Deutsche Bahn (DB) has, provisionally, agreed to sell Arriva Group to I Squared for c$1.69bn, with the deal pencilled in to be completed by 2024. Many bus sector enthusiasts will remember that I Squared tried to buy FirstGroup, last year, however, it was unsuccessful due to the FirstGroup board deeming its offer below market value. However, we believe I Squared will be successful in buying Arriva, as DB has been looking to offload Arriva for quite a while, as it wants to focus on its core (rail) business(es) in Germany. It appears that I Squared will help Arriva accelerate its fleet electrification, as operations under DB have stagnated to a degree. I Squared has been very active in investing in sustainability and it appears this deal will help both parties hit their goals.
The Japan Mobility Show kicks off today, for the first time since 2019, with a particular focus on domestic OEMs showcasing and mapping out their EV transition plan. Japanese OEMs have lagged behind other OEMs in embracing and manufacturing EVs, as battery-electric vehicles only accounted for 1.5% of new car sales in 2022. However, Toyota, Honda and Nissan are expected to unveil their EV concepts at this show. Fascinatingly, there are nearly 500 domestic companies at the show and only 3 foreign OEMs: BYD, Mercedes and BMW. We will cover the key points from the show next week!
TfL has announced it has awarded several bus operators new route contracts that will result in 152 new electric buses to help meet London’s peak vehicle requirement mandate. 76 electric buses will be introduced by Arriva London, Go-Ahead will introduce 49, followed by Stagecoach London with 16 and Abellio with 11. The new route contracts will last for 7 years, with the start date being the beginning of 2024. Accounting for this new tranche of electric buses, there are c1,150 zero-emission buses, which represent just 13% of all the buses in London being zero emissions. Bear in mind, that London (and the UK) is admirably and aggressively scaling up its electric bus fleet, with funding opportunities via ZEBRA 2, and we (e-)champion it!
Toyota and Lexus (EVs) are the latest, in a long line of OEMs, who have announced they will adopt Tesla’s North American Charging Standard (NACS) chargers, starting in 2025. All the major OEMs, such as Ford, Kia and GM, have adopted Tesla’s NACS, leaving VW and Stellantis (of the major OEMs) as the only ones who have not. We agree with the industry conjecture that it is only a matter of time before those 2 aforementioned OEMs also adopt Tesla’s NACS. It is incredible that Tesla has essentially created a monopoly within EV charging infrastructure in the USA.
Wrightbus has announced West Verkehr (a German-based operator) has placed an order for 12 single-decker Kite Hydroliners (hydrogen buses). This is great news for Wrightbus, as this follows on from last week's order of (up to) 60 Kite Hydroliners from Regionalverkehr Köln GmbH (another German bus operator). Bear in mind Germany, arguably, has the best hydrogen refuelling station network in Europe. Wrightbus hopes to build on this momentum and secure more orders from European territories.
The North and Midlands are set to receive £150m in funding as a part of the Bus Service Improvement Plan (BSIP) during 2024/25. This £150m comes from the £1bn bus funding pot that has been created as a result of the HS2 project being downsized. Thus far, West Midlands Combined Authority has been allocated the most with £16.6m, with Rutland County Council receiving the least with £233,000. The Department for Transport (DfT) has stated that the remaining £850m will be allocated to the North and Midlands however so far, no detail has been given as to which local transport authorities will receive what amount. Bear in mind this money has been ringfenced for the North and Midlands, as part of the UK government's Levelling Up plan. Interestingly, the DfT has stated the £150m funding package will support up to 25 million miles of new bus services. The essence of this funding is to create regular, reliable, and cheap(er) bus services.
JLR has officially opened its new £250m EV test facility in Coventry, which will focus on developing electric car drive units. This factory is developing electric drive units for its (electric) Range Rover, Defender, Discovery and Jaguar models. Bear in mind, this is only the start for JLR, as it previously announced will be investing £15bn in its EV division over the next 5 years. Interestingly, this facility will have test rigs for electrical systems, including cold-weather chambers. There are currently around 200 engineers employed at the facility, with another 150 engineering roles to be created in the not-so-distant future. The company has set itself a target of launching 9 EV models by 2030.
Aston Martin has announced it is receiving £9m in funding from the UK Department for Business and Trade. This funding will help accelerate the development of its battery EV platform alongside supporting over 2,5000 jobs. Aston Martin has pencilled in H2 2025 to deliver its first tranche of EVs. This follows on from recent news of Nissan and Envision AESC investing £1bn in Sunderland, £600m investment by BMW to transform the Oxford Mini plant, £380m investment in Halewood by Ford, and £60m in Hertfordshire by Johnson Matthey. Slowly but surely the UK is starting to flesh out its EV supply chain and it is encouraging to see FDI being injected in the UK Automotive sector.
Umicore, a Belgian-based circular materials technology company, has announced it is about to start construction on its $2.1bn cathode factory in Ontario (Canada). The factory is pencilled in to go into commission by 2025 and will scale production by 2026. The factory will focus on cathode active materials (CAM) and precurser-CAM (pCAM) production. The Ontario site was chosen for, predominantly, 2 reasons, firstly it is strategically positioned to supply OEMs in North America and secondly, Umicore will receive c$1bn in federal and provincial financial support from Canada.
Deals
Neo Mobility, a UAE-based last mile logistics EV startup, has raised $10m in a seed round, with Delta Corp, Pyse and angel investors participating. The startup intends to use the capital to hit its (ambitious) fleet size target of 5,000 EVs by 2025. Neo Mobility offers drivers the chance to pursue lease-to-own models alongside leasing its fleet to 3rd party logistics companies. This is a positive sign for the UAE EV market and hopefully, this will help build momentum in the region.