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US HOUSE PASSES SELF-DRIVING CAR LEGISLATION: The US House of Representatives unanimously voted to pass the first major piece of federal self-driving car legislation Wednesday that will allow automakers to put far more self-driving cars on the road, Reuters reports. The legislation, which now goes to the Senate for approval, allows automakers to obtain exemptions to put up to 25,000 vehicles on the road that don’t meet federal safety standards. That number will then increase to 100,000 over the next three years.
The exemptions granted through the legislation will allow automakers to deploy far more self-driving cars than current law allows. Right now, the Department of Transportation can grant up to 2,500 vehicle exemptions to any individual automaker. However, current federal safety standards do not permit self-driving cars on public roads, and carmakers have been lobbying Congress to increase the number of exemptions to expand their self-driving projects. Increasing the number of exemptions will allow automakers to vastly expand their self-driving car projects as they race to commercialize autonomous vehicles, possibly allowing them to deploy fleets of self-driving cars to test ride-hailing, car-sharing, and delivery services. To qualify for the new exemptions, automakers have to submit safety assessments to regulators to prove that their self-driving cars are as safe as vehicles currently on the market.
The House legislation also prevents state regulators from banning self-driving cars from their roads. More than 20 US states have already passed their own self-driving car regulations in recent years, creating a muddled hodgepodge of overlapping and sometimes conflicting state rules. Automakers have complained that self-driving regulations in certain states, like California, are too strict. Under the House’s bill, states would still be allowed to set rules regarding registration, liability, licensing, and safety inspection requirements for self-driving cars, but could not set their own performance standards, per Reuters.
Lastly, the bill would make the Department of Transportation’s guidelines for self-driving cars mandatory. The department released the first version of its non-binding guidelines last year, but plans to release an updated version of those guidelines early next week. Compliance with those guidelines would be compulsory if the House bill gets signed into law.
The Senate will now take up the legislation passed by the House, and it seems likely the bill will pass, though possibly with some changes. The Senate has already been working on its own legislation similar to the House bill. Reuters noted that one sticking point might be rules for self-driving commercial trucks, which the Senate is considering and were not included in the House bill. Additionally, consumer advocacy groups have criticised the legislation, saying that it doesn’t set adequate safety standards or provide sufficient resources for the National Highway Traffic Safety Administration (NHTSA) to oversee the expanding number of self-driving vehicles on the road. The NHTSA’s oversight capabilities will likely be a significant issue if it doesn’t receive further resources. The administration currently has no director, and has a shortage in staffing that will need to be addressed in order to conduct wide-ranging field work for overseeing expanded self-driving car tests. Automakers will be relieved if the legislation passes and eliminates the current patchwork of states’ self-driving car rules, but the prospect of vastly expanded self-driving car tests on public roads without proper regulatory oversight could inflame consumers’ scepticism over the safety of self-driving vehicles.
CHINA-BASED BEST LOGISTICS LAUNCHES $US930 MILLION IPO: Best Logistics, a Chinese logistics provider with backing from Alibaba, is seeking to raise around $US930 million from its September 20 initial public offering (IPO) in the US, Reuters reports. The IPO is expected to value Best at up to $US5.7 billion, up from a $US3 billion valuation from its last funding round in 2016.
Alibaba’s backing helped Best grow to capture 8.6% of China’s express delivery market in the six months leading up to June 2017, up from a 2.7% share in 2012, according to Best. Alibaba is Best’s largest shareholder and client — the e-commerce behemoth made up 70% of Best’s express deliveries from January to March 2017. Cainiao Network, Alibaba’s logistics affiliate that coordinates the vast majority of its e-commerce deliveries, also has a 5% stake in Best.
China’s e-commerce boom is fuelling incredible growth in its logistics market, which generated $US1.6 trillion in revenue last year. China’s e-commerce market totaled nearly $US700 billion last year, nearly twice the size of the US e-commerce market. That has created surging demand for express deliveries, which are expected to increase 17.9% annually from 2015-2021, according to consulting firm iResearch. This growth has led to a string of recent IPOs by Chinese logistics firms, including S.F. Holding, YTO Express, STO Express, and, most recently, ZTO Express, which raised $US1.4 billion last October in its US IPO.
Best intends to use part of the funding to fuel its continued geographic expansion. In addition to its nationwide delivery network in China, the company also has warehouses in Japan, South Korea, Australia, the US, and Germany. Best said that $US300 million of the new funding would go to expanding its store network and logistics services, with another $US100 million going to technology investments, and the rest set aside for general business purposes. Continuing to grow its footprint overseas could help Best both increase its business with Alibaba, which is also expanding into other parts of Asia, and attract new clients in foreign markets.
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NISSAN LOOKS TO UNDERCUT TESLA WITH THE NEW LEAF: Nissan unveiled the 2018 Leaf earlier this week, a fully electric hatchback with an optional semi-autonomous highway mode. The vehicle, which starts at $US30,000 for the base model before tax credits, also features a mid-range and high-end model, and a 150-mile battery range — 43 minutes longer than the 2017 Leaf’s range. The optional semi-autonomous features can be purchased as part of a special tech package, priced at $US2,200 for the mid-range model, and $US600 for the high-end model.
The Leaf is Nissan’s effort to undercut Tesla’s new Model 3 sedan. Long known as a luxury automaker, Tesla began delivering the $US35,000 Model 3 sedan earlier this summer to attract more mass market consumers. In response, Nissan has priced the Leaf slightly below the Model 3 in the hopes of peeling off some of those consumers Tesla is eyeing for the first time.
The new Leaf, with its low price tag, positions Nissan well in the electric vehicle market as other automakers start to ramp up their electric vehicle models. Currently, only about 5% of global potential electric vehicle (EV) buyers end up purchasing an electric car, according to McKinsey, and executives at major auto suppliers warn that mainstream adoption will take decades. Pre-orders for Tesla’s Model 3 sedan topped 300,000 only days after it was unveiled, prompting other automakers to announce new EVs and undercut Tesla on price. Volkswagen will release four inexpensive electric vehicles as soon as 2019, and Jaguar Land Rover plans to offer an electric version of all of its models by 2020. Once these vehicles hit the market they could accelerate EV adoption, especially because there’s a lot of untapped potential in the market. With the new Leaf, Nissan is positioning itself as an everyman’s Tesla, giving it a competitive advantage once consumers start to purchase EVs in large numbers. As more mainstream consumers buy these models it will help to accelerate adoption of driver assist and other semi-autonomous systems that are often included in these vehicles, making consumers more comfortable with these new technologies.
In other news…
- French automaker Peugeot is teaming up with autonomous vehicle startup Almotive to test cars with Level 4 autonomy. That means the cars will be able to drive autonomously in almost any scenario without human intervention. The vehicles will be tested on French highways at speeds up to 80 mph, and will be equipped with Almotive’s sensors and computer systems. Hungary-based Almotive aims to build a self-driving software system that any automaker can install on its vehicles, regardless of their design or hardware equipment. Though just announced, the two companies have been partnering since May at a testing site in Hungary. They have no timeline yet for when highway trials will begin. Peugeot is also set to start testing vehicles on public roads in Singapore soon using self-driving software from Boston-based startup nuTonomoy. The company has said that it plans to put cars on the road with limited autonomy next year and fully autonomous cars by 2020.
- Estonian ride-hailing startup Taxify launched in London earlier this week to challenge Uber’s dominance in the UK market. Taxify is offering half-priced trips with no surge pricing until the end of September in an effort to rapidly attract new customers. Once the promotional period ends, the firm says its trips will cost on average 10% less than Uber. Chinese ride-hailing giant Didi Chuxing bought a 12% stake earlier this year in Taxify, which now operates in 19 countries across Europe, Central America, and Africa. As Uber aims to stem losses and steer towards profitability before a potential initial public offering (IPO), it will have to fend off newcomers like Taxify to maintain its large market share in its core western markets like the UK.
- Peer-to-peer car-sharing startup Turo raised $US92 million in Series D funding, and scored a new strategic partnership with German auto giant Daimler, which participated in the funding round, Tech Crunch reports. As part of their agreement, Turo will acquire Daimler’s Croove car-sharing platform in Germany that launched last year. Croove has a similar business model to Turo, allowing car owners to rent their cars on a short-term basis to other users for a fee. Turo will integrate Croove into its own operations to officially launch in Germany in the near future. Liberty Insurance, which insures vehicles rented through Turo’s platform also participated in the funding round. Turo said it will use the new funds towards marketing efforts to attract new users and grow its geographic footprint.
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