The Station - Cruise's mea culpa and everything that stood out at the LA Auto Show

Sunday, November 19, 2023

Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.

The LA Auto Show was this week and while it no longer has the cache of pre-COVID days, there were still some notable news that came out of the event. TechCrunch reporter Harri Weber was on the scene helping me cover the news. One of the biggest announcements had nothing to do with a vehicle reveal. Nope, it was Amazon declaring it was now going to sell cars online, starting with Hyundai.

Other coverage included the Lucid Gravity SUV debut and a handy roundup that covered the tech, EVs and other fun stuff that got our attention.

Alrighty, let’s dive in!

Want to reach out with a tip, comment or complaint? Email Kirsten at kirsten.korosec@techcrunch.com

Reminder that you can drop us a note at tips@techcrunch.com. If you prefer to remain anonymous, click here to contact us, which includes SecureDrop (instructions here) and various encrypted messaging apps.

Image Credits: Harri Weber

Micromobbin'

Upway, the French refurbished e-bike marketplace, has raised $30 million at an increased valuation. Normally this piece of news would go in our deals section below, but I wanted to ponder on the meaning of this up round.

Upway is present in multiple countries in Europe and recently expanded to the U.S. It takes in used e-bikes from reputable and desirable brands, fixes them up, and sends them out to customers at a decent price. Getting this business right requires smart supply chain and logistics management, and it appears Upway is on the right path. In today’s capital markets, it’s not as easy to get new investors if you’re not proving out business sustainability.

Zooming out to the macro environment, e-bikes aren’t going anywhere. In fact, as more people buy new bikes, the market for used ones grows. And with all the e-bike battery fires we’ve seen, a company offering safely refurbished e-bikes seems like a pretty good deal.

— Rebecca Bellan

Deal of the week

Just a roundup this week!

Divergent Technologies, a Torrance, Calif.-based startup that developed an industrial digital manufacturing system, raised $230 million in a Series D funding round led by a $100 million investment from Hexagon AB. The round also included participation from new and existing institutional and family office investors.

Gravity, an EV infrastructure startup, raised $13 million in a seed round led by GV (Google Ventures).

GM acquired key Tesla gigacasting supplier Tooling & Equipment International, Reuters reported.

InDrive, the “bid-based” ride-hail platform popular in Latin America and Asia, launched a venture and merger and acquisition division named New Ventures to invest up to $100 million in startups within emerging markets over the next few years. The $100 million won’t come from a fund, exactly. The plan is to invest the money “over the next few years by making annual allocations of investment capital from our balance sheet, starting in 2024,” Andries Smit, vice president of New Ventures told TechCrunch.

Luup, a Tokyo-based shared e-scooter startup, raised $24 million to expand its charge ports to 10,000 by 2025, up from around 4,900 today.

Revolv, an electric commercial fleet company based in San Francisco, raised $25 million in equity project financing from Greenbacker Capital Management.

Shekel Mobility, a B2B auto dealers marketplace in Africa, raised more than $7 million in funding that was comprised of $3.2 million in equity and over $4 million in debt. Ventures Platform co-led the round alongside MaC Venture Capital. Other investors include Y Combinator, Rebel Fund, Unpopular Ventures, Maiora Capital, PageOne Lab Inc., Phoenix Investment Club, Heirloom VC, Pioneer Ventures and other angel investors. Meanwhile, Zedvance, VFD Microfinance Bank, Zenith Bank and Fluna, amongst others, provided the debt component.

Tenet, an EV financing startup based in New York, raised $10 million in Series A funding round led by Nyca Partners. Assurant Ventures and Giant Ventures also participated.

Notable reads and other tidbits

Autonomous vehicles

Texas is poised to be the next hotbed for autonomous vehicles and a likely regulatory battleground. AVs aren’t regulated in the state, but as robotaxis incidents rise, cities may turn to one weapon that California doesn’t have, TechCrunch reporter Rebecca Bellan writes.

Meanwhile, GM has taken the wheel at its troubled AV subsidiary Cruise, going as far as inserting one of its own executives to head up the self-driving car company’s legal and policy, communications and finance teams.

A number of Cruise employees have reported to TechCrunch that morale is at a new low point thanks to a decision by parent company GM to suspend its employee share-selling program. But wait! On Saturday, Cruise co-founder and CEO Kyle Vogt sent an email to employees (which TechCrunch has seen) apologizing to employees, taking responsibility and reversing course, sort of, on the share sale. He opened with:

“I know the news about changes to our RLO program was extemely difficult to hear, and that there were many unanswered questions. We left you with concerns about your colleagues, your careers, and your personal finances. That’s the last thing I want for anyone, and I am truly sorry.”

Vogt went on to say that the company was working on a way to conduct a new tender offer that would mitigate potential tax obligations.

He later wrote that “as CEO, I take responsibility for the situation Cruise is in today. There are no excuses, and there is no sugar coating what happened.”

Earnings

It was a slower earnings week for transportation. Still, there were a couple of noteworthy ones.

It’s still not looking good for Bird, which closed out the quarter after getting delisted from the stock market with a $19.8 million loss. Bird’s going concern warning is very much still in effect — the company has incurred recurring losses and negative cash flows since its inception and has accumulated a deficit of $1.6 billion as of September 30, 2023.

Revenue remains light, despite the Spin buy, at $54.3 million (down from $72.8 million in Q3 2022). Now we’re coming into winter, when cash flows will drop even more significantly. Bird closed out the quarter with $10.2 million in cash and cash equivalents, which by my calculations gives it another 9 months with its current cash burn. The company says it won’t be able to meet obligations over the next 12 months.

Gogoro, too, is still feeling its previous stings of currency conversions. Its revenue of $91.8 million for the quarter is down 10.2% YoY. However, battery swapping service revenue of $33.6 million is up 10.4% YoY. The battery swapping giant closed Q3 with a net loss of $3.1 million, down from a net income of $56.4 million in the same quarter last year. On an adjusted basis, Gogoro reported EBITDA of $13.1 million, which is up from $9.2 million in Q3 2022.

Fisker also had a troubling third quarter, reporting a wider-than-expected loss.

Electric vehicles, charging & batteries

Arrival, the once buzzy EV startup that went public via a merger with a blank check company, secured a $50 million bridge loan —funds that will keep it afloat long enough to explore a potential sale.

Cadillac debuted the Optiq, an entry-level compact crossover EV that will slot below the Lyriq

Candela’s electric hydrofoiling ferry, which is now in production, took its first “flight” in Stockholm.

Exxon wants to drill enough lithium out of Arkansas to power 1 million EVs per year.

GM absorbed BrightDrop, the wholly-owned commercial EV subsidiary, a change that included ousting its CEO. Does the same fate await Cruise, another one of its subsidiaries?

Mercedes plans to build around 30 fast-charging hubs at Buc-ee’s locations throughout the South. TC+ reporter Tim de Chant digs into why supersize convenience stores might be key to unlocking EV fast charging?

Redwood Materials will supply Toyota with cathode material and anode copper foil for battery cells produced at the automaker’s $13.9 billion factory in North Carolina that’s slated to go into production in 2025.

Tesla hits reverse on its previous threat to sue Cybertruck resellers. Also, an upgraded Tesla Cyberquad for kids is back on sale after safety recall.

Future of flight

Archer Aviation signed a memorandum of understanding with Air Chateau, a private aviation operator in UAE, at a value of around $500 million for the planned purchase of up to 100 of Archer’s Midnight eVTOLs.

Joby Aviation and Volocopter gave the public a vivid glimpse of what the future of aviation might look like this weekend, with both companies performing brief demonstration flights of their electric aircraft in New York City.

Zipline hit an important milestone in its U.S. operations. The Federal Aviation Administration approved Zipline for flying its autonomous drone without line of sight visual observers. Soon after the FAA lifted this requirement, Zipline flew its Platform 1 aircraft in the Salt Lake City area without the previously-required visual observers. Zipline is now flying in Utah without this requirement and will soon expand that approach across its U.S. operations, according to the company.

In-car tech

Feds want speed reduction tech in every new car. Are American drivers ready?

A software update bricked Rivian infotainment systems. About 3% of its vehicles were impacted by the issue, which is being addressed with an over-the-air software update.