Founders & Funders Share Thoughts on Tariffs
Plus - a new mini-pickup, car registration fees and LAX transit options
I’ve just returned from Miami, where my partners at MobilityVC and I hosted a lovely two-day summit, getting together 100+ top investors and startups.
One thing that was top of mind for just about everyone was the tariffs, and their impacts on the overall market.
For any company with a hardware focus, the biggest issue was of course the uncertainty of it all. With tax rates seemingly changing every other day, and the list of exemptions up for grabs, folks were feeling paralyzed. Where’s the right place to base your production, and how can you forecast your cost structure? Those are two vital questions that require long-term, stable answers…
Almost nobody was optimistic that the tariffs would have the desired effect of reindustrializing America. Our supply chains are too broken, our labor market isn’t right, our cost structure is too high, and even if we do more manufacturing here, most of it will have to be done by machines, not humans. Another common sentiment was that the automotive and mobility segment in China is so advanced — these days you’re seeing super sleek EVs for as little as ~$10k — and that American automakers are so far behind, that all this protectionism will just mean is that our domestic market continues to co-evolve into a little island of its own, dominated by oversized, overpriced trucks. American consumers, the environment, and anyone that cares about road safety loses out big time in that trade.
There was one bright spot for folks building mobility hardware, however. Startups with an international emphasis might actually see their cost structures improve, as the Asian manufacturers suddenly caught with excess capacity will lower prices to keep their plants running. New government subsidies, aimed at helping local factories stay open and pushing into new markets, may bring costs down further. So if you’re trying to build a new vehicle for anywhere in the world that’s not the ol’ U. S. of A., this could actually be your moment.
And then of course there are the pure financial implications of it all, weighing on everyone from just-software startups to investors themselves. With the market oscillating downwards, the IPO window has shut itself firmly closed for the third plus year in a row. While startups are still able to raise money, it’s getting ever harder and slower. The same can be said for VCs looking to fill out new funds; the longer their previous investment returns get pushed out, the more the overall space will continue to languish.
Got thoughts of your own, or a more sanguine read on the situation? I’d love to hear them — send me an email at jonahb@curbivore.co
HOT INDUSTRY NEWS & GOSSIP
Clean slate: A new American automaker just emerged out of stealth; meet Slate Auto, based out of Troy, MI and Long Beach, CA, with backing from Jeff Bezos. The OEM has a promising solution to pickup truck bloat, with its initial vehicle angling for a sub-$20k price tag and a wheelbase closer to a Mini Cooper than an F-150.
SF’s curbs get juicy: Our friends at it’s electric just launched in their latest city, with the company’s sleek curbside chargers going live in San Francisco. “These curbside EV chargers are the first of many, and I want to thank it’s electric for working with us to bring this innovation to our streets. By streamlining our permitting process with the new Emerging Technology Permit, we’re making it faster and easier to deliver clean energy to our communities,” said Mayor Daniel Lurie.
More Curbivore coverage: AV expert Brad Templeton assesses Uber’s robotaxi and delivery bot strategy. And Sergio Avedian has a great behind-the-scenes video for the whole event.
Just like a real city! LA Metro’s long-awaited airport transit center is set to finally open on June 6th, bringing SoCal’s rail network to the nation’s busiest O&D airport. While the in-airport people mover doesn’t open until next year, this will still make travel far more convenient than the famously hellacious road loop… Greater LA will now have 17.4 miles of heavy rail subway, ~96 miles of largely grade-separated light rail, 545.6 miles of commuter rail, and more on the way — none of which existed when I was born; not bad!
The silver app? Uber’s unveiled a new version of its app that’s optimized for senior citizens, including streamlined navigation, bigger on-screen text and a simplified layout. This beats Lyft to the punch, as the rival TNC had announced a similar update was due later this year. The tit-for-tat reminds me a bit of the ride hail war glory days, where the two companies were racing to outcompete each other on features like shared rides.
DoorDash delivers new features: The 3PD is adding new tools to connect merchants and customers, including a much-requested feature that lets the two communicate in real-time over the phone.
New fees for cars? House Republicans are floating a new funding structure for the nation’s transport system, including charging $20 per year for each gas-powered passenger vehicle, upped to $100 for hybrids and $200-250 for EVs. While right-pricing car ownership would help disincentive driving, let’s wait to see if this idea get paired with something more draconian like the entire dissolution of the gas tax.
Efficient transport, efficiently spent: Which transit agencies move the most riders per dollar of operating budget? Somewhat surprisingly, Philly, DC and LA come out on top, besting areas like NYC, Chicago and Boston. The Bay Area’s numbers are particularly bad…
A few good links: Boston begins accepting applications for e-bike rebates. U.S. transit systems face catastrophic $6 billion funding shortfall. Nuvo raises $34M to simplify B2B sourcing and purchasing. Indigo Technologies (you saw their innovative ridehailing and delivery vehicles at Curbivore) closes on $54M in strategic funding, including $$ from FM Capital, FedEx and Foxconn. FEMA denying LA fire disaster victims the apartment coverage it usually provides. What went wrong at Ola Electric? EV subsidies for couriers go live in PDX.
Until next time!
- Jonah Bliss & The Curbivore Crew