The Biden-Harris Administration has given automakers additional flexibility on battery mineral requirements for EV tax credits on some crucial trace minerals from China, such as graphite. Automakers have been given an extra 2 years to shore up sourcing of graphite (and other crucial materials) which are considered difficult to trace to their origin. However, from 2025 onwards, plug-in cars containing critical minerals from businesses controlled by countries deemed a Foreign Entity of Concern (FEOC), such as China, will be disqualified for tax credits (up to $7,500). However, the rules (for now) allow automakers to obtain materials from foreign subsidiaries of privately owned Chinese companies in non-FEOC countries, such as Australia, that can count towards tax credit eligibility. This pragmatic approach has been welcomed, by the Alliance for Automotive Innovation, as it highlights China’s dominant position within clean-tech supply chains and the ongoing difficulty of (on)shoring(/diversifying) up supply chains by the USA.
Rivian has announced that it will receive an incentive package of $827m from the Illinois Department of Commerce and Economic Opportunity. This package will help Rivian expand its existing EV plant in Illinois, support building its next-gen R2 EV, flesh out its infrastructure and boost job training programs for its workforce. Rivian had previously stated that it would be building and opening a new $5bn factory in Georgia, however, it has now opted to remain in Illinois. The decision to stay in Illinois, for the time being, has helped save the company more than $2bn and move up the timeline for the R2 SUV.
Porsche has announced it is expanding its use of alternative drives, specifically, in its transport logistics operations. The company is implementing a blend of electric and biogas-powered HGVs at its key German production sites in Zuffenhausen, Weissach, and Leipzig. Interestingly, Porsche’s ongoing trial of synthetic diesel fuels (HVO100), scientifically supported by the Karlsruhe Institute of Technology, showcases significant carbon dioxide reductions. It has been successful in creating partnerships with logistics companies, such as Keller Group, to ensure the use of green electricity for electric HGV operations.
Elcogen, an Estonian manufacturer of clean energy technology, has announced it is developing a new production facility in Tallinn. This new facility will focus on expanding its solid oxide fuel cell (SOFC), solid oxide electrolyser cell (SOEC) and stack manufacturing capabilities. This facility is set to boost capacity ranging from 10MW to 360MW and is pencilled in to be operational by Q2-Q3 2025. Consequently, Elcogen, expects efficiency gains, from the new facility, to result in a 60% cost reduction in production, thus making it scalable.
Wrightbus has been named Northern Ireland’s fastest-growing business by the Growth Index on the back of 5 landmark deals in Germany. Wrightbus is proactively looking to increase its headcount, as it plans to scale up around Europe. The company is looking to recruit 80 apprentices to add to the 50 it already employs to help meet the growing demand. It is important to highlight that due to the strong pipeline for its zero-emission vehicles, it has increased production rates to 22 buses a week, compared to 8 buses, only 2 years ago. Furthermore, based on the growing demand, we anticipate this figure to increase to 26 buses a week by the end of the year.
BMW Group San Luis Potosí Plant (BMW Group in Mexico) has announced it is significantly expanding its plant capabilities to help accommodate the production of its latest EV models. BMW will invest c€800m to develop the plant, which will include, introducing a high-voltage battery assembly line, expanding the body shop and logistics areas, and installing (more) photovoltaic systems. It is important to highlight that BMW is keeping to its local for local principle, whereby it strategically places its battery assembly facilities close to its vehicle production plants globally. This is, in part, to help minimise any potential geopolitical and economic disruptions. Consequently, this helps enhance operational efficiency and reduces the environmental impact of its processes.
Deals
Wayve, a UK-based developer of Embodied AI technology for automated driving, has announced it has raised $1.05bn in a Series C round led by SoftBank, with NVIDIA and Microsoft also participating. Thus, making it Europe’s largest AI deal to date and it anchors the UK’s ambition to position itself as a world-leading AI hub. Wayve is a market leader in Embodied AI technology, which integrates, advanced AI into vehicles and robots to transform how machines interact with, comprehend, and learn from human behaviour in real-world environments. This results in greater usability and increased safety in autonomous driving systems. Most of the capital raised will be used to fully develop and launch the first Embodied AI products for production vehicles. It plans to deploy its autonomous systems in cars in the coming years. Embodied AI represents the next frontier of AI innovation, going beyond Generative AI and large language models. AI and autonomous vehicles are currently hot sectors, and we anticipate more capital will be invested in startups that operate in those markets, for the remainder of the year and potentially spill over to Q1 25.
Motional, an American-based autonomous vehicle startup, has secured c$923m in investment from Hyundai. Remember that Motional has been a joint venture between Hyundai and Aptiv since 2019. $475m of the c£923m will be directly invested into the startup, while the remaining $448m will be spent on buying 11% of Aptiv’s common equity interest in Motional. This will increase Hyundai’s stake in Motional to 85% and this transaction should close in Q3 24. These figures sound impressive however they also highlight the high costs associated with developing autonomous vehicles. The startup has also had to face barriers to commercialization due to the uncertainty the market has over the maturity of the technology in the robotaxi sector. However, a lot of capital will be deployed into the robotaxi and autonomous vehicle sectors in the coming months and years, as illustrated by Wayve.
WEX, an American provider of payment processing and information management services, has announced it is acquiring Sawatch Labs to help boost its predictive EV analytics capabilities. Sawatch Labs implements mile-by-mile predictive analytics to determine EV suitability, cost modelling, infrastructure planning, vehicle management, and emissions reporting to help customers track and meet their goals for sustainability and profitability. WEX believes this acquisition will help enhance its ability to support customers through its EV evaluation processes.
EnviroSpark, an Atlanta-based EV charging company, has received $50m in investment from Basalt Infrastructure Partners. To date, the company has been involved in installing more than 8,200 charging plugs across North America. It will use this capital to further expand its owned and operated network of EV chargers. EnviroSpark has been quite successful in building relationships with companies in various sectors, as it has signed strategic partnerships with the likes of Tesla, Waffle House, and Ford dealerships.