VW has announced it is suspending production of its ID.3 and Cupra Born EVs, at its Zwickau and Dresden plants (Germany), from the 2nd of Oct to the 13th of Oct. This decision has been made due to weak demand for these EVs. This is not surprising news, as VW has struggled to compete with Tesla and Chinese EVs. However, what is slightly concerning is the steady news flow, since the start of this year, around demand for their EVs. VW appear to be still defining its strategy and, at this time, it has been reacting as opposed to being proactive. We believe VW will come out with a strong EV strategy however as more time passes, the further they fall behind Tesla and Chinese EV competitors.
Greater Manchester has been busy this week, as it announced it has become the first place in England, to regain control of its buses (in nearly 40 years), after launching its Bee Network. The Bee Network allows customers to obtain joint tram and bus travel at a 20% discount. This comes after Mayor Burnham had capped adult fare at £2 last year. Greater Manchester also announced the launch of its first tranche of bus franchising, as GNW has taken on 2 local service contracts. It will be interesting to see if this inspires other LTAs, to adopt this devolution-esque deregulation. We believe in the short term, it seems unlikely however if this leads to greater patronage and better quality of service, it may sway other LTAs in due time.
Bedeo, a British EV supplier, has announced it will be launching a new retrofitting service, in France, to convert ICE vans into electric hybrids. Bedeo has made this decision due to policy tailwinds, as France provides a €9,000 subsidy for EV retrofitters. The company has set ambition targets, as it aims to retrofit 20,000 vans a year by targeting smaller fleet companies. This is an interesting tactic, as smaller fleets have been a segment of the market that gets forgotten about (by retrofitters), so this presents a good opportunity for Bedeo.
Many industry experts and European car makers have strongly urged Brussels to postpone the impact of the Brexit trade deal for 3 years, to prevent tariffs from being imposed on EVs traded between the UK and EU. This stems from the ongoing saga around the rules of origin, which is coming into effect this January. Essentially from January 1st 2024, 45% of an EV’s value needs to be made up of localised parts, until 31st December 2026, when it will increase to 55%. If the EV falls short of this rule(/metrics) it will then be slapped with an import tariff of 10%. The genesis of this rule was to ensure the European region was protected from cheap imports. However, EVs have been a slight curve ball, as the UK and Europe are (very) reliant on sourcing batteries from Asia and batteries make up a significant portion of the overall value of the EV. Until battery production ramps up in the EU and the UK, European car makers are hoping there is leniency regarding the rules of origin.
Wrightbus has announced it will be supplying 4 StreetDeck Hydroliner hydrogen fuel cell-electric double-deckers to the Sizewell C nuclear power station in Suffolk. This is a pilot study/transaction, with the hope it will result in a 150-hydrogen bus order, that will be utilised by construction workers. The 4 hydrogen buses are pencilled in to be delivered in Q1 24 and for a period of months (undefined) the operational performance will be monitored and evaluated, in order to see if the 150-hydrogen bus order is suitable.
West Sussex has secured a £5.5m grant, from the Office for Zero Emission Vehicles, which will be used to install 1,000 EV charging points in the region. The charge points are planned to be installed in 230 locations ranging from on streets to council car parks. This is great news for West Sussex and a step in the right direction, however, we agree with industry experts, that the UK government need to give councils more funding to truly flesh out the EV infrastructure across the country.
Ford has announced it is pausing the construction of its $3.5bn battery plant in Michigan due to the ongoing UAW strike and concerns about operating the plant competitively. Although when this plant was announced, in February, it was celebrated there was some concern over the licensed technology partnership Ford had with CATL. Predictably, US politicians such as Senator Rubio, raised security concerns due to geopolitical tensions between America and China. We believe once the UAW strikes have come to an agreement, then Ford will release more information regarding the plant.
Fernride, a German-based autonomous trucking startup, has raised $50m in a Series A round, with investors such as DTCF, Munich Re Ventures and Bayern Kapital participating. The startup will use the capital to scale its operations, expand its footprint and increase its sales pipeline.
Redwood Materials has acquired Redux, a German-based lithium-ion battery recycler company. Redwood views this acquisition as a way to accelerate its expansion into Europe. This is the company’s second acquisition in 12 months, alongside raising $1bn in a Series D round this August. We would not be surprised if Redwood Materials continues to grow inorganically in the coming 12 months.
Mottu, a Brazilian motorcycle rental company and last-mile delivery marketplace, has raised $50m in a Series C round, which was co-led by QED Investors and Bicycle Capital. The startup plans to use the capital to increase its (already strong) 50,000 customer base in Brazil and by entering new markets.