Overview
XPeng has unveiled its new platform architecture, Smart Electric Platform Architecture (SEPA) 2.0, for making EVs, which will serve as the building blocks to reduce the cost of development and manufacturing. SEPA 2.0 is projected to shorten the R&D cycle for future models by 20%, as well as cut costs for ADAS and smart infotainment systems by 70% and 85%, respectively. SEPA 2.0 will be compatible with multiple vehicle platforms for wheelbases between 1,800mm and 3,200mm and can support a range of vehicle types, from hatchbacks to MPVs and pickup trucks. This is XPeng’s response to the Price War (started by Tesla).
VW will partner with Vale, Ford, and China's battery minerals producer Zhejiang Huayou Cobalt, to help build out the Indonesian EV ecosystem. Indonesia has an abundance of raw materials, such as nickel, that can be used in producing EV batteries. VW will focus on EV battery projects. The aim of these partnerships is to reduce the cost of producing EVs, by building out an integrated EV supply chain(s) and to help further accelerate the adoption of EVs. Indonesia is in the early rounds of proposing a limited FTA, for specific battery-related materials, with the USA. This potential proposal would allow companies that use raw minerals from Indonesia to meet the IRA battery qualifications for EV tax credits.
Ford’s BlueCruise technology, has been approved in the UK, which will allow drivers to drive hands-free. This is the first hands-free system approved in the UK and it will allow drivers to take their hands off the wheel at speeds of up to 80mph. However, these cars will have a camera installed which will monitor the driver’s eyes, so they stay alert. BlueCruise, to begin with, will only be available for 2023 models of Ford's electric Mustang Mach-E SUV.
Tesla has cut prices for the 6th time this year, by slashing prices for some of its Model Y and Model 3 EVs in the USA. The timing of this cut is interesting, as Tesla reports Q1 earnings on Wednesday. Even though Tesla has consistently cut prices this year, deliveries for Q1 only rose by 4% compared to Q4 22. This has led to many analysts predicting further cuts, as competition intensifies, for example from Ford and BYD.
Analysts expect Tesla Q1 margins to hit a 3-year low, due to Tesla slashing its prices 6 times between Jan-April. This strategy was implemented to stimulate and boost EV sales against a backdrop of a weak economy and rising competition. Consensus has a gross margin of 23.2% for Q1, which would be a significant decrease from (a record) 32.2% (Q1 22). However, Musk has stated that going forward, a ramp-up in production at its factories in Austin, Texas and Berlin would help improve margins due to economies of scale.
Tesla employees, in the Shanghai factory, have taken to social media to vent their frustration over being told there would be cuts to performance bonuses. Currently, the conjecture about cutting bonuses is linked to a fatal accident that occurred in the factory in Q1. After seeing tweets by the workers, Musk has responded by stating he is ‘looking into it’ after only being alerted to this issue due to the tweets.
The Australian government has unveiled its new EV strategy which will impose a fuel efficiency standard on new cars. This will be decided over the next year via a consultation process. The government has chosen to focus on fuel efficiency, as Russia and Australia were the only two developed nations in the world without fuel efficiency standards. This has meant that OEMs were incentivised to send higher-polluting vehicles to Australia because they could not be sold elsewhere. Although this is a positive step forward, we agree with industry experts, this strategy does not include any new targets for EV uptake or what the fuel efficiency standard should look like. There need to be further meaningful steps to flesh out this EV strategy.
Deals
e&, the UAE telco, has reached an agreement with Uber to buy 50.03% of Careem Technologies, for $400m. Careem is a Middle East-based ride-hailing company, that Uber bought in 2019. Post this deal Careem will be broken into 2 companies: Careem Rides and Careem Technologies. Careem Rides will be fully owned by Uber.
GM Ventures is leading a $50m funding round for EnergyX. EnergyX is a startup that focuses on developing technologies to extract lithium from brine efficiently. Furthermore, GM Ventures will also help develop EnergyX's technology and will have the first right of refusal to buy lithium from any projects developed by the startup.
Whizz, an e-bike subscription startup, has raised $3.4m, with Joint Journey and TMT Investments along with several angel investors, participating.
AutoAlert has been acquired by certain funds and accounts managed by BlackRock. AutoAlert is a provider of data analytic solutions for the automotive industry.