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Electric vehicles is one of the main characters in this newsletter, so I thought it would be worth noting a less visible – but fundamental – aspect of EV history here in North America.
I’m talking about new guidance from US Department of the Treasury (via the Department of Energy) on what it will take for EVs to qualify for the federal tax credit, starting January 1st.
The long-awaited guidance excludes EVs from the tax credit if any of the battery components are manufactured or assembled by a foreign entity of concern, such as China, Iran, Russia and North Korea. (China is the country to watch out for, as the nation has been the dominant and leading supplier of battery components and raw materials.) The guidance expands in 2025 to cover raw minerals extracted, processed or recycled from any of them the entities concern.
Importantly, the departments go further to clarify how they determine what a “foreign entity of concern” or FEOC is. There are two ways: if an entity is subject to the jurisdiction of a foreign country that is a covered nation (such as China), or if a company is owned, controlled by, or under the direction of a government of a foreign country that is performing the relevant activities in a covered nation . What does owned or controlled mean? The two sections have one answer: the entity has cumulative direct or indirect control of more than 25% of the board seats, voting rights, or stock from a covered nation, or if a non-FEOC has entered into a licensing agreement with an FEOC that provides is “effective control” of business operations.
The Association of Zero Emission Transport goes deeper into guidance for those who want it the full analysis. Also, here’s an overview of North American battery factories (we update this list and chart periodically).
The truth is that it will be harder for EVs to qualify for the tax incentive. However, the industry appears to support the rule as it provides needed guidelines and a greater level of certainty as automakers plow billions of dollars into domestic EV and battery manufacturing.
Want to get in touch with a tip, comment or complaint? Email Kirsten at kirsten.korosec@techcrunch.com or Rebecca at rebecca.techcrunch@gmail.com.
Reminder that you can drop us a note at tips@techcrunch.com. If you prefer to remain anonymous, click here to contact uswhich includes SecureDrop (instructions here) and various encrypted messaging apps.
micromobbin’
We hear there are more layoffs Bird. We don’t have all the details, like how many employees are now out of a job, but some employees have posted about last round of layoffs on LinkedIn. Based on social media posts, the layoffs affect a number of teams, from data to strategy and operations. One laid-off employee worked as an electronics engineer, helping to design Bird’s consumer scooter.
This is Bird’s third round in the last two years. Most recently, in October, Bird laid off employees, citing layoffs after its $19 million acquisition of Spin. In August 2022, Bird also cut 23% of its staff and shuttered its retail scooter product in an effort to rein in the previous leadership’s rampant cash burn.
Bird did not explain why it was cut, but layoffs typically occur when a company is trying to reach profitability. Just look Grandstand, which also issued layoffs (about 140 people) this week. Since the Tier is still private, it’s hard to say if it will be able to break out of the red. Bird, however, is so far from profitable, I’m not sure it will ever get there.
In September, Bird was delisted for failing to maintain a market capitalization of more than $15 million for 30 consecutive trading days. As of September 30, 2023, Bird is $19.8 million in the hole and has accumulated a $1.6 billion deficit since its inception. Bird’s going concern warning remains in place – the company doesn’t have enough cash to see it through the year based on its current cash burn.
In short, Bird is knocking on the door of bankruptcy, and I’m skeptical that these layoffs will lead to enough savings to see Bird through the next 12 months.
If you have been affected by the recent layoffs and would like to speak to me anonymously, please contact: rebecca.techcrunch@gmail.com.
Offer of the week
Proterra, you may recall, filed for bankruptcy earlier this year. I dug into “what led to the company’s bankruptcy” in August. Now a part of Proterra will officially live under a new owner.
Proterra received final approval by the US Bankruptcy Court for the sale of the company’s Proterra Powered business line to Volvo Battery Solutions LLC. The $210 million transaction is expected to close in the first quarter of 2024.
Other pieces of the business are still out there, but will likely be completed soon. The sale of its transit business to Phoenix Motor Inc. is still pending, with a hearing scheduled for December 12. The sale of its energy business to private equity controlled by Cowen Equity will be completed through a Chapter 11 Plan of Reorganization upon exiting bankruptcy.
Other deals that caught my eye this week…
EMotorad, an Indian electric bike startup, has raised $20 million in a Series B round led by Singapore’s Panthera Growth Partners. Alteria Capital, xto10x Technologies and Green Frontier Capital also participated. The funding round includes $2.5 million in debt.
GoMetro, a South African technology company active in the fleet management space, has raised £9 million ($11.4 million) in a Series A funding round led by Zenobē Energy, a strategic investor known for financing and operating electric buses. Other investors include new backers Futuregrowth, ESquared Ventures, Kalon Venture Partners and angel investor Greg Fury. Existing investors including 4 Decades Capital, Hlayisani Capital and Tritech Global also participated.
Monterrey, a software company that automates the design and scheduling of EV charging facilities, has raised $2.5 million in a pre-seed round led by Base10 Partners. Also participating were Future Climate Venture Studio, Very Serious Ventures and a few other angel investors, including some of Monterra’s early customers.
Richard Branson will not invest any more money to Virgin Galactic, but says the space tourism company has enough funds to carry it through 2026, according to the FT.
ZeroAvia, the hydrogen-electric aviation startup, has raised $116 million in a Series C funding round, led by Airbus and Barclays Sustainable Impact Capital and NEOM Investment Fund. UK Infrastructure Bank joined the round as a cornerstone investor.
Notable reads and other items
Autonomous vehicles
Cruise it will be much smaller in 2024, according to parent company GM. GM Chairman and CEO Mary Barra and CFO Paul Jacobson said the automaker will cut spending on Cruise by “hundreds of millions of dollars” in 2024, a move expected to lead to widespread layoffs at the San Francisco-based company that employs approximately 3,800 people.
Nvidia is recruiting to fill two dozen roles for a self-driving team spread across the Chinese cities of Beijing, Shanghai and Shenzhen. The unit, consisting of positions in software, end-to-end platform, system integration, mapping and product, is headed by Xinzhou Wu, who is recognized for bringing intelligent driving features to mass-produced vehicles in China in recent years.
Cybertruck
Yes the Tesla Cybertruck gets its own section this week. As I wrote earlier this week, the Tesla Cybertruck is loved and hated. To fans, it’s a symbol of what Tesla and its CEO Elon Musk stand for: creativity, irreverence, rebellion. Others see it as an act of hubris. It could be both. Cybertruck will test if customers still trust Elon.
For publisher Darrell Etherington, the handover event provided the answer: the end of Elon.
Here’s the Cybertruck FAQ to get you started, an overview of everything Elon Musk — and others — have revealed about the Cybertruck, a comparison to other EV pickups on the market, and when the cheapest version will arrive.
Electric vehicles, charging & batteries
Fisher cut its annual production guidance in an effort to free up $300 million in working capital. This is the fourth time this year that Fisker has cut its guidance.
Our Next Actionan EV battery startup, which laid off a quarter of its staff; Automotive News reports.
by Polestar The climate-tweeting bot isn’t actually a bot, for good reason.
Rivian has launched a limited program that will give customers in 14 US states the opportunity to lease an all-electric R1T truck. The company said it will expand its leasing program to include other models and regions.
TC+ reporter Tim de Chant explains why GM and Toyota are shaping up to be the biggest losers in the EV transition.
Tesla won a small battle against Swedish union workers when a court ruled that the country’s transport authority must hand over license plates to the car industry. Those deliveries have been blocked by striking postal workers in an attempt to force Tesla to sign a collective bargaining agreement for engineers in the country.
Welcome ride
Uber Riders in London will soon be able to hail an iconic black cab into the city. London travelers can now start signing up for Uber ride referrals, but the service won’t launch until early 2024. This isn’t the first Uber partnership with a taxi company, and it won’t be the last.
