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| Happy Labor Day, Insiders! Today's Transportation newsletter covers: - BMW Mercedes unveils new EVs to challenge market leaders
- EV industry gains traction in China, outpacing Internet companies
- Ryanair sets new passenger record in August
Read on for today's Knowledge Hub and more. If you enjoy reading this newsletter, please share it with your friends and colleagues. Thank you. Shriram
p/Shriram | |
| 1 | | BMW and Mercedes have announced EV ideas and specialized platforms at the IAA Mobility show in Munich as they step up their efforts to compete with Tesla and Chinese companies. Even though these actions are regarded as significant, some analysts predict BMW and Mercedes may still be in last place in the EV race behind Tesla. More: - Mercedes unveiled the Concept CLA Class with a staggering range of 750 kilometers (466 miles) and 400 kilometers with a 15-minute charge.
- BMW announced the "Vision Neue Klasse," a component of their forthcoming EV architecture that will begin production in 2025, as they aim to double EV sales this year and achieve 15% of battery EVs as a percentage of their global sales by the end of 2023.
- As seen by their announcement of eleven new all-electric models to be released by 2027, Volkswagen's approach entails introducing a range of electric vehicles at different price points to target diverse market segments.
- The premium car industry, where Mercedes and BMW compete with Tesla's Model S and Model X, has become more competitive due to a pricing war started by Tesla in 2023, prioritizing market share over short-term margins.
Zoom Out: - According to Counterpoint Research, Tesla had 20% of the global EV market in the second quarter, with BYD coming in second with 15%.
Q: Do you think the recent announcements by Mercedes and BMW will enable them to catch up with market leaders in the electric vehicle market? Join the conversation here. |     | |
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What the numbers say: EV startups and battery manufacturers in China attracted a record $15.2B in venture funding in 2022 despite a fall in venture capital investments overall in China. One in four new cars produced in China are now electric or plug-in vehicles, and the industry has seen a 36% growth in job postings. Chinese EV businesses have also grown internationally, entering markets like Germany, Japan, and Mexico. Relevance: As critical contributors to the country's economic growth, China's EV and battery industries are attracting foreign capital, expertise, and partnerships with major automakers and sovereign-wealth funds. The world's largest market for electric vehicles, China, has strong government support, which has led to the EV sector outpacing traditional industries in terms of hiring and salary ranges. More data: For $700M, Volkswagen purchased a 5% share in the Chinese electric vehicle (EV) producer XPeng. At the same time, Abu Dhabi's government fund invested over $700M in the Chinese electric vehicle producer NIO. Despite intense competition, the Chinese EV market thrives, with approximately 19,000 EV-related firms filing in 2022. | | | |
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| 3 | | Ryanair carried 18.9 million passengers on 103,000 flights in August, its highest-ever passenger volume, despite the cancellation of 350 flights. Compared to Aug. 2022, this outstanding performance led to a 16.9% increase in passengers while maintaining a remarkable 96% load factor. More: - Ryanair expects to carry 183.5 million passengers for the year ending in Mar. 2024, continuing its upward trajectory.
- The airline expects its overall financial results to grow by about 9%.
- Ryanair has encountered outside difficulties, such as problems with air traffic control and airport fees, yet it is still expanding.
- Nearly 200 new routes have been established by the airline, and some sites have been reopened.
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| 4 | | Contracts between the UAW and GM, Ford, and Stellantis are expiring on Sept. 14. UAW President Shawn Fain has taken a tough stance, refusing deadline extensions and even mentioning the possibility of strikes. Fain is also negotiating with all three automakers at once and has accused GM and Stellantis of unfair labor practices for not bargaining in good faith, representing a shift in leadership approach. More: - Analysts predict a strike, probably beginning with Stellantis, will take place given the standstill in discussions.
- Strikes can take various shapes, such as a general strike or targeted work stoppages at certain plants.
- Protracted strikes against all three automakers would significantly impact the automotive supply chain and the American economy.
- According to a Morgan Stanley survey, 58% of investors on Wall Street believe a strike is "extremely likely."
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| 5 | | Expanding on their previous partnership involving GM's OnStar Interactive Virtual Assistant (IVA), which uses Google Cloud's conversational AI capabilities, General Motors (GM) and Google are working together to examine the integration of AI technologies into GM's operations. IVA uses "intent-recognition algorithms" to provide users with query responses and assistance with navigation and routing. More: - The automotive industry is increasingly debating the potential uses of AI, such as its usage in software development, in-car assistance, and product validation.
- Mike Abbott, GM's senior vice president of software and services, emphasized the revolutionary potential of generative AI in improving the experience of owning and using a vehicle.
- GM had already been investigating potential applications for AI as part of its partnership with Microsoft.
- Furthermore, Mercedes-Benz and ChatGPT AI are working together to test ChatGPT AI in more than 900,000 cars across the U.S. to enhance the functionality of its Hey Mercedes voice assistant.
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| 6 | | Denso, a significant supplier to Toyota in which Toyota owns a 24% share, is well-positioned for the EV age due to its expertise in hybrid components, including inverters that can be used for EVs. About 17% of Denso's total revenue came from its electrification systems division, which saw a 24% YoY rise in revenue. More: - Toyota's intention to invest an additional $6.8B in electric vehicles by 2030 will benefit Denso.
- Denso provides services to Ford, Honda, and other automakers, lessening Toyota's reliance on them.
- The company also creates sensors and multimedia systems for "smarter" autos.
- According to S&P Global Market Intelligence, Denso is trading at 12.7 times forecast profits, slightly less than its three-year average of 14.6, and it plans to decrease its reliance on internal combustion engines by 2035.
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- Tesla is rapidly and cost-effectively constructing charging stations, leading to the company winning federal grants worth millions, as their bids for roadside chargers are roughly half the price of their competitors' offers.
- By 2025, Volvo and Evergo intend to set up more than 3,000 EV charging stations throughout Mexico, connecting the country's main tourism routes and spreading into its neighbors' nations.
- Oliver Blume, CEO of Volkswagen, said that the business is prepared for Europe's proposed 2035 ban on the sale of new fossil-fuel vehicles.
- To enable drivers to obtain information and support while driving, Continental is incorporating Google Cloud services into its car cockpit system and using artificial intelligence for this purpose.
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Term of the Day 3(c)(7) fund: A 3(c)(7) rule of the Investment Company Act underlines the conditions under which an investment company can be exempted from registering with the SEC Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE TRANSPORTATION LEADERBOARD (ALL-TIME) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Vibha Chapparike | |
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