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Onto raises $175 million in Series B to expand EV subscription service in the UK

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Onto has raised $175 million in a combined equity and debt Series B round, capital the U.K.-based electric vehicle subscription startup plans to use to expand within the country as well as move into new markets. 

This latest round brings Onto’s total funding to $245 million. Swedish VC Alfvén & Didrikson is leading the round on the equity raise, and British investment company Pollen Street Capital is providing a senior-secured asset-backed debt facility. The company says it plans to double its fleet size every three to six months, and that any new vehicles will be used as collateral. Onto did not disclose how much of the round came from equity versus debt. 

The car-as-a-service company is finding that sweet spot between society’s growing adoration for subscription services and EV adoption driven by legislation. The U.K., like many other countries, is banning internal combustion engine new car sales by 2030, so more people are looking for ways to make the switch to electric.

That shift from gas to electric is accelerating. New registrations of all-electric and plug-in hybrid vehicles had a market share of 10.7% in the UK in 2020, according to the Society of Motor Manufacturers and Traders. That’s up from 6.6% in 2019. The organization noted that battery and plug-in hybrid electric cars together accounted for more than one in 10 registrations, up from around one in 30 in 2019.

Buying a car is often considered one of the worst investments you can make; it’s an asset that both depreciates and costs money the moment a customer buys it through financing. Yet there are millions of new car sales each year in the U.K. With a market size that large, Onto founder and CEO Rob Jolly thinks there’s plenty of room to make the subscriptions business a sustainable and profitable one.  

“Our total cost of ownership is very comparable with having your own car but you don’t have to worry about charging fees or servicing,” Jolly told TechCrunch. “The ballpark cost is £330 (~$450) per month. There’s no upfront deposit, which is huge. What we’re trying to do is remove all the barriers and actually make it easier for people to recognize that having a car on subscription is actually easier and more affordable than having a petrol or diesel car.” 

A brief glance at Onto’s website shows that the £330 ballpark is only accurate for certain cars at the lower range of the company’s fleet of 3,000 vehicles. The middle range could be a Peugeot at £450 (~$622) or a Hyundai at £560 (~$775), and high range could be a Jaguar or Tesla at £1299 (~$1,800).

If we crunch the numbers for leasing a Hyundai Kona, for example, the price is comparable depending on the lease length, which determines the monthly rate. Longer leases tend to have less monthly payments than shorter leases, and different sites have either exceedingly cheap or curiously expensive lease quotes, so let’s settle somewhere in the middle at £384 per month over a three year lease. This would be an annual cost of about £13,824 with a down payment of £3,456. The average cost of insurance for EVs in the U.K. is £2,264. The average person travels 35 miles by personal car per day, and the Hyundai Kona has a range of about 245 miles, so you really only need to fully charge it once a week. The average cost of charging the battery is about £10, so you’re looking at about £520 per year on charging. Maintenance for electric vehicles is minimal and usually included in a lease agreement. Tally it up and you get a number in the ballpark of £20,538 (~$28.304) over three years. At £560 per month, Onto’s service would cost a customer £20,160 (~$27,783) over the same three year period. When factoring in U.K.’s plug-in car grant, you could buy the car for £27,950 (~$38,620). 

Onto’s pricing is certainly comparable to other EV subscription businesses, like Steer in North America. Flux, in San Francisco, is markedly cheaper, offering Teslas for $600 per month, but it doesn’t include the “all-inclusive” services like road tax and insurance that Onto does. Granted, in the U.K., EV owners don’t actually have to pay for road tax.

Among other things Onto says are included in a subscription are home delivery on its vehicles and access to free charging via network partners like BP Pulse, Tesla Supercharger, InstaVolt and as of earlier this year Shell Recharge. The company has partnerships with 10 car brands and rents out 12 different EV models, and is in the process of firming up more automaker partnerships. Jolly wouldn’t share specifics on future partnerships. However, updates to the company’s website, which shows most recent additions of car models to book, suggest Volkswagen and its 2021 e-Up! will be the latest.

Jolly said it might take a while for the masses to catch on to both EVs and subscriptions, but he’s confident that offering customers a white-glove service that can be canceled anytime makes the choice as easy as possible. In fact, Jolly said Onto is very nearly profitable.

Onto’s lead investor, Alfvén & Didrikson (A&D), which usually invests in more SaaS businesses, has a long term investing structure. This has allowed the VC to take bigger bets on businesses like Onto’s that requires large upfront costs, according to Tiyam Afshari, partner at A&D.

“We’re happy to take those bets that we see are transforming an industry,” Afshari told TechCrunch. “Subscription as a form of ownership when it comes to cars is just a no-brainer if you look at all the hassle that comes from owning a car. So we feel quite strongly that the subscription model should and will grow to quite a significant part of the financing industry, and Onto is in a prime position to capitalize on that.”

Given its lead investor’s long term bet on Onto, it’s perceivable that the company might look towards Sweden as it seeks to expand outside the U.K. After all, the Scandinavians have taken to EVs faster than other countries, and another EV subscription service in Norway, imove, recently raised $19 million in a Series A.

For many users, the EV subscription service isn’t just about not having to worry about things like road tax, auto insurance and servicing. It’s about the flexibility of keeping up with the latest EV models. 

“The iPhone has updates every year because the tech is improving and the battery life gets slightly better,” said Jolly. “The same thing is going to happen and already is happening with EVs. We’re seeing that this is car ownership now for millennials. They can swap in for the latest and greatest car when it comes out, even if it’s just a car with 30 miles extra range. And that’s hugely prevalent within our customers.”

For Simon Smith of East Devon, 32, it’s never been about trying out the newest car. He joined Onto’s service in 2019 for ethical and financial reasons, and has found the different iterations of the Renault Zoe ZE40 to suit his needs entirely. 

“It’s still the most affordable way for me to drive electric,” Smith told TechCrunch. “I really wanted to go electric, but there wasn’t any obvious way of doing that or making that happen in 2019, and I would say it’s still fairly limited in the U.K. If you wanted to go electric, you’d probably have to save up a good deal of money even to buy second hand, and then you just wouldn’t have the flexibility.”

Smith says using Onto is a good approach for people who want to try before they buy, as well, which is no doubt at least partly why automakers like Tesla, Hyundai, Jaguar, Audi and Peugeot are interested in partnering up.

“Again, it’s an enormous market, of which we can kind of sit hand-in-hand with the car manufacturers and dealerships and the other aspects where we are one of a number of methods people have of acquiring the car now,” said Jolly.

Existing investors Legal and General, Campden Hill Capital and JamJar also participated in the equity round, alongside new investments from TotalEnergies Ventures, Vlerick Group, Dutch insurer Achmea Innovation Fund and the family office of Jim O’Neill. Lazard acted as financial advisor to Onto.  

This article was updated to reflect new information regarding car leases in the U.K. 

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Source: https://techcrunch.com/2021/07/27/onto-raises-175-million-in-series-b-to-expand-ev-subscription-service-in-the-uk/

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Future Alfa Romeo Models To Have ‘As Few Screens As Possible’

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Electrification is the imminent future of the automotive industry, it’s hard to deny that. However, among the technological developments of automobiles are the increasing screen real-estate in modern cars. In fact, automakers have gone a long way to insert as many screens as possible in new cars. Case in point: the MBUX Hyperscreen found in the new Mercedes EQS flagship EV.

But Alfa Romeo has other plans in mind. In an interview by BFM Business and relayed through a report by French automotive site Caradisiac, new Alfa Romeo CEO Jean-Philippe Imparato drew some insight about the future cars of the Italian marque.

In the said interview, Imparato was quoted saying that he has a very particular positioning for future Alfa Romeo cars. He wanted them to be driver-centric, with only “as few screens as possible” in the car.

“I don’t sell an iPad with a car around it, I sell an Alfa Romeo,” the new CEO added.

As with several automakers these days, the Italian marque is getting for the electric future. Imparato added that future Alfa Romeo cars will have to convey emotions even without the aural pleasure coming from the engine sound.

As to how will that last bit be executed remains to be seen, but we’re counting to see these developments in the upcoming Alfa Romeo vehicles. The sub-Stelvio SUV, the Tonale, is confirmed to be arriving with a plug-in hybrid EV version, which is the first of its kind for the automaker.

Whether the 2022 Tonale will have a small screen real-estate or a rampaging emotional drive even when in full EV mode, our guess is just as good as yours right now. But if you’re a fan of Alfa Romeo, how do you feel about these insights provided by its new CEO? let us know your thoughts below.

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Source: https://www.motor1.com/news/534094/future-alfa-romeo-few-screens/?utm_source=RSS&utm_medium=referral&utm_campaign=RSS-category-technology

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Hyundai’s Robot Dog Now In Service In Kia’s South Korean Plant

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By the last month of 2020, Hyundai made a surprising move. The automaker purchased Boston Dynamics, a company known for its robots. The Korean marque acquired a controlling stake of around 80 percent, sharing the remaining 20 percent from SoftBank Group.

Fast forward to last July, Hyundai showcased its dancing robot dog with its global brand ambassador and worldwide music phenomenon BTS, but we all know that the acquisition of Boston Dynamics isn’t for the sake of entertainment.

This time, Hyundai shows off the Factory Safety Service Robot – its firstborn with Boston Dynamics and created in support of site safety in Kia’s South Korean plant.

If you’ve been watching quite a lot of sci-fi thrillers lately, particularly Black Mirror‘s Metalhead episode, turn away and close this page as this will might remind you of something.

The robotic dog, now to be called the Robot, is based on Boston Dynamics’ quadruped robot called Spot. The technology does come with applied artificial intelligence (AI), autonomous navigation, teleoperation technologies, and computing payload (AI Processing Service Unit). More importantly, the remote-controlled Robot is developed for various industrial tasks, particularly in people detection, high-temperature situations and fire hazards monitoring, and check if a door is closed or open.

Hyundai announces that the Robot will be in service in its Kia’s South Korean factory as a support late-night security patrols and create a safer environment for workers. It’s also a way for Hyundai Group to assess its effectiveness before expanding its operation in parol areas and other tasks in other industrial sites.

“We will also continue to create smart services that detect dangers at industrial sites and help support a safe work environment through continuous collaborations with Boston Dynamics,” said Dong Jin Hyun, Head of Hyundai Motor Group Robotics Lab.

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Source: https://www.motor1.com/news/533973/hyundai-safety-service-robot-dog/?utm_source=RSS&utm_medium=referral&utm_campaign=RSS-category-technology

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Watch A Mini Cooper SE Ride On Michelin Uptis Airless Tires

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According to a study, 20 percent of the tires produced yearly are discarded due to flats and rapid pressure loss or irregular wear and tear caused by poor tire pressure. That’s equivalent to a total of 200 million tires that don’t finish their intended purposes. In other words, that’s a lot of waste in terms of costs, materials, and energy used to make the tires.

That sustainability problem is the main focus of Michelin in creating the Unique Puncture-proof Tire System prototype, also known as Uptis. Officially introduced in 2019 but has a development timeline that goes way back to a decade, the Michelin Uptis is nearing its public launch but here’s a preview while being worn by a Mini Cooper SE, courtesy of YouTube’s Mr. JWW.

In the video, which you can watch at the top of this page, Mr. JWW interviewed Cyrille Roget, Michelin’s Group Technical and Scientific Communication Director. Roget is pretty enthusiastic about the French tire brand’s innovation and shared some insight about the tire’s construction.

According to him, the Uptis is made up of belts and spokes, the latter being made of several thin and strong fiberglass to carry the weight of the vehicle. To protect its invention, Michelin apparently filed 50 patents for its development.

Mr. JWW then had a test drive with the Uptis-fitted Cooper SE, which is kind of a big deal as he’s one of the first outside Michelin to test it on a car. It’s a sublime concept, and we couldn’t help but imagine the product’s public reception once it hits the market in its target launch year in 2024.

Of note, the Michelin Uptis won’t be the first attempt into creating airless tires as a concept but at this rate, it’s highly probable that it will be the first to be offered for public use.

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Source: https://www.motor1.com/news/533968/mini-michelin-uptis-airless-tires/?utm_source=RSS&utm_medium=referral&utm_campaign=RSS-category-technology

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Elon Musk praises Chinese automakers amidst regulatory scrutiny

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An unusually scripted Elon Musk issued conciliatory and complimentary comments to Chinese automakers during a pre-recorded appearance at China’s World New Energy Vehicle Congress, striking a pose that is worlds away from his commentary style in the United States.

“I have a great deal of respect for the many Chinese automakers for driving these [EV and AV] technologies,” he said, the reflection of a ring light just visible in the window over his left shoulder. The entire tableau was enough to make one suspect that there was a crisis communications expert just out of frame, urging him to continue with his prepared remarks.

Then again, perhaps Musk doesn’t need any external coaxing; China is one of the most lucrative markets for electric vehicles in the entire world, accounting for around one-fifth – or $6.66 billion – of Tesla’s overall sales last year, according to regulatory filings.

While the United States continues to be one Tesla’s largest market, the company has aggressively pursued expansion in China, including opening Gigafactory Shanghai in 2019 to manufacture the Model 3 and Model Y. Tesla faces competition from Chinese automakers, including electric car startup Xpeng and the search giant company Baidu.

“My frank observation is that Chinese automobile companies are the most competitive in the world, especially because some are very good at software, and it is software that will most shape the future of the automobile industry, from design to manufacturing and especially autonomous driving,” Musk said in the message.

The company’s entrance into the EV market of the world’s most populous nation was bumpy at first, but Tesla managed to turn it around. Last year, the Tesla Model 3 was the best-selling EV in China. Tesla has also received unprecedented autonomy in the region, especially as it is the only non-Chinese automaker allowed to wholly own its local subsidiary. It’s a fact that Musk’s noted in past public appearances.

“I think something that’s really quite noteworthy here is, Tesla’s the only foreign manufacturer to have a hundred percent owned factory in China,” Musk said during the company’s Battery Day event last year. “This is often not well understood or not appreciated, but to have the only hundred percent owned foreign factory in China is a really big deal, and it’s paying huge dividends.”

But it hasn’t all been roses: the company has faced a flurry of negative media from both consumers and regulators this year, beginning in February when Chinese government officials summoned company executives for a meeting over vehicle safety concerns.  (To which Tesla said, “We sincerely accepted the guidance of government departments and deeply reflected on shortcomings in our business operations.”)

Then, in April, a woman who said she was a Tesla owner protested the company at the Shanghai auto show in April. Bloomberg reported a few months later that Tesla was attempting to build relationships with Chinese social media influencers and auto-industry publications to combat all the bad PR.

In his pre-recorded remarks, Musk also responded to a question on self-driving vehicles and data security, calling it “not only the responsibility of a single company but also the cornerstone of the whole industry development.” This issue is especially sensitive after news emerged that the Chinese military banned drivers from parking their Tesla’s at its facilities. Last month, China released new regulations aimed at bolstering data security in connected automobiles, Tech Wire Asia reported. Tesla and other automakers, including Ford and BMW, moved to establish local data storage centers in China.

“Tesla will work with national authorities in all countries to ensure data security of intelligent and connected vehicles,” he added.

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Source: https://techcrunch.com/2021/09/17/elon-musk-praises-chinese-automakers-amidst-regulatory-scrutiny/

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