Hello and welcome back to The Fast Charge, a British EV newsletter.
In today’s edition… COP26 auto deal snubbed, Rivian stock is stonking, and Britain’s battery hopes take a hit as chemical giant Johnson Matthey bows out.
As ever, if you have any questions or thoughts, please do contact me at email@example.com.
In the last week…
RIVIAN IPO: When Arrival, a little known British EV start-up, exploded on the scene with a $13bn valuation, I’m sure many people thought the ‘EV investment mayhem’ had peaked. And it hadn’t, not by a long shot. Because last week, Rivian, the American EV start-up that is backed by Amazon and Ford amongst others, hit the market with gusto. Many had anticipated the IPO of Rivian to be big, but the surge in buying (and the stock price) has been wild. Rivian shares were first listed at $78 before opening to a price of $106.75. The current price is around $150. That puts the value of Rivian, a start-up with no revenue, at $110 billion. The reason for the magnitude of Rivian’s stock success is that it’s not only building huge car plants, but it also had large orders from companies like Amazon. Plus, its link with Ford could lead to wider collaborations beyond its own company. Amazon is certainly content. When the stock debuted, they spent $200m buying more of the company – they now own around 17%. Read more.
What about their cars? While it can be easy to think of Rivian as overinflated, I personally really like the approach they’ve gone for. Broadly, Rivian’s products can be put into two streams. Firstly, enterprise partnerships. This is where their value is really coming from. Aka. Massive orders to build delivery trucks from companies like Amazon who will use them globally. Secondly, outdoors people. Rivian is building consumer vehicles that are off-road first. Aka. An all-electric pick-up and an SUV. Both of the cars look gorgeous, almost like a Land Rover in shape. And this whole brand direction is right up the alley of every American. Big cars for the big outdoors. Much like Tesla did targeting a luxury/premium niche to begin with, Rivian have smartly tied up this ‘adventure’ demographic.
TWO WHEELS: In non-car news, I felt it worth mentioning that Zoomo, a company that lets out highly durable electric bikes to couriers, has secured £60m in new funding. I find this extremely interesting as it points to the dramatic shift in how last-mile delivery happens. Only a year ago, if you were to order a takeaway – certainly in London – guaranteed it would turn up on a moped. Now everyone rides an e-bike. Through Zoomo, you can subscribe to an e-bike from them for as little as £40 per week – potentially a huge saving to a moped. “We really see ourselves disrupting Rivian,” Mina Nada, CEO and co-founder of Zoomo, told TechCrunch. He believes that in future we won’t need huge vans driving around doing deliveries creating congestion when you can do it via a bike.
TAX CREDITS: President Joe Biden hot on the back of securing a $1.75 trillion dollar infrastructure deal has caused upset in Mexico and Canada for suggesting EVs should be built in the US. According to the two latter, a new US policy to offer a tax credit of $7,500 for electric vehicles made only in the US from 2026 and $4,500 of tax credits for purchasing electric cars made with union labour would break trade deals with the nations – essentially as it would make imports more expensive for US buyers. The policy will form the basis of a discussion in the US later this week as Biden hosts a ‘three amigos’ summit with the two countries. Read more.
IRISH FARCE: Due to a miscommunication between local authorities, Northern Ireland has become the only part of the UK not to secure any funding from the on-street residential chargepoint scheme. The £20m OSRCS was launched in February 2021 to improve charge options for people who live on terraced streets or in flats. The reason for the delay has been that only councils can apply for funding but apparently the NI government is the one with responsibility for paths. Therefore, a Yes, Minister style bureaucratic farce has occurred. However, politicians have now come together to overcome the issue to get a bid in. Needless to say, isn’t the lack of urgency worrying. Read more.
FT EVENT: As a heads up, next Tuesday the FT is hosting a ‘Future of Mobility’ event. It costs £200+ to attend virtually but has several fairly high-profile speakers including government ministers. These FT events are normally a pretty good gig. However, I always take the topics covered with a pinch of salt. Like any event, the agenda is often determined around the sponsors business. Register here.
CHIPS AWAY: It seems the semiconductor crisis has finally clinched Tesla. According to Electrek, a number of new Tesla Model 3 and Model Y vehicles have been delivered in the last few days with missing USB ports. While some owners had been warned of the issues beforehand others were not. Before now, Tesla had escaped relatively easily from the chip crisis but alas. This story follows the article last week that BMW was removing touchscreens from some of its models too to use fewer chips. These issues are allegedly pushing up prices for new cars but also creating an increasingly active second-hand market (that has apparently increased by nearly a fifth compared to last year). Read more.
USED MARKET: Speaking of second-hand cars, Q3 data released last week by the Society of Motor Manufacturers and Traders (SMMT) suggested that the demand for used plug-in vehicles is growing. According to SMMT, the used plug-in vehicle market increased to 1.4%, up from 0.9% the previous year. While you can easily think ‘that’s small’, I imagine it’s probably the bottom of a very large upward curve. Read more.
BATTERY CANNED: Back in May of this year, Johnson Matthey, the chemical giant opened a new battery facility in Oxford with Business Secretary Kwasi Kwarteng in attendance. It was to celebrate how they would be researching the latest technologies and putting Britain on the global battery supply map. Six months later, Johnson Matthey has thrown in the towel with its plans as it believes it’s too far behind competitors. It feels like such a strange announcement just as COP26 ends, but there we go. This should worry ministers a lot. Not having our own battery technology in this country means we have to rely more on companies outside the UK, like China. As we’ve already seen with semiconductors, reliance on foreign imports can wreak havoc. This could become especially true when dealing with hard-to-reach resources like lithium. As you would expect, JM’s stock price has fallen 17% as a result. Read more.
SAD TIMES: Speaking of COP26, it’s shame that despite the claims by many carmakers that they are going green, a whole auto industry signed zero-emission deal could not be completed last week. In the end, only Ford, General Motors, Daimler, BYD, Volvo Cars and Jaguar Land Rover signed a pledge to sell only zero-emission new vehicles by 2035 in the biggest markets and 2040 in others (alongside 24 countries) at COP26. Those who didn’t sign included Toyota, Stellantis, Hyundai and, quite surprisingly, VW. Thomas Ingenlath, the boss of Polestar, said it was ‘failure’ and an ‘embarrassment’. See all the signatories here.
By Tom Riley