5 lessons robotics founders can learn from the AV industry

Throughout the late 2010s and early 2020s, the autonomous vehicle industry captured the imagination of the startup community and the public. However, the category’s meteoric rise preceded an even more meteoric fall over the last 18 to 24 months. From 2018 to 2021, investments in the AV sector across the U.S. and Europe increased by nearly 2.5x, eventually peaking at close to $10 billion in 2021. Then, in 2022, investments fell to $4 billion, with 2023 likely to see further precipitous declines.

Meanwhile, the broader robotics ecosystem has continued to flourish, with companies focused on mostly industrial “vertical” use cases now commanding the bulk of investment dollars. In 2022, these companies attracted $7 billion in investments, defying the broader slowdown in VC investment by growing 15% over the previous year.

We recently analyzed the trends shaping the industry in our State of Robotics report, and identified five lessons that the next generation of robotics founders can take from the successes and failures of the AV industry.

in 2022 ,vertical robotics attracted the most investment dollars.

F-Prime State of Robotics Report. Image Credits: F-Prime Capital

VC excitement for hardware businesses is higher than ever

In the U.S. and Europe, more than $60 billion have been invested in robotics and AV alone over five years, with the AV sector leading the way. AI is making hardware much smarter, which is enabling companies to generate the kind of high-margin recurring revenues typically associated with software businesses.

AI also creates opportunities to disrupt traditional industries with massive addressable markets. For example, across the logistics ecosystem, AV companies such as Aurora are disrupting the trucking industry, while companies like Locus and RightHand Robotics (an F-Prime portfolio company) are transforming how fulfillment operations are done.

For founders, this surge in interest means there are more robotics investors than ever, ranging from newcomers in the category to those with an extensive track record in the space. Even top-tier investors such as Sequoia and Andreessen Horowitz are starting to make investments in the category, an encouraging bellwether for overall VC interest in robotics.

Nevertheless, hardware-oriented investments are not the right fit for all investors, and it’s best to seek out those who have made a commitment to robotics and understand what it takes to be successful.

You must eventually build a real business

As Lordstown immolates, SPAC deals that didn’t go to zero feel like the exception

In 2020 and 2021, we had several months when enthusiasm for new EV manufacturers was crossed with the resurgence of blank-check companies. Also called special purpose acquisition companies, or SPACs, these listed shell companies promised quick access to capital and a path to the public markets, and a wide array of tech and tech-ish companies took them up on the offer.


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In 2020 and 2021, several electric vehicle companies took the SPAC route to raise quick cash and go public, especially because investors were pretty OK with investing in such experimental transactions. Full of enthusiasm, these companies’ investor presentations showed a clear path to production and stellar profits.

It’s obvious in retrospect, but the results often proved to be messy.

U.S.-based EV company Lordstown Motors is one such example. Today, the company filed for bankruptcy protection and sued its former partner Foxconn at the same time. As TechCrunch reported earlier this morning:

Lordstown Motors has made good on its threat to sue Foxconn, the Taiwanese company best known for manufacturing Apple’s iPhones. The EV company took legal action against Foxconn Tuesday, and simultaneously filed for bankruptcy and put itself up for sale. […]

In its complaint, Lordstown says Foxconn misled the EV maker about collaborating on vehicle development plans and was “not the partner that it promised to be.” The complaint accuses Foxconn of pretending to support the Endurance pickup truck and future joint product development in order to secure ownership over Lordstown’s most valuable asset, the Ohio manufacturing plant, and to poach some of Lordstown’s skilled manufacturing and operational employees.

It would be easy to dismiss Lordstown’s failure as the result of a dispute between the two companies. But that would be wrong. In reality, the Lordstown saga is a blend of pure SPAC nasty. Let’s take into account a few pertinent facts to form our opinions.

Lordstown’s SPAC journey

TechCrunch’s reporting on Lordstown has been voluminous and broad, so if you want the true blow-by-blow, please start there. For everyone else content with a summary, allow me:

As Lordstown immolates, SPAC deals that didn’t go to zero feel like the exception by Alex Wilhelm originally published on TechCrunch

Volkswagen’s breakthrough could spark a battery manufacturing gold rush

Inflation hasn’t been kind to batteries. After more than a decade of remarkably consistent declines in the price of lithium-ion battery packs, last year, the trend reversed itself.

The uptick was small but notable. New technologies tend to follow a similar path down the cost curve and batteries weren’t thought to be an exception. But lags in material supplies and soaring demand tacked an extra $12 onto every kilowatt-hour of capacity, according to BloombergNEF.

Just a couple years ago, experts surveyed by BloombergNEF were expecting total pack prices to plunge to $100 per kWh in 2024. Now, that same survey says the industry won’t reach that milestone until 2026.

For the automotive industry, which has largely pinned its near-term decarbonization goals on declining lithium-ion battery prices, the uptick is sure to add pressure on their bottom lines. Automakers have invested hundreds of billions in new factories, expecting demand to match the significant bump in supply. Higher battery costs could threaten those investments.

That is why battery companies and automakers have been working overtime to bring costs down. GM and Stellantis have invested in mining companies, and Ford has signed a deal with battery recyclers to help secure stable supplies, all in an effort to rein in raw material expenses, which make up a significant fraction of overall pack costs.

Manufacturers have been nibbling at the margins, too, bringing down the cost of non-cell pack components to save a few dollars. But those costs only represent about 30% of the total and haven’t been enough to counter the effects of higher material and manufacturing costs for the cells.

Volkswagen’s breakthrough could spark a battery manufacturing gold rush by Tim De Chant originally published on TechCrunch

Why every EV charging network combined can’t compete with Tesla

It’s no secret that the charging infrastructure for electric vehicles generally sucks.

There are exceptions, of course: Tesla has it pretty well figured out, and some highly trafficked corridors are well covered. But overall, the state of fast charging, which can replenish usable amounts of range in 30 minutes or less, isn’t great.

There are plenty of reasons why. Most chargers are located in massive parking lots, usually in a forgotten corner with little in the way of amenities for EV drivers. The equipment itself is notoriously unreliable, with one study suggesting that about a quarter of all Combined Charging System-compatible (CCS) stalls in the Bay Area are out of service at any given time. While charging speeds are increasing, most chargers aren’t nearly as fast as they need to be.

Some of those problems are easier to swallow than others. But one not mentioned above is a deal breaker: the dearth of available chargers. When they’re in short supply, EV drivers either struggle to find a spot or have to wait in line, sometimes for a while.

It’s widely accepted that Tesla’s Supercharger network is the best. It’s broadly distributed, the chargers are generally reliable, and most importantly, numerous.

That’s in part because Tesla’s fleet is the largest fully electric fleet in the U.S., with around 1.6 million vehicles on the road. It makes sense that their network is also the largest, with 17,551 stalls that charge at 120 kW or greater, according to data from the Department of Energy and Supercharger.info.

Why every EV charging network combined can’t compete with Tesla by Tim De Chant originally published on TechCrunch

EVs are going backwards

When you send a rocket into space, you run into a paradox: Around 90% of the weight of the rocket is the fuel that it needs to lift away from Earth. As the rocket accelerates, three things happen: The speed increases, the rocket gets further away from Earth (and from the gravitational pull of the planet), and as the fuel burns off, the rocket weighs less and so can accelerate faster.

We face a similar problem in the world of EVs, with an obvious exception. Technically, car batteries get heavier as they are charged, but the difference is so small that you couldn’t measure it even with the most precise car scale. However, that doesn’t matter, because when you add more batteries to a car, it must always carry all those batteries. That’s a problem that’s growing bigger as cars themselves get bigger and heavier.

A 1984 Volkswagen Rabbit only had 90 horsepower, but its average fuel economy was 34 miles per gallon. The 2009 version of that car had almost twice the horsepower and all sorts of technology advantages, but its average fuel consumption is a paltry 24.6 miles per gallon. Sure, the engines got more efficient and it has a bunch of new comfort features. It’s safer, too, but it weighs almost 1,000 lbs more.

Weight, more than almost anything else, affects the fuel economy of a vehicle.

It turns out that batteries are quite heavy. The battery pack on a Tesla Model 3 weighs more than 450kg (1,000 lbs). The Rivian truck’s battery weighs 800kg (1,755 lbs). And if you buy an EV Hummer, the battery you’re dragging around weighs more than a 2009 Volkswagen Rabbit at 1,300kg (2,800 lbs).

There’s a better way. American drivers aren’t going to like it, and GM killing off the Bolt line is a huge leap in the wrong direction.

EVs are going backwards by Haje Jan Kamps originally published on TechCrunch

Tesla’s Supercharger network will strain under the weight of GM and Ford deals

If Tesla wants to maintain its Supercharger network’s reputation, it’s got some work to do.

The automaker has recently agreed to open a large portion of its chargers to Ford and GM starting next year. The move promises to bolster Tesla’s bottom line as it begins to monetize a costly capital investment, but it also risks upsetting existing and future owners, who will soon have to contend with more competition for charging space.

Currently, Tesla drivers can charge at the largest and most well-distributed network in the U.S that utilizes some of the sleekest hardware and technology. Given Tesla’s total fleet size in the U.S., there are only about 80 cars competing for any given charging stall. That low number has meant that wait times are usually minimal to nonexistent. (Holidays and weekends at high-traffic locations are exceptions, of course.) Tesla’s vehicle-charger ratio is more than twice as good as its competitors combined.

But the Ford and GM deals throw those numbers into doubt by opening more than 12,000 Supercharger stalls out of the 19,210 that Tesla has installed to date. Both GM and Ford have a large number of EVs on the road today — about 120,000 and 90,000, respectively — and they have plans to ramp up North American production significantly.

Tesla owners will likely begin to feel some pain next year. Given GM and Ford’s production targets, it’s likely that the two automakers will put nearly a quarter million more EVs on the road this year and nearly three-quarters of a million next year. By 2025, they could potentially be selling a combined 1.5 million EVs annually. That would bring their combined EV fleet to somewhere between 2.5 million to 3 million vehicles by 2025.

Tesla’s Supercharger network will strain under the weight of GM and Ford deals by Tim De Chant originally published on TechCrunch

GM and Ford could help spark a charging standards war by teaming up with Tesla

Seven months ago, when Tesla announced it would share its EV charging connector design to encourage automakers to adopt the technology and help make it the new standard in North America, few, if any, predicted competitors would bite.

Now, with Ford and General Motors agreeing to integrate Tesla charging tech in their next-gen vehicles by 2025, the EV industry is suddenly on the cusp of a shift that could splinter the market.

“These announcements with Ford and GM solidify that there will continue to be a standards war for a decade,” Arcady Sosinov, founder and CEO of fast-charging startup FreeWire Technologies, told TechCrunch+. “NACS (Tesla’s standard) is a better experience, and more OEMs, we believe, will converge on it.”

Most electric vehicles in the U.S., with the exception of Tesla, use the Combined Charging System, an internationally recognized charging standard developed by a consortium of automotive manufacturers, including Ford, Volkswagen and Daimler. Tesla went a different direction and developed a charging ecosystem (dubbed the North American Charging Standard, or NACS) that includes the charging port and connector. Tesla also built out a network of thousands of fast chargers called Superchargers, which are only accessible to vehicles with the NACS standard.

CCS has been the go-to standard for automakers. However, the quality of Tesla’s charging system — from the size and weight of the charging cables to the quality of the Supercharging stations to the ease of payment — has helped propel the automaker to become the No. 1 seller of EVs.

“Ford and GM are saying they can’t wait any longer,” Sosinov said. “They can’t put their success in the hands of these charging networks that are just not doing it, and that’s a really big statement to make and should be a shot across the bow at folks like the Electrify Americas and the EVgos.”

Tesla is poised to make 7,500 Superchargers available to non-Teslas by 2024, according to a statement from the White House, but it’s not clear whether Ford’s and GM’s alignments with Tesla have changed those plans.

Opening Tesla Superchargers to Ford, GM and possibly other automakers also gives Tesla guaranteed utilization on its infrastructure. But that comes with its own challenges. Tesla Superchargers located along corridors in California and parts of the East Coast are already crowded with Teslas.

Charging isn’t a high-margin business for Tesla. The automaker’s revenue from “services and other,” which includes Supercharging along with Tesla servicing and parts and used car sales, came to $1.8 billion in the first quarter. The cost of that revenue was $1.7 billion. But getting more use out of existing chargers could help Tesla fund the deployment of even more infrastructure, thus fracturing the industry further.

A two-standard system

The EV charging industry is a nascent one, and while CCS advocates might bemoan the premature demise of a standardized charging protocol, the fact remains that we’re already living in a two-standard system. At least in the United States.

GM and Ford could help spark a charging standards war by teaming up with Tesla by Rebecca Bellan originally published on TechCrunch