Of the many socioeconomic challenges President-elect Joe Biden focused upon during his campaign, the safe use of electric scooters was not a top subject.
Subscribe to the Crunchbase Daily
But nonetheless, there it is, a featured topic in his official platform for modernizing infrastructure and promoting clean energy. His administration will work to help cities and towns “invest in infrastructure for pedestrians, cyclists, and riders of e-scooters and other micro-mobility vehicles.”
Scooters are one of a number of transport-focused topics covered in the document, which lays out initiatives in areas ranging from air travel to car-charging infrastructure and calls for $2 trillion in investment for infrastructure and clean energy.
Post-election, we anticipate more detailed, updated plans on climate and related areas.
But for a teaser of what’s coming, we’ll look here at the original platform. Not surprisingly, it contains several focus areas in transportation that are of particular interest for the tech and startup spheres, including:
- Charging infrastructure: Biden wants to make major public investments in automobile infrastructure—including in 500,000 electric vehicle charging stations.
- Battery tech: The platform plan calls for the federal government to invest $5 billion over five years in battery and energy storage technology. It will focus on accelerating R&D and developing a domestic supply chain for electric vehicles with batteries built by American workers.
- Electric vehicles: The plan calls to “position America to be the global leader in the manufacture of electric vehicles and their input materials and parts.” Biden also hopes to restore the full electric vehicle tax credit to incentivize purchases.
- Transit: The administration wants every American city with 100,000 or more residents to have “high-quality, zero-emissions public transportation options” and to build the world’s “cleanest, fastest and safest” rail system. It will also require new U.S.-built buses to be zero-emissions by 2030.
- Airplanes: Biden wants to incentivize the creation of new, sustainable fuels for airplanes, as well as other changes to aircraft technology, standards and management, with an eye to reducing carbon emissions.
- Smart traffic lights: The platform seeks to deploy more machine-learning optimized traffic lights, aimed at reducing traffic backlogs and improving safety at intersections.
Hmmm. Those sound like things startups are into
There’s a lot of overlap between the Biden platform’s vision and the kinds of things transportation startups and growth-stage companies are doing already.
A Crunchbase search of the largest venture and growth financings for U.S. transportation startups unearthed many in precisely the areas highlighted above. This includes Rivian (electric pickup trucks), Joby Aviation (electric aircraft), Via (smart transit planning), Proterra (zero-emissions buses and battery packs) and Lime (electric scooters). Just those five companies alone have collectively raised more than $8.2 billion.
Battery tech, a particular focus for Biden’s plan, has also been a hot space for VCs. They’ve poured nearly $550 million into the space since last year, per Crunchbase data. A public offering for Romeo Systems, a maker of batteries for electric vehicles, is also imminent.
Electric vehicles and charging are also still generating a fair amount of venture activity, and exits as well. On the charging front, we’ve seen big rounds for Chargepoint, maker of electric charging stations. As for exits, electric vehicle-makers Fisker and Nikola both went public this year, with both sustaining multibillion-dollar market capitalizations.
The Crunchbase dataset even produced one entry in the smart traffic light space: Savari, a developer of software and hardware sensor technologies that connect cars, traffic signals, pedestrians and bicycles.
What does politics have to do with it?
Presidential platforms are more of a wishlist than a to-do list, with chances for enactment reliant on factors, like the composition of Congress, that are beyond the administration’s control.
That said, new startup business plans are kind of the same — full of optimistic plans and hockey stick graphs with dubious likelihood of coming to fruition. It’s less about meeting precise goals than making progress toward them.
So, in analyzing what these plans could mean for the startup sphere, the nitty-gritty details may mean less than the general direction, which looks positive for the transportation startup sphere. Transport-focused founders and investors can expect an administration friendly to their priorities, with greater potential for grant-funded R&D and tax incentives for their customers.
(One caveat to this is autonomous vehicles, among the biggest area for transport venture funding. Neither Democrats nor Republicans have made autonomous vehicles a big part of a national platform. In 2017, the US House of Representatives passed with sweeping bipartisan support the SELF DRIVE Act, aimed at regulating development of autonomous vehicles. But the bill stalled in the Senate, and Congress is planning to try again in 2021.)
At the end of the day, whatever clean transportation legislation and initiatives actually get passed from the Biden platform, we wouldn’t be surprised if it draws a shrug rather than a cheer from investors in the space. That’s because it seems they don’t really care what the president thinks about electric cars or reducing reliance on fossil fuels.
Markets and startup investors, as we’ve noted before, have long been rewarding low-carbon businesses and pushing down valuations of the big fossil fuel producers and consumers.
Take the case of Tesla and ExxonMobil. Immediately following the election of President Donald Trump, a vocal defender of the oil and coal industries, Tesla had roughly one-tenth the valuation of ExxonMobil. Four years later, its market cap is three times that of Exxon. Would Tesla have done better under an administration more vocal about climate change risks? Maybe. But you don’t hear longtime shareholders complaining.
Fisker and Nikola also didn’t seem too concerned about the political climate affecting their ability to garner big valuations. Nor do Romeo and other electric vehicle-related offerings in the public market pipeline.
In sum, money goes where it goes, often regardless of who’s in the Oval Office. However, while the direction seems clear already, it should nonetheless be helpful to have an administration that wants to speed things along.
Illustration: Dom Guzman