EVs

Byton throws in the towel.

Following up with my Byton post from last week where I fat-fingered the title, it should’ve said 2020 and not 2021, seems that Byton won’t last past June. They’ve officially announced that they’re taking a 6-month ‘break’ furloughing most of their China employees and filing for bankruptcy protection in the US and Germany. Had a quick chat with Christian Shepherd’s FT who captured a lot of what I think about the situation in the linked article.

The important stuff:

-          Founded in 2017

-          Capital raised $1.2B

-          # of employees at peak >1.4K

-          # of vehicles produced = 0

I absolutely LOVED Byton’s ambition.

But I am not sure what customer and market research they leaned on that said there was a market for a 48” vehicle wide LCD display. The M-Byte is complicated. Complications increase costs. Complications force delays. Delays increase costs. See the trend here?

Maybe they could’ve launched the M-Byte as a concept and built an M-Byte derivative as their initial production vehicle – that would’ve been the route I may have taken. One that cherry-picked all the elements from the concept that pushed the innovation and design envelope, but that still made practical, timing, and budgetary sense.

You guys have heard me say this before. Building a car is HARD. Just ask Apple and Google. Or ask Faraday Future, Enovate, Bordrin, and now Byton.

#Byton #temporarilyclosedforbusiness #needcapital #Job1TBD #needabailout #canIhaveyourmanufacturunglicense

OEMs

BMW’s own Captain Obvious.

For those of us who follow the ICE -> EV transition pretty closely both here and abroad, forgive me if I come off a bit sarcastic but it seems that Manfred Schoch, one of BMW’s board members, had his EUREKA moment (of clarity) about how BMW can succeed in the future, albeit 5-6 years late.   

Schoch is quoted in Reuters as saying “Only with our own e-architecture can we fully exploit the advantages of an electric vehicle.” Up till now, what have they been doing …besides creating way too many products and variants of products that all add up to a muddled mess of a product portfolio?

Bimmer was moving in the right direction with the i3 & i8 but it seems it made too much sense but lost too much money for them to keep pursuing, refining, improving, and innovating so they scrapped them BTOH. Now they essentially need to start all over. I wonder if they’re developing <10% of the code that goes into their current vehicles??

For the companies that aren’t taking software development much, much more seriously – this potentially HUGE strategic mistake you will not see the effects of today, but in 5-7 years when EVs, touchscreens, and digital services have all moved into the mainstream and you’re sharing 30-60% of that revenue because you decided that investing in an internal dev team 5 years ago wasn’t in the best interests of the company.

#BMW #CaptainObvious #goingitalone #welcometotheparty #whereismydevteam

This article has captured my thinking about the challenges ahead for the OEMs for the last several years.

Here’s an excerpt of the linked article which is recommended reading:

‘Run a job assessment with all top managers at VW, Audi, Porsche, BMW, and Daimler tomorrow and ask them to code a small game or a simple but working virus. If they are not able to do so, fire them immediately, because they are not fit for the job. How many will be left?’

This is a quote from Peter Mertens, the former Head of R&D for Audi, which is arguably the most technologically advanced brand within the VW portfolio. ALL OEMs have been and still are dealing with these challenges but until now most have NOT been willing to openly speak about it.

#Audi #ThereWillBeBlood #WeAllDidSleep #wearenotready #Teslaiseatingourlunch

URBAN MOBILITY

In mobility as in anything else, hindsight is 20/20.

The author’s explanations for why micro-mobility companies like Lime, Bird, Jump, etc. have all struggled and during Covid-19, have offered the least when their products and services were needed the most leave me with a few things I need to get off my chest.

The author’s collective list of ‘do-overs’ ALL make sense IF each company’s goals were to provide an affordable, safe, and convenient transportation alternative outside of the normal public and private solutions but within the framework of each individual city’s existing transportation system. These founders weren’t actually trying to solve for that though.

The VCs that funded them incented them to build their install bases so that on a chart the growth would look like a ‘hockey stick’ in the shortest period of time. Their valuation would track with that install base growth whether they made money or not. I think most of the companies were very successful at both, growing their install base and valuations. But therein lies the rub.

I bet most of the VCs that funded them didn’t tell these startups initially to make nice with the cities they were targeting to ensure a smooth market entry and service launch or to make sure that all applicable laws and norms were met. I would also bet that when Covid-19 landed on US shores, there weren’t many VCs advising these guys to do the ‘right’ thing like offer discounts or even FREE rides to those folks most vulnerable to Covid-19.

Prior to the WeWork debacle, Lime and Bird would’ve likely created value for their VCs, founders, and the select few early employees via an acquisition or an IPO. Unfortunately for them, WeWork did happen, and on top of that Covid-19 happened. There are no takebacks in business so now these companies are stuck with a broken business model, no money to try to grow themselves out of it, and competitors that want to see nothing more for them to go out of business. I get the disruption thing. I also get that many of these tech bros. type companies aren’t really solving a major problem for the broader public. When they have problems it infringes on everyone. If the companies made money while doing it, then there would be a profit motive and valid argument. I’ve looked at these models and financials, there isn’t a way for them to make money the way they currently run their businesses. Full stop.

"A rising tide floats all boats….. only when the tide goes out do you discover who’s been swimming naked." These companies have ALL been exposed. Further, the whole venture capital method of funding startups is a broken process that also needs revisiting so that increasing valuations at all costs shouldn’t always be the #1 priority. I know it’s needed but we can do better.

#Lime #Bird #takeback #MondayMorningQB #increasedvaluationshouldbeabyproductnotagoal

AVs

Aurora leading a sector-wide pivot to autonomous long-haul trucking?

With robotaxis being complex, expensive and ultimately dangerous – until millions of miles have been logged across about every conceivable use case – some of the original startups that focused on developing autonomous passenger vehicles or robotaxis have decided to pivot and are looking to deploy their R&D and knowhow into other transportation-related challenges that they see a shorter timeframe for making them cashflow positive.

The latest company to enter the fray is Pittsburgh based Aurora Innovation. All of sudden, if we list all of the major players, the market seems pretty crowded: Aurora, Tesla, TuSimple, Waymo, Embark, Kodiak Robotics, and the previously the now-defunct Starsky Robotics. There are some pretty heavy hitters among that group.

Companies like Aurora, Tesla, and Waymo are running double duty, and why not, they are already investing the capital in order to gather the data and refine their machine learning algo. As we are finding out, there are plenty of other scenarios that these companies can ‘dumb down’ their HW / SW stacks to tackle less ominous but potentially equally lucrative challenges like long-haul over the road (OTR) trucking. Not all of them will succeed but ALL of them will burn through capital like you wouldn’t believe. Will being focused on one main use case or many use cases be the ‘right’ way to go? We will begin tracking more closely this particular sector to see who (likely plural) who makes it out on top.

#Aurora #longhaultrucking #OTR #TuSimple #Waymo #Tesla #Embark #KodiakRobotics