lyft ride-hailing app a way to gain access to a vehicle. Express Drive, which is in partnership with Hertz, is aimed at drivers. Lyft Rentals is a consumer product.

Lyft is betting that the partnership with Sixt will allow it to scale quickly without taking on the high capital costs of buying, owning and maintaining the actual vehicles, not to mention the burden of managing the various permits required to operate a rental car company in cities and at airports.

Lyft will receive a commission from each rental made through the app, according to the company.

America’s cheapest electric vehicles are coming courtesy of Chinese automaker Kandi

By Kirsten Korosec

Chinese electric vehicle and parts manufacturer Kandi Technologies Group is officially bringing two EVs to the United States through its subsidiary Kandi Americanews that has prompted run up in its share price in the past day. 

Kandi shares opened at $3.88 a share on Wednesday, jumping to $16.51 today. Shares have now settled below $9.

Kandi Technologies has been talking about bringing EVs to the United States for a couple of years. Now, two models are arriving as early as the end of 2020, beginning in a limited area in Texas. Both are priced under $30,000 before federal incentives.

kandi auto electric car K23

Image Credits: Kandi America

The two models heading to the U.S. are Kandi’s compact K27 vehicle that comes with a 17.69 kWh battery and a range of up to 100 miles, according to the automaker (although it’s unclear if these are EPA estimates or another standard). The K27 starts at $20,499, and is eligible for the $7,500 federal income tax credit. That would put the K27 at just under $13,000, although, again, it’s unclear if this includes the destination fee.

The larger K23 is also coming to the U.S. market. This small electric SUV has a 41.4 kWh battery and a driving range of more than 180 miles. The K23 starts at just less than $30,000, again, before applying federal incentives.

Both of those vehicles, even without the federal incentives, are less expensive than other EVs sold in the U.S., including the Tesla Model 3, Nissan Leaf, Hyundai Ioniq and Kia Kona EV — to name a few.

The target is middle class U.S. consumers. It’s a group that has had few affordable EV choices, Kandi Technologies Chairman Xiaoming Hu said in a statement. Kandi America CEO Johnny Ta echoed those sentiments.

“Electric vehicles have been valued for years for their efficiency, sustainability and innovation. However, owning the ‘it’ car often eluded consumers who desired a great EV alongside all the other comforts of modern living. Kandi is changing that by revolutionizing the EV-buying experience for many,” Tai said. “Kandi’s mission is to make electric cars accessible to all.”

The two models clearly hit the affordability standard. The question is whether they will tick the other important boxes for customers here, a list that includes reliability and performance.

The vehicles will be sold by Garland, Texas-based Kandi America, the trade name of Kandi’s wholly owned subsidiary SC Autosports, LLC. Sales will initially focus on the Dallas-Fort Worth area, the company said.

China’s electric SUV maker Li Auto raises $1.1 billion in US IPO

By Rita Liao

Trade tensions between China and the U.S. have not stopped Chinese companies from eyeing to list on American stock exchanges. Li Auto, a five-year-old Chinese electric vehicle startup, raised $1.1 billion through its debut on Nasdaq on Thursday.

The Beijing-based company is targeting a growing Chinese middle class who aspire to drive cleaner, smarter, and larger vehicles. Its first model, sold at a subsidized price of 328,000 yuan or $46,800, is a six-seat electric SUV that began shipping end of last year.

Li Auto priced its IPO north of its targeted range at $11.5 per share, giving it a fully diluted market value of $10 billion. It also raised an additional $380 million in a concurrent private placement of shares to existing investors.

The IPO arrived amid a surge of investor interest in EV makers. Tesla’s shares have skyrocketed in the last few quarters. Li Auto’s domestic rival Nio, which raised a similar amount in a $1 billion float in New York back in 2018, also saw its stock price rally in recent months.

Li Auto is one step ahead of its Chinese peer Xpeng in planning its first-time sale. The six-year-old competitor said last year it may consider an IPO. Last month, a source told South China Morning Post that Xpeng was getting ready for the listing.

Founders of China’s emergent EV startups are often shrewd internet veterans who are well-connected in the venture capital and marketing world, attracting investment dollars in the billions. Li Auto, for instance, counts China’s food delivery mogul Wang Xing, boss of Meituan Dianping, as its second-largest shareholder after its CEO Li Xiang. TikTok parent ByteDance shelled out $30 million in its Series C round.

Investors are in part emboldened by Beijing’s national push to electrify China’s auto industry. The question, then, is whether these startups have the right talent and resources to pull things off in an industry that traditionally demands a much longer development cycle.

Wallace Guo, a managing partner at Li Auto’s Series B investor Taihecap, admitted that “the nature of auto consumption, unlike internet products evolving through trial and error, manufacturing a car, is a strategic move with sophisticated system, very long value chain, requiring huge investment and resources and any error can be fatal.”

Mingming Huang, chief executive of Future Capital, said that “it was a no brainer in 2015 to be the first investor” in Li Auto. The venture capitalist said Li, who ran a popular car-buying online portal before getting into manufacturing, “has the rare combination of being a relentless talent as well as a top-notch product manager that excels in creating value for all stakeholders.”

Customers testing Li Auto’s SUV in China. Photo: Li Auto

Both investors believed Li Auto has picked the right path of zeroing in on extended-range electric vehicles. EREVs come with an auxiliary power unit, often a small combustion engine, that ensures cars can still operate even when a charging station is not immediately available, a shortage yet to be solved in China.

As my colleague Alex pointed out, Li Auto is on a trajectory similar to that of its peer Nio, going public after a short history of delivering to customers. The startup only began shipping its first model last December and delivered just over 10,000 units as of June, its prospectus showed.

The startup is still deep in the red, losing 2.44 billion yuan ($350 million) in 2019, up from a net loss of 1.53 billion yuan in 2018. It did finish the first quarter of 2020 with a gross profit of $9.6 million after it began monetization.

Its annual revenue — which comprised mostly of car sales and a small portion from services like charging stalls — stood at 284 million yuan ($40.4 million) in 2019, a tiny fraction of Nio’s $1.12 billion. But Nio also amassed a greater net loss of $1.62 billion in the same year. In contrast, Tesla has been profitable for four straight quarters.

Li Auto’s investors are clearly bullish that the Chinese startup can one day match Tesla’s commercial success.

“Xiang has a deep understanding of the preferences and pain points of car owners and drivers in China. Li Auto is the first in China, to successfully commercialize extended-range electric vehicles, solving the challenges of inadequate charging infrastructure and battery technologies constraints,” Huang asserted.

“The company is able to get positive gross margin when selling the first batch of vehicles and thus with its growth in sales volume, its gross margin was well above competitors and can live long enough to become a ten billion-dollar company with this healthy business model,” said Guo.

Panasonic boosts energy density, trims cobalt in new 2170 battery cell for Tesla

By Kirsten Korosec

Panasonic has developed new battery technology for the ‘2170’ lithium-ion cells it produces and supplies to Tesla, a change that improves energy density by 5% and reduces costly cobalt content.

The new, higher-energy dense 2170 cells will be produced by Panasonic at Tesla’s factory in Sparks, Nevada, the company said Thursday. Panasonic is upgrading its battery cell lines with production slated to begin in September. The company operates 13 lines at the factory with a capacity to produce 35 gigawatt hours of batteries each year. All 13 lines will eventually run the new technology, Panasonic Energy North America President Allan Swan said without providing a timeline of when the entire system would be upgraded.

“We’re about to take another leap forward,” Swan said in a recent interview. “It’s kind of exciting from the Panasonic perspective; we’re driving towards cobalt free and we’re driving towards higher energy dense batteries, which gives our customers a choice of how they want utilize that.”

The facility where these new battery cells will be produced is known as Gigafactory 1, a critical component of Tesla’s plan to expand global battery capacity and reduce the cost of electric vehicles. Panasonic has been its most important partner in that project, which based on a recent agreement should last until at least 2023. Panasonic makes the 2170 cells at Gigafactory 1, which Tesla then uses to make battery packs for the Model 3. The 2170 cells are also used in Tesla’s newest vehicle, the Model Y.

Here’s a quick primer. A battery contains two electrodes. There’s an anode (negative) on one side and a cathode (positive) on the other. An electrolyte sits in the middle and acts as the courier that moves ions between the electrodes when charging and discharging.

A cell with greater energy density means that engineers figured out a way to pack more energy in that space. The 5% improvement in energy density in the cells should result in the same gains in Tesla’s battery packs. The upshot: Tesla’s Model 3 and Model Y could see improvements in range. The reduction in cobalt content, a rare chemical element that is expensive and has social and environmental costs, could also help reduce the price of the cells.

Panasonic’s factories in Japan produce the cylindrical lithium-ion “18650” cells, which are used to power Tesla’s Model S and Model X vehicles. Panasonic has already improved 18650 cells, resulting in a reduction in cobalt and improvement in energy density.

Panasonic uses a NCA, or nickel-cobalt-aluminium, cathode chemistry in its battery cells. Panasonic wouldn’t disclose the amount of cobalt used today or get into the details of its technology. However, Celina Mikolajczak, vice president of battery technology at Panasonic Energy of North America, did say that the total amount of cobalt used in Panasonic cylindrical automotive batteries is less than 2% of global demand.

Mikolajczak said that NCA uses less cobalt than NCM, or nickel manganese cobalt oxide. The NCA cathode chemistry has been further developed to reduce cobalt, she added

The company is aiming for zero cobalt in its battery cells, Mikolajczak said. Panasonic has already managed that feat in its R&D lab. The plan is to commercialize cobalt-free batteries in a few years.

GM starts construction on the cornerstone of its EV strategy

By Kirsten Korosec

Steel construction has begun on the nearly 3-million-square-foot factory that will mass produce Ultium battery  packs, the cornerstone of General Motors’ strategy to bring 20 electric vehicles to market by 2023.

The Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio is part of a joint venture between GM and LG Chem that was announced in December. At the time, the two companies committed to invest up $2.3 billion into the new joint venture as well as establish a battery cell assembly plant on a greenfield manufacturing site in the Lordstown area of Northeast Ohio that will create more than 1,100 new jobs. The factory will be able produce 30 gigawatts hours of capacity annually. To put that into perspective, Tesla’s factory in Sparks, Nevada, which is part of a partnership with Panasonic, has a 35 GW hour capacity.

GM Ultium Cells factory

Construction at the all-new Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio.

The batteries will be used in a broad range of products across its Cadillac, Buick, Chevrolet and GMC brands as well as the Cruise Origin autonomous shuttle that was revealed in January. The Cadillac Lyriq EV flagship and an all-electric GMC Hummer, which will be revealed this fall and go into production in the fourth quarter of 2021, will use the Ultium battery system. GM plans to reveal the Lyriq at a virtual event August 6.

GM broke ground at the factory site in May and has since poured the concrete footings for the facility. Steel construction will continue into fall 2020, according to GM.

GM Ultium Battery Cell Manufacturing Factory

Image Credits: GM

GM has used LG Chem as a lithium-ion and electronics supplier for at least a decade. The companies began working together in 2009. The relationship deepened as GM developed and then launched the Chevy Bolt EV.

This latest joint venture marks a step change for GM and a means to accelerating its EV plans, which could even involve spinning out the operations into a separate company.

“We are open to looking at and evaluate anything that we think is going to drive long-term shareholder value, so I would say nothing is off the table,” GM Chairman and CEO Mary Barra said during an earnings call Wednesday.

GM reported Wednesday a $758 million loss in the second quarter on $16.78 billion in revenue. The loss and the 53% year-over-year drop in revenue was caused mostly by COVID-19-related factory shutdowns in the U.S. However, the results still managed to beat analysts expectations.

Elon Musk says Tesla is open to licensing Autopilot, supplying powertrains and batteries to other automakers

By Darrell Etherington

Tesla CEO Elon Musk noted on Twitter on Tuesday night that the automaker would be “open to licensing software and supplying powertrains & batteries” to other automakers. Musk added that that would even include Autopilot, the advanced driver assistance software that Tesla offers to provide intelligent cruise control in a number of different driving scenarios.

Musk was addressing a Teslarati article about how German automakers are looking to close the technology gap between themselves and Tesla when it comes to producing EVs. Volkswagen Chairman Herbert Diess has in past comments expressed admiration for Musk and Tesla’s accomplishments on multiple occasions.

VW has created its own EV platform, which it intends to use as the base for a number of different electric cars, ranging from sport sedans to SUVs. The company is also openly pursuing licensing its MEB platform to other automakers, and struck such a deal with Ford last July for the American automaker’s European business.

Musk says that Tesla’s interest in licensing stems from its underlying goal, which is “to accelerate sustainable energy, not crush competitors,” according to his tweet. This isn’t the first time the automaker has indicated a willingness to be more open in pursuit of that goal: In 2014, Musk penned a blog post announcing that Tesla would be making its intellectual property freely available to “anyone who, in good faith, wants to use [its] technology.”

Of course, that hasn’t stopped Tesla from taking aim at potential competitors via legal action on occasion — it filed suit against electric automaker Rivian and four of its former employees last week, alleging theft of trade secrets and poaching key talent.

A platform licensing or supplier relationship would be an entirely different arrangement, of course, and one with plenty of precedent in the automaker industry. Nor would it necessarily negatively impact Tesla’s own auto sales, as the company offers a number of other selling points above and beyond its underlying powertrain and battery tech.

At the time of Volkswagen’s announcement, the German automaker said it expects it could make up to $20 billion in revenue through the MEB deal with Ford, with a significant chunk of that coming from MEB parts and components supply. Tesla could realize similar gains but perhaps amplified globally, especially if it can ramp powertrain and battery production beyond the capacity needs of its own vehicle demand capacity.

China now accounts for nearly one-quarter of Tesla revenue

By Rita Liao

Tesla has been counting on China to maintain its sales momentum, and it seems to be on track with the plan.

In the three months ended June 30, the automaker’s revenue in China climbed 102.9% year-over-year to $1.4 billion, according to its latest SEC filing. That means China now makes up 23.3% of Tesla’s total revenues of $6 billion in the quarter, compared to just about 11% in the same period a year before.

To increase affordability for Chinese consumers, Tesla inked a 50-year lease from the Shanghai government to build a Gigafactory there, which keeps production costs down and allows it to reap local tax benefits and avoid tariffs. Under the terms of the agreement, the electric vehicle giant needs to pay 2.23 billion yuan ($320 million) in tax to China every year starting at the end of 2023. It must also sink 14.08 billion yuan in capital expenditure into the facility.

Tesla began shipping China-made Model 3 at the end of last year and is on course to add its Model Y, a mid-size electric SUV, to its production in the world’s biggest auto market, the filing shows. Earlier this month, it also started taking reservations in China for its futuristic Cybertruck, which won’t go into production until late 2022.

While shipment in China jumped in the second quarter, Tesla delivered 4.8% fewer vehicles overall in the period due to challenges prompted by COVID-19, including suspended production. The period marked the fourth straight quarter of profitability for the automaker.

Lucid Motors’ all-electric Air will have 32 sensors, including lidar to support hands-free highway driving

By Kirsten Korosec

Lucid Motors is loading up its first electric vehicle with hardware — dozens of sensors, a driver monitoring system and an Ethernet-based architecture — for an advanced driver assistance system that aims to match and even surpass its rivals.

There will be 32 sensors in all, according to Lucid, which has branded its advanced driver assistance system DreamDrive. The total number isn’t what matters. The type and location — and of course, the software — does. For now, Lucid is just providing details on the hardware. 

The Air, which is set to debut September 9, will come with one lidar, radars, cameras and ultrasonic sensors. Lidar — the light detection and ranging radar that measures distance using laser light to generate a highly accurate 3D map of the world around the car — is a noteworthy inclusion. The sensor is typically used on autonomous vehicles, not the production cars, trucks and SUVs that consumers will buy and drive. Lucid said its long-range lidar sensor will be placed in the front of the vehicle.

There is a small and growing list of automakers that have plans to include lidar in their production vehicles as well. Volvo revealed in May plans to start producing vehicles in 2022 that are equipped with lidar and a perception stack — technology developed by Silicon Valley startup Luminar that the automaker will use to deploy an automated driving system for highways. 

The number of radar sensors and their location is also a standout feature. Lucid will have five radars in all, one located in front to augment the capabilities of the lidar. The other four will be located on the four corners of the vehicle. This gives the Air 360 degrees of radar coverage. Tesla, which has an advanced driver assistance system that is widely considered to be the most or among the most capable on the market today, has eight cameras, 12 ultrasonic sensors and just one radar. Tesla vehicles do not have lidar. 

Lucid Motors ADAS sensor

Image credits: Lucid

Inside the vehicle, will be a driver monitoring system with a dedicated camera. Lucid Motors didn’t reveal much about its DMS. However, it’s likely to operate similarly to GM’s hands-free system known as Super Cruise. Eugene Lee, the senior director of ADAS and autonomous driving at Lucid Motors, formerly worked on GM’s Super Cruise. 

Underlying all of this will be a high-speed Ethernet Ring, which Lucid describes as a unique cornerstone of advanced electric architecture. Automakers have been moving towards Ethernet technology for several years now in an effort to create a centralized network that simplifies the deployment of advanced features. Lucid said its ring, and not linear, design is what allows for a redundant platform for functions such as steering, brakes, sensors and even power sources. The system also allows for over-the-air software upgrades, an important feature (popularized by Tesla) that gives Lucid the ability to improve the ADAS over time. 

All this hardware will come standard on the first iteration of the Lucid Air, a pricier and more exclusive launch version called the Dream Edition. Lucid is sourcing its hardware system from several large suppliers, including Bosch, Continental and Here. The automaker said it integrates the hardware in house. 

The aim is for all of this hardware to support high functioning driver assistance features, eventually including hands-free automated highway driving. This ADAS package will not only offer Level 2 features, but is also Level 3 ready, according to Lee. There are five levels of automation under SAE’s definition. Level 2, is in which two primary functions are automated, and still have a human driver in the loop at all times. Level 3 takes that up a notch and is considered conditional automation in geofenced areas such as highways. Driver must still be prepared to intervene with Level 3.

Lucid said its DreamDrive tech will support 19 safety, driving and parking assist features that will be available as soon as the Air rolls off the assembly line. The automaker plans to add eight more features at a later date.

Lucid said the system will include safety features such as surround view monitoring, blind spot display, cross traffic protection that informs the driver of vehicles perpendicular to them, traffic sign recognition, automatic emergency braking and alerts for distracted or drowsy drivers. 

The driving assistant features will include adaptive cruise and lane centering for highway driving, headlight assist and an alert that tells the driver when standstill traffic has started to move again. It will also offer what Lucid describes as autonomous parking.

❌