🌎 Accelerating EVs: fits and starts #69
Speed bumps on the road to the EV transition and Rivian’s IPO
Holding folks in Louisiana in our thoughts as Ida makes landfall - it’s hard to fathom reliving sixteen years to the day of Katrina.
In this week’s issue, we go deep on EVs and what makes it so hard - tl;dr, the combination of new drivetrains, supply chain shortages, and a new energy ecosystem make the shift to electric a bit less plug and play than the flashy announcements seem.
We’re also getting lots of good comments (keep em’ comin!) on our Friday $16b mid-year investment investment action round-up. If nothing else, we’re reminded that this is hopeful progress against an increasingly uncertain future.
Adding to the Q3’21 funding, this week’s activity includes Trove circular shopping, Urbint infrastructure support for climate risk, and Sound Agriculture’s alternative fertilizers.
Thanks for reading!
Not a subscriber yet?
Speed Bumps on the Road to EVs
While Biden is pressing forward with the ambitious goal to make half of the US fleet electric by 2030, the start of the EV transition is hitting some speed bumps. With nascent upstarts like Tesla and Rivian dominating the early EV market, legacy automakers are playing catchup with flashy big announcements about transitioning to all-electric - backed by billion-dollar checkbooks.
But, in practice, the automakers’ rapid shift to EVs has already yielded several hiccups. Last Friday, GM expanded its most expensive recall to date at ~$1.8bn, with all Chevy Bolt models since its 2017 launch prone to battery fire risks. Within the past year, Hyundai and Ford have also issued recalls totaling more than $1.3bn due to charging and battery fire issues.
As automakers spend billions to build out battery gigafactories and retool existing manufacturing facilities, EV margins are expected to lag behind those of combustion vehicles until at least the mid 2020s. Production will also take time to ramp up - despite Ford already receiving 120,000 F-150 Lightning reservations, the Detroit auto giant has only been able to double production to 80,000 a year by 2024.
So why is the transition from combustion to battery electric so hard?
🚗 Same exterior, different interior. While the shell exterior might remain the same, EVs have a different interior architecture - from the powertrain to the motor and battery. Legacy automakers have worked with the same petrochemical energy sources for the last 100 years and shifting to batteries is a fundamentally new technology. These electric machines not only require different parts and manufacturing techniques, but also an upskilling of the existing auto workforce. In August, 2,000 Honda employees chose to retire early instead of retraining to work on electric vehicles.
🔩 Supply chain shortages. Semiconductor chips and batteries, essential to these new super computers on electric wheels, are undergoing a critical supply shortage with automakers at the back of the queue. Auto OEMs are forced to rethink the visibility and resiliency of their supply chains - whether to take the hit on their balance sheet by vertically integrating up the stack or to continue relying on third party suppliers with other priorities.
✋ Supporting EV services ecosystem. Beyond production itself, EVs require critical services like charging and roadside assistance. As Reilly from Trucks VC noted “Charging is as much a part of the electric vehicle experience as the vehicle itself. If you’ve driven a Tesla and charged it on the Tesla network vs a Volkswagen within their network, it’s a very different experience today – and companies are waking up to that.“ An entire ecosystem for maintenance and repair needs to be built in tandem to accelerate demand and lower barriers for EV adoption.
While automakers are facing the headwinds of dramatically shifting their vehicles now, those that are even further behind will end up paying more later - or go out of business entirely (case in point: hasty production leading to expensive recalls). This phase of electrification will create a lot of winners and losers, depending on how incumbents choose to allocate their capital upfront.
Deals of the Week (8/23-8/29)
⚡ Form Energy, a Boston, MA-based maker of energy storage systems, raised $240m in Series D funding from ArcelorMittal’s XCarb Innovation Fund, TPG Rise, and others.
🏠 ICON, an Austin, TX-based startup that 3D prints “resilient, energy-efficient” homes, raised $207m in Series B funding from Norwest Venture Partners, 8VC, BOND, Ensemble, Fifth Wall, and others.
⚡ Ample, a San Francisco, CA-based startup working on modular EV battery switching technology, raised $160m in Series C funding from Moore Strategic Ventures, Shell Ventures, Momentum VC, and others.
⚡ Energy Vault, a Switzerland-based developer of utility-scale battery storage technology, raised $100m in Series C funding from Prime Movers Lab, SoftBank, Aramco, Helena, IdealabX, Pickering Energy Partners, and Crexa Capital Advisors.
🛍️ Trove, a Brisbane, CA-based e-commerce infrastructure company powering circular shopping, raised $77.5m in Series D funding from G2 Venture Partners, Bank of Montreal, Capital One Ventures, Commerce Ventures, and Wellington Management.
⚡ Urbint, a New York, NY-based startup using AI to protect energy and telecom infrastructure and workers, raised $60m in Series C funding from Energize Ventures, American Electric Power, OGCI Climate Investments, Energy Impact Partners, National Grid Partners, Blue Bear Capital, and Salesforce Ventures.
🌱 Sound Agriculture, an Emeryville, CA-based alternative fertilizer company, raised $45m in Series C funding from Bayer, Northpond Ventures, Syngenta Ventures, Cavallo Ventures, Fall Line Capital, and S2G Ventures.
⚡ LevelTen Energy, a Seattle, WA-based startup facilitating the purchase of renewable power, raised $35m in Series C funding from NGP ETP, Google, MCJ Collective, and others.
🌱 Biome Makers, a Sacramento, CA-based soil testing startup, raised $15m in Series B funding from Prosus, Seaya Ventures, Viking Global Investors, JME Ventures, and Pymwymic.
🏠 Chasm Advanced Materials, a Canton, MA-based developer of carbon nanotube hybrids, raised $15m in Series C funding from WAVE Equity Partners, SWM International, and Birla Carbon.
💧 Gross-Wen Technologies, a Slater, IA-based company using algae to clean wastewater, raised $6.5m in Series A funding from ISA Ventures, Iowa Farm Bureau's Rural Vitality Fund, Next Level Ventures, Ag Startup Engine, Oman Ventures, 1330 Investments, and others.
🔥 Firemaps, a San Francisco, CA-based marketplace for home hardening against wildfires, raised $5.5m in Seed funding from Andreessen Horowitz, Uber CEO Dara Khosrowshahi, and Addition’s Lee Fixel.
⚡ Installion, a Germany-based installation service provider for utilities undergoing energy transitions, raised $4.7m in Series A funding from Eneco Ventures and others.
🌱 Avalo, a genome analysis company focused on climate-resilient plants, raised $3m in Seed funding from Better Ventures, Giant Ventures, At One Ventures, Climate Capital, and SOSV.
⚡ Hypervolt, a UK-based EV charging company, raised an undisclosed amount of Series A funding from Baleen Capital.
🔋 Relectrify, an Australia-based battery technology startup, raised an undisclosed amount of Series A funding from Energy Innovation Capital, Utility Energias de Portugal, GS Futures, and others.
Exits & New Funds:
🚗 Rivian, a Plymouth, MI-based electric vehicle startup, filed paperwork with the SEC to go public. After 11 years in the business, the automaker hopes to deliver their first pickup truck this September (cue the snarky Elon tweet).
In the News
The reinsurance giant, Swiss Re signed a 10-year, $10m deal with Climeworks - the biggest single order for the DAC company to date. For comparison, Microsoft has previously bought 1,400 tons, and $250k from Stripe. At Ocra, their new pioneering Icelandic plant, the cost is “several hundred dollars / ton.” Captured CO2 is added to water and pumped down into basalt rock under the plant where it converts into carbonate.
The Federal Aviation Administration’s decarbonization efforts stay grounded with a new $20m grant for zero-emissions vehicles and electrification of ground operations at US airports.
Meanwhile the shipping industry sets sail with significant decarbonization purchases from Maersk’s $1.4b investment in 8 new “carbon-neutral fuel” ships and launch of Yara’s electric and autonomous cargo ship. The impact of the massive purchase from Maersk hinges on the sourcing of truly sustainable methanol or other biofuels.
According to Sen. Chuck Schumer, the Senate Democrats’ budget resolution proposed tax and infrastructure package would alone cut GHG emissions to within 5% of Biden’s 2030 goal. While the report isn’t public yet, the bulk of the spending will fund the Clean Energy Payment Program and other clean energy tax incentives. More on CEPP from star energy Prof. Jesse Jenkins.
As Jerome Powell’s tenure nears its end, an environmental group sent a memo to the Biden admin with clear asks for how the future Fed Chair should prioritize climate risk at the central bank: limit investment portfolio GHG emissions and stress-test banks for extreme weather shock readiness.
Meanwhile, around the world, central banks have discreetly started their own accounting of climate risks. Regulators from Asia to the EU have started issuing measures like issuing zero-interest loans for sustainable projects or limiting investments to stranded assets.
The Singapore Exchange is the first exchange in Asia to propose mandating climate-related disclosures for companies by 2023.
For the first time since the start of the Belt and Road Initiative, China hasn’t invested a yuan on coal projects this year. US special climate envoy John Kerry is heading back to China in hopes of signing a moratorium on international coal investment forever.
UNICEF introduced a new climate change risk index, specifically measuring the exposure and vulnerability of future generations. The Children’s Climate Risk Index posits that the climate crisis is a child rights crisis.
In the US, even rainfall has sides to pick. As the west gets drier, the east gets wetter with climate change.
Carbon Mapper teamed up with an impressive crew from RMI, Planet, NASA, and CARB to make CO2 and methane emissions at the facility scale transparent for all.
Is the PACC curve the new MACC curve? Keeton Ross introduces the pragmatic abatement cost curve, a decade and a half after McKinsey popularized it’s marginal cousin.
Is ESG investing’s time of plenty coming to an end in the era of cheap, dividend paying oil stocks?
All hail the humble porgy; sustainable and delicious on the grill.
In honor of National Hydropower Day, the top 10 reasons why we should love water batteries according to the DOE.
AI climate data modelling could help limit the impact of future catastrophes, but what happens when there’s not enough climate data?
AirCarbon in your Air Jordans? Nike is partnering with Newlight Technologies’ carbon-negative “AirCarbon” biomaterial from ocean microorganisms.
Opportunities & Events:
*** 🚀 On Deck Catalyst: For highly ambitious early-career people who are founding, working at, or investing in startups. An 8-week remote, part-time program that emphasizes learning from peers, leveling up your career, and building new projects together. Apply here by September 7th!
🗓️ The Energy Transition in Mining: Join Vimson Group and Newlab on September 9th for a moderated discussion on how the mining industry should execute on sustainability goals.
🗓️ For ClimateTech Summit: Join two days of immersive conversation and sharing with the current cohort of founders as well as a range of experts on advancing early-stage climate innovation on September 15th.
🗓️ Greentown Labs Climatetech Career Fair: Join Greentown Labs in Somerville, MA in-person on September 16th for a career fair featuring over 180 startups.
💡 Emerging Climate Technology Framework: Consultation period is open until September 16th for feedback on CDP and Breakthrough Energy’s impact metrics for investing in emerging climate technology.
“A leading indicator of where the world is headed is where the smartest people are spending their time. A decade ago, it was mobile. Today, climate and crypto are consistently the top two areas that come up anecdotally in my conversations with talented young people… and [with] high performing employees who are disillusioned with their current job at a big tech company. If anyone has quantitative data to back up the magnetic pull of climate and crypto for talent, I’d love to see it.”
That magnetism is attracting climate matches on the CTVC Job Board! It’s the last week for companies to publish for free to get in front of motivated climate candidates who have been hyperactively applying to jobs like:
Investment Manager @Avesta Fund
Director of Operations @Solstice
Head of Sustainability @DoorDash
Associate, ESG & Impact @Energy Impact Partners
Software Engineer @Myst AI
Chief of Staff @Rewiring America
Feel free to 📩 send us new ideas, recent fundings, or general curiosities. Have a great week ahead!