Hey readers — Thanks for following the latest trends and developments in the transportation space with us in 2022. As the year comes to an end, we are bringing you some predictions for 2023 in the areas of EVs, micro-mobility, eVTOLs, and the airline industry. These predictions do not constitute a report or financial advice, and past performance is not necessarily indicative of future results. Happy new year! | |  Nicolas |  |
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 Data compiled by Argonne National Laboratory from multiple sources, including J.D. Power and the Electric Drive Transportation Association EVs: Through November, 816,154 plug-in vehicles were sold for the year in the U.S. BEV sales comprised 652,046 units — meeting our U.S. prediction for 2022 sales exceeding 600,000 EVs. Thus far, 3,166,594 PHEV and BEV units have been sold in the U.S. since 2010. Tesla Model Y led U.S. BEV sales from January through September with 159,834 units, followed by 146,800 units of the Model Y and 29,500 of the Model X. Globally, Tesla increased its production from 258,580 in Q3 2021 to 365,000 in Q3 2022, delivering 343,000 vehicles. Despite global supply chain issues and ongoing semiconductor shortages for multiple automakers, the overall production of EVs will be further boosted by a drop in the price of 7.79% MoM, which may signal the cost of the material reached its peak in November. CATL, the world's largest battery manufacturer, expressed concern over an eventual rise in material costs stemming from the U.S. Inflation Reduction Act's rules involving credits for units assembled in North America and that have battery materials sourced from the U.S. or a country with which the U.S. has a free-trade agreement. The materials clause would require 50% to be sourced abiding by the criteria described in 2024 and 80% by the end of 2026; thus, while likely to increase costs for foreign automakers, such as Hyundai (which is seeking an exception, while planning to build two factories in Georgia to qualify for EV credits), in relation to building local plants. While it is possible that 2023 budgets for EV production may be cut to adjust for manufacturing localization expenses, we project an increase in EV sales in 2023. We expect U.S. BEV sales to exceed 750,000 in 2023. The rules involving tax credits for assembly and materials have led automakers such as Audi to consider building plants in the U.S. In October, BMW announced its plans to invest $1.7B in EV production and operations in the U.S. Battery manufacturer Swedish battery manufacturer Northvolt put its plans for a new manufacturing facility in Germany on pause, as it considers the Inflation Reduction Act has shifted the supply chain landscape in favor of North America. If exceptions for assembly or sourcing are not made, we foresee five automakers announcing assembly plants in the U.S. and at least two battery manufacturers installing a new location in North America.
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 Autonomous vehicles: In our predictions issue for 2022, we foresaw Nuro's expansion to Los Angeles, with the company announcing it would begin mapping the city in April. Waymo, which has been mapping the city since 2019, announced last week it has been granted a permit by the California DMV to test its driverless rides in vehicles without a steering wheel or pedals for the expansion of its operations to Los Angeles. Waymo also expanded its operating area in San Francisco to 46.5 square miles and in Phoenix to 41.2 square miles, including Sky Harbor Airport, earlier this month. In October, Uber signed a 10-year agreement with Motional to use Level-4 autonomous vehicles for ride-hailing and deliveries. In December, Uber launched a self-driving service in Las Vegas (where Motional also plans to launch driverless operations with Lyft in 2023) and plans to expand to Los Angeles. In 2023, Waymo and Uber will both likely expand self-driving operations to San Diego with modified vehicles. NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Uber.
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 Micro-mobility: While in last year's issue, we predicted a third micro-mobility operator going public on the New York Stock Exchange in 2023, the reduction in the number of special purpose acquisition company mergers likely discouraged Lime from going public. However, in July, Turkish e-scooter operator Marti announced its plans to go public in New York via a SPAC merger with Galata Acquisition Corp. In Q3, Marti revealed a 23% YoY increase in net revenue to $8.9M in Q3, while its adjusted EBITDA margin was 17%. The company argues it was impacted by the effects of inflation on operating expenses. The two shared-scooter operators that went public in 2021, Helbiz and Bird, have experienced year-to-date declines in their stock value by 97.78% and 97.38%, respectively, falling below $0.20 per share. Helbiz's market cap stands at $17.28M at the time of this issue, while Bird — which had been the fastest company to reach a unicorn valuation — currently has a market cap of $51.11M. It is very likely that both companies will be delisted from the exchange in 2023. On the other hand, despite the economic downturn and at least in terms of ridership, usage across modes has been undergoing a post-pandemic boom. CitiBike in New York City surpassed 30 million rides for the year, comprising a 50% increase versus 2019. We foresee CitiBike surpassing 45 million rides in 2023, driven by the increased cost of ride-sharing services. In November, shared e-scooter rides surpassed 30 million rides since 2020 in the U.K. Electric scooter ridership in the U.K. could surpass 20 million rides in 2023, but only if permits are extended and if it does not suffer from a regulatory backlash.
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Aviation: Sustainable aviation fuels (SAFs) — made from used cooking oil, feedstock, forestry waste, carbon captured from the air, and green hydrogen — are expected to reduce CO2 emissions by 75% to 85% over the lifecycle versus traditional kerosene. Boeing CEO David Calhoun has claimed that SAFs will constitute more than 30% of the carbon emission reductions in "the short and medium term." In September, Delta Air Lines announced its plans to purchase 385 million gallons of SAFs from DG Fuels. Delta has an additional agreement with Gevo to buy 75 million gallons of SAFs per year for seven years, starting in 2026. The U.K.'s new Minister for Aviation, Charlotte Vere, recently announced plans to have five new SAF plants under construction by 2025. Several airlines around the world have made SAF purchase commitments, including LOT Polish Airlines, LATAM Airlines, Cebu Airlines, and All-Nippon Airways, among others. The Inflation Reduction Act is in effect in the U.S., which includes credits for SAFs as part of a $1B sub-program on biofuels and cleaner vehicles, and is expected to accelerate purchases from companies such as Neste, SkyNRG, Velocys, and Alder Fuels. Given the incentives and the rise in traditional jet fuel by 34.8% YoY globally and 32.3% in North America, concerns over the economic impact of these purchases on airlines' bottom line have somewhat dissipated. The increase in traditional kerosene in Europe by 37.1% YoY in December will increase the interest of European-based airlines to add gallons to their SAFs purchases. We predict that at least 12 airlines will announce SAF purchases in 2023, of which 50% will be Europe-based airlines. In our 2022 predictions issue, we foresaw that at least two airlines would invest in SAF-producing companies as U.S. airlines revised their collective goal from purchasing 2 million gallons to 3 million gallons by 2030, with the aim of reducing emissions by 20%. In June, Southwest announced its plans to invest in Saffire Renewables, a company formed by D3MAX as part of a Department of Energy project. United Airlines' venture arm made a strategic investment in Dimensional Energy, which included United's commitment to purchasing at least 300 million gallons over the next 20 years. United, along with Honeywell, had previously invested in Alder Fuels in September 2021. Considering the collective goal for 2030 and airline commitments to carbon neutrality, in 2023, we foresee at least three airlines investing directly in SAF companies.
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E-scooters and mopeds: In our predictions issue for 2022, we foresaw Gogoro's expansion through Southeast Asia beyond Indonesia (having launched in Jakarta with GoJek, whose parent company, GoTo Group, invested in Gogoro's PIPE) as it announced a launch of a battery-swapping e-scooter network in Manila, the Philippines. Although we wrote about the company's eventual expansion to Europe, starting in Italy (In 2021, Gogoro partnered with Italian utility Enel X to connect its battery swap stations to renewable power grids in Taiwan), ultimately, it was another Taiwan-based battery-swap moped retailer that established a presence in Italy in 2022, Kymco. In May, Gogoro launched moped scooter sales and charging stations in Tel Aviv, Israel, with retailer Metro Motor and energy company Paz Group. It also announced a battery-swapping network in Delhi, India, in collaboration with moped rental company Zypp Electric. In 2023, Gogoro will likely expand its battery-swapping networks to Dubai. The moped company had a total of 520,000 riders and 11,000 battery-swapping stations in ~2,260 locations at the beginning of December. In 2023, Gogoro will likely surpass 800,000 riders globally, boosted by its new market launches, especially through its presence in India, where there are approximately 200 million motorcycles and scooters in circulation across brands.
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Hydrogen: Hydrogen, as an alternative fuel for ground vehicles, has not had a positive year. A total of 153 hydrogen fuel-cell vehicles were sold in the U.S. in Q3, comprising an 82% YoY decline in sales. In Q4, Toyota announced its plans to manufacture a hydrogen fuel-cell pickup truck in England after Shell began shutting down its hydrogen fueling stations. Honda revealed its plans to manufacture a hydrogen-powered CR-V in 2024. There are an estimated 700 hydrogen stations globally, and Japan is planning its first year-round station for 2024. Given the rise in demand and public interest in battery-electric vehicles and questions in relation to the number of charging locations, we foresee that one of the projects, whether Honda's or Toyota's hydrogen vehicles, will be scrapped in 2023.
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- Vincent Noirbent, VP of product planning and transformation for Alfa Romeo, said customer satisfaction and vehicle quality are being prioritized above sales.
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 |  | Nicolas is a Sr. Analyst at Inside, covering transportation and IT trends. He is an avid map maker and data nerd. Nicolas has worked in the shared-scooter space, as well as advised e-bike and moped startups. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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