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I took a tour this week through several 10Q reports to understand how EV makers like Rivian and Lucid (or the legacy automakers that also sell EVS) feel about the end of one tariff and federal tax credit. These documents load up on legitimate things, but it’s clear that both economic developments are in the minds of their respective executive teams.
Rivian and Lucid have specific and multiple mentions of one big beautiful bill law (OBBBA) in the 10Q risk factor section. OBBBA eliminates certain tax credits for EV buyers and essentially underestimates the zero-emissions regulatory credit market. Tariffs and trade policy risks also make cameo.
Lucid points out that he assesses the impact of OBBBA in 10Q. “If either the company’s supplier, sub-supplier, or partner is experiencing economic distress, bankruptcy or operational disruption, it may not be able to fulfill its obligations or meet the company’s production and quality requirements.” Meanwhile, Libian tries to hit the “half-glass full” tone by noting that there is still a 45x tax credit for domestic battery production.
Ford and GM also mention OBBBA, but both spend a lot of time talking about the potential impact of tariffs. GM says it cannot estimate the economic impact of OBBBA, but it says it is “material and can have a negative impact on the profitability of electric vehicles.”
Here’s an unfortunate upshot (and a potential third punch): New 100% import duties on semiconductor chips could further narrow down automakers. Anyone who paid attention during Covid Pandemic remembers how supply constraints on chips hurt carmakers. Industry experts estimate that modern vehicles contain more than 1,000 (and sometimes more than 3,000) chips. None of these companies want to experience this again.
The question is how they qualify for the exemption. The Trump administration said they would award them to companies that manufacture chips domestically. Automakers usually don’t create chips. This means that all of these companies can rely on domestic suppliers. Of course, this is a TBD scenario, as the administration has a history of changing policies, and has yet to provide details on how to secure this 100% tariffs and exemption.
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The end result is uncertainty and wet blankets for every company.
Little bird
You’d think concerns about the trade war with China and the protection of American technology will discourage Chinese companies from establishing stores in the US, but I’ve recently heard chatter from several birds in the industry that Chinese companies, particularly industries working on autonomous vehicle technology and adjacent technologies, are repairing them in the US. Stay tuned while I dig into this.
Any tips for us? Email Kirsten Korosec at kirsten.korosec@techcrunch.com or send an email to kkorosec.07, sean o’kane (sean.okane@techcrunch.com, or rebecca bellan (rebecca.bellan@techcrunch.com).
Great deal!
Remember Blade, a helicopter ride-sharing business? The city’s air mobility business, which was published through a merger with the Blankcheck company, has enjoyed a significant share and a significant portion of the controversy since its establishment in 2014.
And now it is owned by electric flame developer Joby Aviation. The transaction is worth up to $125 million and includes the blade brand and its passenger business operating in the US and Europe. Blade’s medical division is not included in the transaction and remains a separate company.
Blade founder and CEO Rob Wiesenthal will continue to lead the business, which operates as a wholly owned subsidiary of Joby.
I didn’t expect this transaction exactly, but that certainly makes sense. Blade is seeking partnerships with other electric aircraft companies, including Wisk. Also, once an electric aircraft receives a type of certification from the Federal Aviation Administration, if you want to increase your commercial operations, you will need infrastructure.
The agreement gives you instant access to a network of 12 terminals in major markets like New York City. In particular, it is a dedicated lounge and terminal base on John F. Kennedy International Airport and Newar Liberty International Airport, the west and East Side of Manhattan, and Wall Street.
Other deals that caught my eye this week…
Destinus, a drone startup that supplies weapons to Ukraine, is planning to purchase Daedalean, a Swiss company that develops autopilot systems for aviation. The transaction is reportedly at $223 million in cash and stock.
Jeh Aerospace, an Indian aerospace component manufacturer based in Atlanta, raised $11 million in the Series A round led by Elevation Capital, with participation from General Catalyst.
Uzm, a Uzbekistan-based express food delivery and fintech startup, has raised $65.5 million in a round co-led by China’s Tencent and New York and London-based VR capital with participation from US-based Finsight Ventures.
Notable readings and other information
Foxconn sells its former GM plant (and its surrounding land) for $88 million, and its EV subsidiary machinery and equipment for about $287 million. Reminder: Foxconn has not been able to expand its production of EVs in its factory after three years of ownership. So what will come from this factory? The buyer is reportedly SoftBank, and the plan is to turn the factory into an AI data center.
Lyft has formed a strategic partnership with Baidu to deploy China’s Tech Giant’s Apollo Go self-driving cars in several European markets. The company hopes to launch Robotaxi services in Germany and the UK in 2026.
Libian has filed a lawsuit to allow electric vehicles to be sold directly to Ohio consumers. The company claims that existing laws unfairly benefit Tesla and received a special exemption.
Read this: A stunning, data-rich report on Uber’s sexual assault issues.
Zoox is exempt from federal safety regulators to demonstrate custom-built robotaxi on public roads. There is quite a bit of backstory here, so I recommend reading my article. TL;DR: This clears the long-standing debate on whether Zoox Robotaxis complies with federal vehicle safety standards. It also puts an end to related investigations on whether the Amazon-owned company has circumvented federal regulations.
Tesla’s news cycle will not stop. And for some, it may seem contradictory. The company’s board of directors has approved a new compensation package for CEO Elon Musk worth around $29 billion. The company cites “always enhanced AI talent war and Tesla’s position at a critical inflection point” as a reason for its payment. Meanwhile, Tesla, whose car revenues have fallen, is pushing to turn AI and autonomy ambitions into gold makers.
This week’s two developments lack those aspirations. First, Tesla has closed its Dojo SuperComputer program and has concluded its bid to develop an in-house chip for driverless technology. Separately, the ju judges discovered that Tesla was partially liable for the fatal 2019 crash fall and ordered him to pay approximately $242.5 million in punitive and compensatory damages. This is a prominent case of the plaintiff claiming there is a gap between how Tesla speaks about the autopilot driver assistance system and its actual capabilities. (The Verge has an interesting interview with a lawyer.)
One more
Autonocast, a podcast about the future of transportation that I co-hosted, has recently won some fun guests. Boris Sofman, who heads Waymo’s now shutter-type self-driving truck program and co-founded ANKI Robotics, joined the show to discuss his new autonomous vehicle technology startup Bedrock Robotics. Listen!
