We went to Move London on November 9th and 10th. Lots of meetings with innovative startups, corporates and partners! This event was also really insightful in terms of conferences: in this article, you’ll find key insights about EV, Micromobility and Investment! Those views were shared during several keynotes and roundtables.
Electric vehicles and distribution
Tom Elvidge – Arrival, about leading the microfactory revolution
Arrival, the UK-based EV company, shared interesting insights about its model.
The startup is focused on commercial vehicles: they decided to adopt a co-construction approach with their partners, to build a custom-made electric van. This is especially true about their partnership with UPS and Uber. Their customers first explained their need, and Arrival gave the approach they can take to vehicle development. Arrival builds vehicles with the goal of removing them easily from the road, and working on the simplest way to maintain them, with less steps as possible.
Arrival thinks its customers need more and more Fleet-as-a-Service models based on a one-stop-shop approach: the company provides all related services to fleet management (both about hardware and software).
Another interesting thing is about Arrival’s microfactories (I already wrote about it here): being less capital intensive requires to think about it from the beginning, and develop a lean approach thanks to technology. Microfactories can produce up to 10K electric vans with 10km2 (production cycle is 6 months from the moment they get the keys of the plant!). It impacts the supply chain:
- Use of local supply chain with suppliers located in an area that decrease shipping costs
- They must think about vehicle shipping cost for customers located in remote areas
About Arrival’s approach towards service network: the startup designs vehicles in a way the component can be easily accessed, with integrated communication tools
Akira Kiron – bp pulse, about delivering the EV charging ecosystem
bp pulse’s VP President shared about its strategy of future mobility solutions: bp pulse will focus on fast charging for EVs, but also hydrogen and fleet management.
The goal is to reach 70K charging points by 2030 in the UK. The company published the rEV Index (Readiness for EVs) to identify pain points along the value chain, here are themain findings about the UK market :
- 175K EV registered in 2020, 300K forecasted in 2021
- Pure EV is the main choice
- 70% of charging is done at home
- By 2030, bp pulse thinks it will be distributed in 40% at home and 20% at workplace
Kristian Rusell – Ferry Auto Inc, about reimagining e-mobility for the next generation of drivers
Car dealers are not optimized for customers. Ferry thinks the distribution model must be reinvented, the customer buying experience will change. There is an opportunity to focus more on the consumer and the end user.
Current auto market in the USA is $1.5T revenue, with 2% penetration in online commerce (because of the “dealer mafia” and OEMs rely on them to be their customer point of contact).
It means that OEMs become deluded and rely on car dealers for marketing, but at the end it’s the least digitized distribution channel.
It will change: OEMs will build sustainable cars, and there are lots of new startups such as Rivian. One OEM said it had to change its distribution model in a way more about distributed supply chain and thinking through different distribution channels. Tesla is the only EV option in USA because they’ve created network effects, they thought electric car as a software you can update.
Ferry wants to be Android for automotive, Tesla is Apple for automotive. Ferry’s goal is to provide an infrastructure system for the US EV ecosystem.
Tesla cannot sell cars directly in Texas, even though they’re building a gigafactory there.
Ferry can sell collected data to oems (customer profile) average age is 36. They can analyze user by user, seeing what they’re browsing. Do they jump off and ask a Ferry ambassador… If a dealer could have this data, it could leverage it and have a simpler relationship with the customer because he would know him.
Kristian Russel – Ferry Auto Inc, Toby Poston – BVRLA and Usha Raghavachari – Ford Motor Company about how new business models are transforming mobility
New models of marketplaces must be found, people are not confident enough in traveling, but also for buying an EV car. People shift from the pandemic made that some people that didn’t need a car need a car now. People are returning to vehicles, but people are asking more services to be delivered at home especially in cities.
Flexibility is key also in terms of products to be used, also personalization is key, BMW bets strongly on micro mobility. Flexibility on supply and demand side but also usage side.
Accelerating decarbonation: a catalyst for new BMs?
Ford is also one fully engaged into electrification, they’re more customer centric but they feel an emergency to design solutions for customers that make more sustainable, but also affordable products. Making people adopt is hard because they’re quite new to customers and innovation in business models helps: is it good to buy a car for the next 5 years that will have half the range of cars that will be produced in 2 years? Subscription models could help staying at the forefront of technology. Numbers of partnerships increased across industries.
OEMs must adapt the same framework when analyzing their carbon footprint to create more confidence for consumers in the electric vehicles.
Where does micro mobility work ?
Shanghai works well because there are no first time cars buyers the electric adoption is high and the government is pushing.
Cities as a customers: London piloted last mile solutions with Ford to create deposits and solutions to carrying food. All the needs of stakeholders must be understood. BMW cooperates with a lot of cities, for example with Rotterdam for automatic switch to hybrid, they partner with micro mobility. Cities can help on the regulatory aspect by deregulating
A well designed solution for all stakeholders must be done but the customer could reject it if the human factor isn’t understood or part of the design process.
Innovations that could success : making cars as updatable as the iPhone and put the customer layer first, the service level and connectivity both for the customer and the vehicle represent something that will take more and more importance. For Ford it’s about thinking of vehicles as robots (automations rather than making digital something that was physical). All among this will be feed by data, BMW thinks about circular economy and building vehicles in a closed loop business model.
Micromobility and new mobilities
Georgie Smallwood – Tier Mobility, about how CPS mapping can eliminate irresponsible scooter parking
Tier Mobility has 212K app downloads, and must convince both consumers and cities, total addressable market is about 200 cities in Europe.
Post-winning the tender: Tier enters into growth phase. Tier thinks sustainability in micro mobility isn’t about discounted price, but rather rewards and loyalty, this is why they developed a user-based charging network (live in 29 cities).
About their operational model: to operate its services, Tier uses 33% gas vans, 50% eVans, the rest is e-cargo bikes. Main emissions are coming from production vs operations.
Tier developed a CPS strategy since it helps complying with cities, while providing a seamless experience of its users. GPS is not the most accurante when it comes to parking for micro mobility vehicles; CPS is more accurate and more user friendly.
How it works: Tier maps the city at the ground level and integrates in the OS. Tier’s CPS technology (provided by Fantasmo) has been launched in Paris and York.
Why is it an answer? GPS inaccuracy is frustrating both for users and cities, since it invites not being respectful of the parking zones, hence upsetting the parking expericne. CPS has a 90% accuracy.
Jack Samler – Voi, about reaching carbon neutrality in micromobility
About keeping micromobility carbon neutral. There are 3 steps: 1 measure emissions, 2 reduce emissions, 3 offset remaining emissions (having financial incentives to offset carbon is only one of the answers).
Measuring emissions is from production to end of life. Direct emissions come from use, rest is indirect emissions. 61% of carbon emissions are coming from production, and 12% from transport. Operations account for 30% of Voi’s emissions.
Reducing emissions is about maximizing scooters lifespan but also achieving zero emissions operations: those 2 aspects account for 90% of their carbon emissions.
Voi will launch a 5 years lifespan scooter in 2021 (their second model, launched in 2019, had a 2 years lifespan and 1 year lifespan for their 2018 model).
They’ve done the development using recycled materials on vehicles designed for facilitating maintenance. The fleet is connected in order for better optimization, but also a second life pogram.
Zero emission operations require using renewable energy and cargo bikes for battery swapping, e-vans for collecting scooters.
Felix Petersen – Spin, Hal Stevenson – Lime, Liz Yu – Onsee and Henri Moissinac – Dott about making micro mobility companies more profitable
Ofo rolled-out a full mechanical and unconnected fleet, this partly explains its failure. In micro mobility, demand is here but the problem is to serve it. Main revolution was about battery and connectivity.
The “Uber blitz scaling” was too much and wasn’t sustainable in terms of asset management, early models weren’t good enough to lead to profitability. The first micro mobility operator scaled too fast without proper operational model, one of key factors to succeed is user experience and use of data. The first operator didn’t had those criterias checked!
Longevity is another key towards profitability: both about vehicles and cities. Innovation is also about creating a safe experience, so people can return the service safely and cities are secured.
Is exclusivity the secret to profitability? Dott doesn’t think so: super efficient operations are key to profitability, multiple services lead to greater services. Multiple markets can be operated in a profitable way, it’s important to have the right amount of deployed vehicles compared to people density in cities (the number of operators must be adapted to a population size in order to perfectly match the demand) fleet size is key!
Lime has 3 customers: cities, riders and people thinking of being a rider. Even when they’re in a Monopoly they don’t act as they’re.
If they’re too many operators it can be difficult for citizens to live in an overcrowded market, a perfect balance must be found between price and operational costs.
Investment trends
Jim Adler – Toyota Ventures about the landscape of future mobility investment
A company lifespan is 20 years compared to the past (61 years in 1961) to reach S&P 500. The technology companies got into the automotive industry. Incumbents took a lot of time to succeed, the new companies path to success is way faster!
Toyota’s perspective for future success will have to rely on more capabilities. Startups are experimenting with the market in this way: they lower risk over time in exchange of greater valuations.
Why is Toyota investing ?
Many investors ask about the TAM but not the pace at which the market is changing (battleship or speedboat). Toyota invests in startups that are well positioned in rapidly changing markets.
Future relies on bundling and unbundling: in music, the first bundling with smoking theory was about MP3. Since MP3: explosion of unbundled business models (Spotify, Apple…)
In mobility: the early 19th century was bundling, then cars from 1908 and development of automotive technologies (a single bundle to capture mobility value). Unbundling from 2010: ride-hailing, micro mobility…
There is a platform stack about product dynamics.
The cloud stack: Go from hardware to customer is difficult the opposite easier.
Going upstack is harder because you don’t know what the customer wants. As an example: AWS, they already knew their customers. The same for Apple and their chips.
The mobility market is about 20x the cloud market (3.2T dollar).
Universal Hydrogen one of their portfolios. They are at the bottom stack, they invested because the CEO used to be CTO of airbus and was at the upstack before and knew what the customer want.Revel another of their startup, they’re improving their customer offering with the ride hailing and e-bikes and then offered infrastructure (moved down stack).
Joby is another of their SU (eVTOL), it started with a vehicle platform, before going customer offering. One of their co-founders was from Pinterest and knew about what customers wanted, which convinced Toyota to invest.
Benoit Savattier – TotalEnergies Ventures, Jim Adler – Toyota Ventures, Anthony Doeh – SoftBank about becoming the next mobility unicorn
What are the biggest mobility trends?
TotalEnergies identified 2 main trends: electrification (government pushing for EV adoption, carbon penalties, OEMs pushing in this way), EV charging experience, battery manufacturing and an emerging one the vehicle to green.
SoftBank saw the first trends such as ride hailing and telematics. The second fund invested in Tier in micro mobility space, electric vehicle supply, eVTOLs.
Are there long- term effects of Covid in the mobility landscape?
Supply chains sacrifice efficiency for resiliency, but new manufacturing models are emerging, last mile is now a BtoB stuff not a BtoC stuff anymore. The pandemic changed logistics and supply chain, big boxes are not mostly for companies, people do not move towards big malls and shops. New dimensions will be in the air.
Key ingredients to reach unicorn status?
Toyota Ventures look at the size of the market and its openness to disruption. Companies can control their team’s product and business models and they diligently look at those aspects. SoftBank looks for an established economic strategy and clear profitability’s path and returns.
Mobility is a local game which is something to have in mind when entering in a market and startups must think about replicability and scalability
How can the pandemic be leveraged for sustainability ?
Lot of money is poured into sustainability but the main challenge remained about electrification of large fleets such as taxis and ride hailers (4x more used than private cars)
Sustainability framework to assess ESG aspect of startup invest ?
SoftBank only does a financial investment, but invests in companies that take sustainability into account because they’re “forward looking” companies, it’s important for companies to show how close their esg initiatives are linked to their success.
The next issue is about the bad consequences of electrification: about mineral extraction for instance, that’s why Toyota looks at hydrogen based startups. Ride hailing in NY had employed FTEs because it improved the customer experience, which is also another aspect of sustainability.
What is the support provided to startups ?
Toyota Ventures does not involve BUs in their decision making investment, after the deal they have a portfolio support team dedicated to create synergies with BUs. It’s successful.
SoftBank doesn’t work with startups that are finding product fit, they leverage their portfolio companies that can help (networking advising…) they also help in financial advising (IPO SPAC M&A) in their public journey. Total Energies hasn’t internal business units at their investment committee, they have a business development team to help creating projects with the business units.
Alex Smout – InMotion Ventures and Steve Hellman – Mobility Impact Partners about investing in the mobility tech boom
What is the technology that attracts most investments?
Mobility became the centre to most of investment thesis.Sustainability is everywhere and attracts tons of money, especially battery tech and deep tech. Autonomy for trucks in particular but emerging consciousness about the entire value chain of value chain (reuse and recycle)
What is the speed of maturation of mobility ?
Those startups working on the surface level such as operators can go really fast, since it just have to replicate from a city to another, meanwhile deep tech companies have longer development cycle.
Mobility must deal with a lot of stakeholders and could not be that undercovered. There is no one size fits all about mobility, all local specificities must be understood.
Leading mobility solutions:
- EV and micro mobility in Europe
- Mobility solutions that can be adapted rather than translated into other geographies
- China leads the way in connected vehicles
Norway has manipulated taxes and fees and incentives in a way EV is cheaper since passenger vehicles respond to a single thing which is price.
Mobility isn’t uniform (micro mobility autonomy supply chain…). Ride hailing failed in its promises about decongestion. Investors must anticipate whether the promises can be done. Investors not only must look at sustainability but also on other KPIs for finding startups that could be sustainable and profitable in the long way.
