Intel Report | Dec 23 | The Weekly Automotive & Mobility News That Matters

What are Graduation Rates and why do they matter? | LINK

🚗 Automotive

Tesla accounts for nearly half of the market capitalization among global carmakers: its valuation surpasses the combined value of the next 29 automakers. | Visual Capitalist

From the beginning, Elon Musk knew he was Tesla’s greatest commercial. This is why the company never ran ads. He quickly amassed nearly 200 million Twitter followers, then bought the platform. People wonder how Tesla commands a valuation premium 10x greater than its peers while spending only four ad dollars per vehicle sold. The answer is Elon Musk. | Scott Galloway

U.S. new vehicle sales are expected to rise next year to their highest level since 2019, led by lower interest rates and improving affordability, according to industry analysts. S&P Global, Edmunds and Cox Automotive Inc. expect new auto sales to increase year over year by 2.5% or less to achieve the industry’s best results since 2019. The increase is expected to be driven by a continuing “normalization” of vehicle inventories, incentives/discounts from automakers, and easing financing and loan rates. Electric vehicle sales in the U.S. are forecast to set another record in 2024, with total sales volume near 1.3 million, according to Cox. That would mark roughly 8% market share. | CNBC

Americans are scrambling to stock up on cars, appliances and other big-ticket imports in anticipation of new Trump administration tariffs — a spending spree that could reignite the very inflation buyers are hoping to avoid. | The Washington Post ($)

Honda and Nissan Motor Corporation plan to merge under a holding company with the top executives chosen by Honda in a historical reshuffling of Japan’s auto industry meant to keep the country’s second- and third-largest players competitive amid a global onslaught of new competitors and technologies. Mitsubishi Motors, partly owned by Nissan, will decide by the end of January whether to join the new partnership. The CEOs of all three companies announced the new framework at an afternoon news conference December 23 in Tokyo, with Honda CEO Toshihiro Mibe in the center, flanked by his counterparts. The companies said they will now negotiate details.. | Automotive News ($)

Dealers say Nissan historically has been slow to refresh its lineup, and they have had to give steep discounts to unload dated-looking vehicles. That reputation has eroded the appeal of Nissan, and today buyers of the company’s vehicles tend to be people with poorer credit histories or those looking for a deal, dealers say. As a result, Nissan’s customer base has been harder hit by rising interest rates that have pushed up monthly payments. | The Wall Street Journal ($)

Some unions are born of necessity, others from convenience. In the case of Honda and Nissan’s potential merger, it is mostly defensive as Chinese rivals take the world by storm. While the challenge from China’s seemingly boundless EV expertise looms large for all traditional automakers, for Japan it represents a threat to the vast car-manufacturing supply chain that has been the country’s economic engine for years. | Automotive News ($)

The US Environmental Protection Agency (EPA) announced that it will allow California to ban most sales of new gas- and diesel-powered cars and light trucks starting in 2035. California has long been able to set its own emissions standards under the Clean Air Act provided they are more stringent than federal regulations. Under that authority, the state announced in 2022 a plan to phase out fossil fuel cars in stages, culminating with the ban in 2035.  California’s phase-out would begin in 2026, when the state will require 35% of automakers’ sales to be zero-emissions vehicles (ZEV), either electric or hydrogen. In the third quarter of this year, ZEV market share was 26.4%.  Then, 68% of new cars would have to be zero-emissions by 2030, and 100% by 2035. Plug-in hybrids could make up to 20% of sales, provided they have a range of 50 miles or more. However, the Biden administration’s decision is certain to be reversed by the incoming Trump administration. | TechCrunch

The U.S. Supreme Court will hear a clash involving California’s stringent vehicle pollution limits, agreeing to decide whether fuel producers have a legal right to sue over the regulations. The justices said Friday they will hear a key preliminary question in a lawsuit over the US Environmental Protection Agency (EPA)’s power to let California tackle climate change through limits on auto emissions. At issue is whether the entities pressing the suit — including an oil industry trade group and Valero Energy Inc. units that produce biofuels — are sufficiently affected by the regulations to go to court. A federal appeals court tossed out the suit. Supreme Court intervention creates a new complication for California’s auto rules, which were already in danger because of Donald Trump’s presidential election victory. The companies and trade groups ultimately are seeking a ruling that would outlast Trump’s four-year term and bar California from trying to stifle greenhouse gases without clearer authorization from Congress. | Bloomberg ($)

A day after it adopted regulations banning the sale of most new gasoline-powered vehicles as of 2035, Quebec said it will temporarily suspend its electric vehicle purchase incentive program in early 2025. The rules against vehicles powered by an internal combustion engine (ICE), adopted Dec. 16, applies to all “light-duty” vehicles, which the province describes as cars, light trucks, pickup trucks, and most SUVs. Starting Jan. 1, 2034, it will be illegal to sell a new or used version of any 2035 model of vehicle subject to the rule, including hybrid and plug-in hybrid models. And starting Dec. 31, 2035, it will be illegal to sell or lease new gas-powered vehicles, covered by the regulation, from the 2034 model year or earlier. However, models of cars from 2034 or earlier that are already registered in Quebec by the deadline can remain on the roads and can be resold. | Automotive News ($)

Europe’s automakers face tough new CO2 emission targets for 2025 that mean that at least one in five cars they need to sell must be an EV, well above the 13% share for electric cars this year. They are gearing up for those targets by hiking prices on combustion engine models with big discounts expected for EVs to nudge consumers away from fossil-fuel models. | Reuters ($)

CCC Group's 2024 Crash Course report recaps the year's top trends that defined the vehicle claims and repair industry. | CCC

Researchers have examined how car dependence relates to people’s satisfaction with life. They find a threshold effect of car dependence on life satisfaction: beyond a certain point, increases in car dependence yield a decrease in people’s satisfaction with life. For instance, in a typical week, relying on a car for more than 50% of the time for out-of-home activities is associated with a decrease in life satisfaction. | Science Direct

Stained glass taillights on old vans and trucks are real automotive art. | The Drive  

⚡️ Electric Vehicles (EVs)

Incoming U.S. President Donald Trump’s transition team is recommending sweeping changes to cut off support for electric vehicles and charging stations and to strengthen measures blocking cars, components and battery materials from China, according to a document seen by Reuters. The transition team also recommends imposing tariffs on all battery materials globally, a bid to boost U.S. production, and then negotiating individual exemptions with allies, the document shows. | Automotive News ($)

In 2017, Norway set a goal of eliminating sales of fossil-fuel-powered cars by 2025. At the time it seemed like little more than a feel-good fantasy to soften the image of a government led by Erna Solberg, a conservative advocate of oil production who’d earned the sobriquet “Iron Erna.” But as the deadline approaches, it turns out that the Nordic country will come within a whisker of meeting that milestone. | Bloomberg ($)

With about 100,000 electric vehicles (EVs) on the road, Norway (population 5 million) trails only the U.S., China, and Japan in absolute numbers. By 2025, the government has suggested, there may be no gasoline- or diesel-powered cars sold in the country. However, if the rest of the world copied the country overnight, the Norwegians would be out of business. Norway is Western Europe’s largest oil and gas exporter, and the revenue lost from tax breaks on Teslas is dwarfed by the $15 billion-plus the government receives annually from the country’s energy sales. Even as Norway tries to reduce emissions on the road, state-controlled Statoil ASA is expanding oil exploration, pushing farther into the Arctic Sea. | Bloomberg ($)

Tesla has begun operations at its new lithium refinery near Corpus Christi, a plant CEO Elon Musk said eventually would produce enough of the material for batteries in 1 million electric vehicles per year — and could expand beyond that. | Houston Chronicle ($) 

🇨🇳  China

Trump's relentless China-bashing and tariffs during his first term as president lit a fire under Beijing to double down on its efforts to gain global supremacy in electric cars, robots and rare materials, and to become as independent of America’s markets and tools as possible. China’s export machine is so strong now that only very high tariffs might really slow it down, and China’s response to very high tariffs could be to start cutting off American industries from crucial supplies that are now available almost nowhere else. That kind of supply-chain warfare is not what anyone, anywhere needs. But if we don’t use this time to respond to China the way we did to the Soviet Union’s 1957 launch of Sputnik, the world’s first artificial satellite, with our own comprehensive scientific, innovative and industrial push, we will be toast. | The New York Times ($)

BYD’s cheapest EV model, the Seagull, outsold every car in China last month, even gas-powered models. Starting at around $10,000, over 56,000 BYD Seagull EV models were sold in November alone. With sales surging, the low-cost EV took back the best-selling car title from the Tesla Model Y in China last month. | Electrek

BYD officially announced its entry into the humanoid robotics field, launching a global recruitment drive for its Embodied Intelligence Research Team. The campaign targets master’s and doctoral graduates from the class of 2025 at top universities worldwide. BYD offers roles such as Senior Algorithm Engineers, Senior Structural Engineers, and Senior Simulation Engineers, focusing on cutting-edge research in humanoid and bipedal robotics. BYD’s Embodied Intelligence Research Team leverages the company’s extensive industrial application scenarios to customize robotic systems and enhance their capabilities. The team has already developed various advanced robotic products, including industrial, collaborative, mobile, and humanoid robots. With a focus on improving robotic perception and decision-making, BYD aims to accelerate the adoption of embodied intelligence in industrial applications. | Car News China  

🤖  Autonomy & Robotics

A new study conducted with the help of reinsurance provider Swiss Re used hundreds of thousands of liability claims to demonstrate that robotaxi vehicles using the Waymo Driver platform deliver significantly higher safety performance than vehicles operated by a human driver. Swiss Re concluded that robotaxi vehicles with Waymo Driver demonstrated better safety performance compared to human-driven vehicles, achieving an 88% reduction in property damage claims and a 92% reduction in bodily injury claims. To put things in a real-world perspective, during the 25.3 million miles Waymo Driver has traversed, its robotaxis were only involved in nine property damage claims and two bodily injury claims (both bodily injury claims are still open). For the same distance, human drivers would be expected to have 78 property damage and 26 bodily injury claims. | Electrek  

🤖  Marine

Drones have revolutionized modern warfare in the sky. Now defense companies and navies are betting they can do the same underwater. The new underwater drones, with names such as Ghost Shark, Herne and Manta Ray, can typically dive thousands of feet below the surface and operate largely without human interaction for days on end. That ability makes them ideally suited to gather intelligence, protect undersea infrastructure and counter potential threats in the Pacific, advocates say. Perfecting the technology isn’t an easy swim. Maintaining communications deep underwater is more difficult than in the sky, and conditions below the sea’s surface can be harsh. | The Wall Street Journal ($)

📚 Investing

Every technology has a limited open window when it’s a good idea to start a new company. The internal combustion engine technology window was open between 1899 (Buick) and 1925 (Chrysler). After 1925, no interesting US car company was built (Jeep in 1941 was a branding innovation and a function of a world war). After 78 years, a new technology window opened in 2003 with battery and electric motor tech that birthed Tesla. |  NFX  

🚘  Car of the Week

Our Automotive Ventures "Car of the Week": a 1988 Porsche 959 SC Reimagined by Canepa. | Broad Arrow

Have a great week,

Steve Greenfield