The Station - Headwinds for Elon Musk's people mover, Arrival's first U.S. microfactory and big bucks for Proterra

Saturday, October 17, 2020 • By Kirsten Korosec

Hey there! Welcome back to The Station, a newsletter dedicated to all the present and future ways people and packages move from Point A to Point B.

Last week, I packed up my Subaru Outback and took off on a 2,000-mile odd road trip, passing through the Southwest and into the Great Plains before landing in the upper Midwest. As per ushe, I kept my eyes on the road and surrounding transportation in hopes of noting some new trend or shift on the horizon. On the backroads through the plains states, it was — as always — all about the Ford F-150 and a surprising number of Buick SUVs. What I didn’t see was electric vehicle infrastructure. It got me thinking about the slew of electric pickup trucks that will be coming to the market in the next two years and what strategy automakers will use to win over the Ford F-150 and GMC Sierra crowd. Or will they not bother?

What do y’all think?

Email me anytime at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Headwinds for the Las Vegas Loop

The illuminated casinos of the Las Vegas strip.

I know, this is the spot where micromobbin’ typically lives. But regular readers of The Station also know that I like to mix things up. (No one ever called me a traditionalist.) This week, I wanted to bring special attention to a report by Mark Harris that is based on documents he dug up on Elon Musk’s “people mover” project in Las Vegas.

The upshot: documents on the project that Musk’s The Boring Company (TBC) bid for and won seem to show that the so-called LVCC Loop system will not be able to move anywhere near the number of people LVCC wants, and that TBC agreed to.

To help absorb some of the congestion during the annual CES tech trade show, the Las Vegas Convention Center last year planned a people-mover to serve an expanded campus. The LVCC wanted transit that could move up to 4,400 attendees every hour between exhibition halls and parking lots.

Musk’s TBC came forward with a bid that was tens of millions of dollars cheaper than other traditional options like a light rail. The proposal said the LVCC Loop would transport attendees through two 0.8-mile underground tunnels in Tesla vehicles, four or five at a time.

Fire regulations peg the occupant capacity in the load and unload zones of one of the Loop’s three stations at just 800 passengers an hour, Harris reported. If the other stations have similar limitations, the system might only be able to transport 1,200 people an hour — around a quarter of its promised capacity.

There is a cost to the LVCC’s parent body, the Las Vegas Convention and Visitor’s Authority (LVCVA), and Musk if the project fails to meet its stated goals. If TBC misses its performance target by such a margin, Musk’s company will not receive more than $13 million of its construction budget — and will face millions more in penalty charges once the system becomes operational. And of course, LVCC won’t have a viable transportation system.

Deal of the week

Proterra, the battery system technology developer for heavy-duty electric vehicles, has made some headway in the past several years, landing contracts to produce electric buses for municipal, federal and commercial transit agencies and diversifying its business to include a battery leasing program and a creating a new unit called Proterra Powered that will sell its vehicle battery systems, powertrain technology and charging infrastructure to commercial truck and manufacturers of heavy-duty vehicles like garbage trucks.

You might recall that last year there was speculation Proterra was preparing to file an IPO. But that never happened. Instead, and maybe in parallel, the company was busy raising money the old fashioned Silicon Valley way — hitting up private investors. Proterra announced this week that it raised $200 million in a new round of funding from Cowen Sustainable Investment Advisors, Soros Fund Management, Generation Investment Management and Broadscale Group.

This doesn’t mean Proterra won’t go public; stay tuned for action on that front.

Other deals (or potential ones) that got my attention …

BMW and Daimler merged last year five mobility businesses segments into one joint company called Your Now. The automakers are now trying to offload at least one of those segments, parking-app business Park Now, Bloomberg reported. The companies have hired advisory firm Rothschild & Co. on the potential divestment, which is expected to go for several hundred million euros.

Getaround, a Silicon Valley car rental startup, said this week it raised $140 million in a Series E round led by PeopleFund, with new investors including Reid Hoffman and Mark Pincus’ Reinvent Capital, AmRest founder Henry McGovern, Pennant Investors and VectoIQ partners Steve Girsky, Mary Chan and Julia Steyn also deploying capital. Getaround has raised a total of $600 million. (Steyn’s involvement is interesting; If you recall, she led GM’s car-sharing venture Maven, which has since been shuttered. She then went on to become CEO of Bolt Mobility and is now chief commercial officer at VectoIQ.)

Linear Labs, raised $6 million with participation from new and existing investors including Champion Hill, Chris and Crystal Sacca’s Lowercarbon Capital, Kindred Ventures, Gen Fukunaga, Duke Angel Network, Spike Ventures, and Moving Capital — an Uber-alumni investing syndicate. The round follows a deal struck with the city of Fort Worth, Texas valued at $68.9 million includes an incentive package tied to developing an advanced manufacturing facility and creating jobs over the next 10 years.

Point Pickup, which developed a last-mile delivery platform for retailers, raised $30 million in a Series A round from BBH Capital Partners, FreightWaves reported.

It's electric

The EV news cycle was hot this week, including loads of updates from Tesla, some pricing information from Lucid Motors and another big fundraising round and factory plans for Arrival.

Arrival, the UK-based electric vehicle company, has had quite the year. The company had been secretive about its business for four years until January when it emerged from stealth with a $110 million investment from Korean auto giants Hyundai and Kia. Arrival is one of several companies that has developed an electric vehicle skateboard architecture that can be used for a range of models.

Unlike others, Arrival has promoted the use of microfactories to keep costs down. This week, Arrival announced it raised $118 million from funds managed by BlackRock and that its first U.S. microfactory will be built in York County, South Carolina. The $46 million investment into the region will create 240 new jobs. The microfactory will use a new cell-based assembly method to produce vehicles rather than a traditional automotive production line, allowing the production of any vehicle from Arrival’s portfolio, the company said. The microfactory will initially focus on building electric buses.

Arrival is expected to begin operations in the second quarter of 2021, with the start of production in the fourth quarter of 2021.

Lucid Motors CEO Peter Rawlinson told TechCrunch during an interview at our TC Sessions: Mobility event earlier this month that the base version of its upcoming EV Air sedan would be “surprisingly” lower than $80,000. Well, we now know that it will be $69,900 AFTER the $7,500 federal incentives has been applied.

This version of the Lucid Air is, as one might expect, is a more basic vehicle that includes a 480-horsepower powertrain. Lucid has said this version will have a 408-mile range, however the EPA has yet to test it. A dual-motor, all-wheel-drive version is also available.

As Matt Burns’ wrote, this model is critical to Lucid’s success and will allow it to reach more buyers while still offering competitive features.

Of course, Tesla CEO Elon Musk had to weigh in on this emerging EV competitor, tweeting that the “gauntlet has been thrown down,” and announcing the Model S will now cost $69,420.

Meanwhile, Musk also announced that deliveries of a seven-seat version of the Model Y, Tesla’s more affordable electric SUV, will begin in December.

Notable reads and other tidbits

A few more items to note this week, include Uber’s continued path towards streamlining its business. In short, all those other means of transportation, including more futuristic projects like flying cars and self-driving cars, are taking a backseat to ride-hailing.

The latest example came this week with Axios reporting that Uber is seeking strategic alternatives for its Uber Elevate business, including strategic partnerships or a partial sale.

Meanwhile, Uber said it hired Manikandan Thangarathnam, who spent nearly 13 years as a director of engineering at Amazon, to lead the company’s rider and platform engineering teams in Bangalore. Uber, which previously said it was going to hire 140 engineers in India, pushed that number up by another 85 engineers.

Cruise has been issued a permit from California regulators that will allow it to test driverless vehicles on public roads in San Francisco. For now, the permit from the California Department of Motor Vehicles is limited to five autonomous vehicles without a driver behind the wheel on specified streets within San Francisco. Cruise has had a permit to test autonomous vehicles with safety drivers behind the wheel since 2015.

GM is changing the name of its Detroit-Hamtramck Assembly Center to “Factory ZERO.” GM said the name “reflects the significance of this facility in advancing GM’s zero-crashes, zero-emissions and zero-congestion future.” The upshot: this factory is meant to be the centerpiece of GM’s multi-brand EV strategy. The GMC Hummer EV pickup and the Cruise Origin, the purpose-built electric, self-driving, shared vehicle, as well as other electric vehicle will be built there. Production of the GMC HUMMER EV pickup will begin in late 2021.

Gogoro announced that its Eeyo 1s is now available for sale in France, the smart electric bike’s first European market. Another model, the Eeyo 1, will launch over the next few months in France, Belgium, Monaco, Germany, Switzerland, Austria and the Czech Republic.

Local Motors struck an agreement with the city of Toronto to start operating autonomous shuttles on a trial basis. Under the deal, the company’s Olli 2.0 all-electric self-driving shuttle will ferry passengers beginning in spring 2021. The trial is being conducted with Pacific Western Transportation. Each ride over the course of the trial will include two full-time staffers, an operator on board from that partner, as well as a customer service rep from either TTC or Metrolinx, the company Toronto engages for much of its commuter transportation services.