Welcome to another edition of The Future of Automotive, with Steve Greenfield, Founder, and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.
We had a couple of interesting items pop up in this week’s news cycle that are worth noting, as they have significance to the big automotive industry trends that we’re tracking and that auto dealers should be paying attention to.
So, let’s dive right in.
More legislation to restrict EVs
First up this week, the Mississippi Senate passed a bill that would restrict the sale of electric cars to being only through franchised dealerships, which would prevent automakers from selling EVs directly to customers in the state.
The bill, which was introduced by Mississippi House Republicans now heads to Republican Governor Tate Reeves, who has not indicated if he will sign it.
The bill sparked debate among Republican lawmakers on the Mississippi Senate floor before passage. Opponents said sales restrictions would interfere with the new-car market, possibly stopping automakers from bringing new jobs to the state, while supporters of the measure said that it would ensure all automakers play by the same rules.
This bill is different from one recently introduced in the Wyoming legislature, which aims to encourage the 100% ban of EV sales in that state by 2035.
Unlike Wyoming, the Mississippi bill does nothing to discourage or ban EV sales, but makes their sale possible only through the traditional franchise dealership model.
We will be watching to see if the bill is signed into law.
Subscription fees
Next up, we got some insight this week as to how vehicles might be produced in anticipation of selling features as monthly subscription fees.
In the past, automakers didn’t install features that they couldn’t charge for. In fact, quite the contrary: there has been an almost maniacal focus to reduce the cost of production and grind the suppliers.
But we are entering a new era, where OEMs envision a world, where a significate proportion of their revenue, and almost all of their profit, will come from the unbundling of vehicle features into monthly subscriptions that consumers will pay for. Automakers are thinking about how vehicles can generate revenue long after they leave the vehicle showroom.
This means we may see more uniformity of production, with vehicles being produced with expensive features that aren’t paid for up front during the initial car sale.
While it will simplify the manufacturing process to build each vehicle with the same set of parts, it costs money to install buttons, switches, knobs, sensors, computers and wiring for optional or nonfunctioning equipment that may or may not get monetized over the lifetime ownership of that vehicle.
This week we got a glimpse into what this future might look like.
Volvo Cars’ new EX90 model is a good example of how automakers are building capability into vehicles that they might someday be able to monetize.
Every EX90 built will come standard with Lidar, even though the software that will enable it to work for autonomous driving won’t be ready when the three-row electric crossover arrives late this year.
And the cost of adding this additional hardware isn’t trivial. The EX90 will come standard with 16 ultrasonic sensors, eight cameras, five radars and the roof-mounted lidar.
I expect a lot of tension in the future as automakers figure out how to configure cars with the goal of maximizing revenue not at time of purchase, but over the lifetime of the vehicle.
So, there you have it. The news cycle continues to deliver noteworthy items that may have a material impact on auto dealers. This continues to shape up to be a very important year that will influence the Future of Automotive for years to come.
Companies To Watch
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly industry Intel Report, which you can subscribe to for free, I showcase a few companies each month, and we take the opportunity here on this segment to share some of those companies each week with you.
Today, we have two companies to watch: Streamline Auto Solutions and Repurpose Energy.
Streamline Auto Solutions
Streamline bridges the gap between dealers, customers, and lenders. Their innovative solution aligns dealer inventory with lending criteria to maximize customer selection and lender programs. Streamline helps manage expectations throughout the entire sales process.
The reason that I love Streamline is that here’s yet another software solution that was borne out of a dealer group, in this case West Herr Automotive up in New York. After building the solution for the group, they decided every dealer in the country should have access to Streamline. Since then, they’ve proven that dealers of any size have measurable success using the Streamline tool.
You can check out Streamline at www.streamline.auto.
Repurpose Energy
Our second company to watch this week is Repurpose Energy.
RePurpose Energy is focused on reusing EV batteries to create reliable, low-cost “second-life” energy storage systems. They maximize the value of these batteries, strengthen the resilience and sustainability of battery supply chains, and support the global transition to renewable energy.
The reason that I love RePurpose Energy is that by the end of this decade, over 150,000 tons of EV batteries will be retired in the United States alone. Repurpose Energy aims to give these batteries a second life.
You can check out Repurpose Energy at www.Repurpose.energy.
So that’s it for this week’s Future of Automotive segment.
If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new DealerFund.
If you’re a dealer who wants to invest in early-stage AutoTech companies that benefit your business, let me know. We are still accepting new investors into the DealerFund.
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And don’t forget to check out my book, The Future of Automotive Retail on Amazon.com.
Thank you for tuning into CBT News for this week’s Future of Automotive segment, and we’ll see you next week!
