Nidec Completes Acquisition of MS-Graessner GmbH & Co. KG and Its Group Companies

FOR IMMEDIATE RELEASE

Nidec Corporation
Tokyo Stock Exchange code: 6594
Contact:
Masahiro Nagayasu
General Manager
Investor Relations
+81-75-935-6140
ir@nidec.com

Released on September 3, 2018, in Kyoto, Japan

Nidec Completes Acquisition of MS-Graessner GmbH & Co. KG and
Its Group Companies


Nidec Corporation (TSE: 6594; OTC US: NJDCY) (the “Company” or “Nidec”) today announced that the Company has acquired 100% ownership of MS-Graessner GmbH & Co. KG and its group companies (collectively “Graessner”), a privately owned German company group from its owners on August 31, 2018 (the “Transaction”) through Nidec-Shimpo GmbH which is the Germany-based affiliate of Nidec’s subsidiary, Nidec-Shimpo Corporation (“Nidec-Shimpo”). Details are as follows:

1.Outline of Graessner
(1) Company Name: MS-Graessner GmbH & Co. KG and its group companies
(2) Headquarters: Dettenhausen, Baden-Württemberg Germany
(3) Foundation: 1955
(4) Directors: Michael Stadler: CEO, Managing Director
Thomas Merk: COO, Commercial Director
(5) Principal Places of Business:  Germany, Austria
(6) Principal Business: Manufacture and sale of gearboxes
(7) Employees: Approximately 166 (as of January 31,2018)
(8) Financials: Revenue: €21.8 million
Operating Profit: €2.1 million
Net Assets: €15.1 million
Total Assets: €26.2 million
(fiscal year ended December 31, 2017)


2.Purpose of the Transaction and Future Operation
The Company has been actively engaged in manufacture, sales and after-sales services associated with gearboxes through its subsidiary, Nidec-Shimpo.
Nidec-Shimpo’s main line of gearboxes are precision planetary reducersⅰ with a particular strength in the linear type reducers whose input and output shafts are aligned. These lines of products produced by Nidec-Shimpo are currently sold in Asia, mainly in Japan and China and the Americas.
Graessner exhibits a very strong capability in right-angle precision gearboxes whose input and output shafts are arranged at an angle of 90 degrees, particularly in hypoid reducersⅱ. Graessner’s current main market for these products is Europe, mainly Germany.
As a result of the Transaction, Nidec-Shimpo is now capable of offering more comprehensive precision gearbox solutions, both linear and angular types, and leveraging Graessner’s sales network to expand its sales in Europe which offers a large market for planetary gearboxes. In addition, Nidec-Shimpo plans to manufacture its newly developed strain wave gearboxesⅲ for robotic application in Graessner’s German factory and offer its products along with after-sales services to Graessner’s customers serving the robot industry.
Likewise, Graessner can sell its products through Nidec-Shimpo’s sales and after-sales service network in Asia and the Americas. Also, Graessner’s cost performance will be improved by leveraging Nidec-Shimpo’s manufacturing capabilities in Asia. The Company expects the Transaction will offer mutually beneficial opportunities to capture the rapidly growing robotic demand.
Nidec-Shimpo and Graessner have strong brands, high technological capabilities and solid customer bases. The Company believes that its financial strength and global presence will bolster these advantages, which will help the Company achieve the future growth. The Company will continue to serve customers who desire to achieve the highest standards of productivity.

———————————
ⅰ Gearbox with the gearing mechanism where the planetary gears rotate around the center axis at the same time that it revolves around the center gear.
ⅱ Type of spiral bevel gearbox that the gears' axes do not intersect and the gears’ geometry allows contact in multiple teeth allowing higher torque transmission.
ⅲ Gearbox mechanism where the main components are the cam, flexible bearing, flexible gear and internal gear which utilizes the differential movement between the oval flexible gear and the circular internal gear, applied in applications that require small size, light weight and high efficiency such as robotics applications.


3.Effect on Financial Performance for the Current Fiscal Year

The Transaction is expected to have no significant impact on the Company’s consolidated financial performance for the fiscal year ending March 31, 2019. If necessary, the Company will make additional disclosures on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of further details.

Cautionary Statement Concerning Forward-Looking Information

This press release contains forward-looking statements regarding the intent, belief, strategy, plans or expectations of the Nidec Group or other parties. Such forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors, including, but not limited to, the risks to successfully integrating the acquired business with the Nidec Group, the anticipated benefits of the Transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies and changes in business and regulatory environments. The Nidec Group does not undertake any obligation to update the forward-looking statements contained herein or the reasons why actual results could differ from those projected in the forward-looking statements except as may be required by law.

Original Article

Sweden To Test Dynamic Wireless Charging On Island Of Gotland

The Smart Road Gotland consortium won the Swedish Transport Administration (Trafikverket)’s tender for demonstration road system with dynamic wireless power transfer on the island of Gotland.

The project includes retrofitting of 1.6 km (1 mile) out of 4.1 km (2.5 miles) route between the airport and city center of Visby to enable electric cars and truck/buses to operate without charging.

The core technology to be provided by ElectReon, Israeli startup founded in 2013. One of the points of the project is test of the electric truck over varied seasonal conditions.

In theory, embedding dynamic wireless charging system in main roads would enable to significantly decrease the required battery capacity and prices of electric cars, as well as their need for charging points. The drawback s however need to build the infrastructure in roads, retrofit the cars and efficiency, as well as standardization.

Budget of the demonstration project is 116 million SEK (around $12.5 million).

A first-of-its-kind dynamic electric road system will be built in Sweden

Today, the Swedish Transport Administration (Trafikverket) announced the pre-commercial procurement results for the electric road system tender.

The consortium Smart Road Gotland (Gotland GPe Circuit AB as its applicant) won the final round of the tender with the highest evaluation points, despite the much bigger industrial competitors.

Electreon AB (a wholly owned subsidiary of Electreon Wireless) will lead the project’s next phase to provide vital knowledge of the future potential of dynamic wireless mobile power transfer through this demonstration road system.

This public-private initiative, based on Electreon’s leading technology, will be the first in the world to charge inductively both an electric truck and a bus while in full motion.

To enable the mission-critical knowledge transfer to the Swedish Transport Administration, the Smart Road Gotland consortium will deploy a fully functional public shuttle service and test bed through a 1.6 km long electric road as part of the total route of 4.1 km between the airport and city center of Visby on the idyllic island of Gotland, an eco-municipality in the middle of the Baltic Sea.

The electric truck will be test-driven by a professional in varied seasonal conditions to ensure that the system is ready for large-scale projects on highways.

As an integral strategic step towards implementing the Swedish government’s national roadmap for electric road systems, the Smart Road Gotland project will create a vital learning curve for the authority.

Long haul heavy trucks benefit significantly from the Electreon solution since no heavy and costly batteries, nor stops for charging, are needed. This optimal solution enables installation of electric road systems without the environmental impact (benefits are both physical and visual) of a conductive system.

After acquiring relevant ERS demonstration results, the Swedish Transport Administration can evaluate the potential for larger scale electric road investments.

Initially, Gotland GPe Circuit AB (GotlandRing, world’s first sustainable race and test circuit) – with the support of World Ecological Forum (a global crossover sustainability network, a facilitator and enabler of green business and entrepreneurship) started the project in co-operation with Electreon
– ‘For the whole consortium, it’s wonderful news that we have been selected as the top candidate. It is of utmost importance to significantly reduce CO2-emissions within the transport sector. To commence with the heavier transports is logical since the biggest emission improvements can be gained where the usage and tonnage is the highest. The future positive impact could be global.’, comments Alec Arho-Havrén, CEO/Founder Gotland GPe Circuit/GotlandRing and World Ecological Forum.

– ‘We, the Swedish Transport Administration, believe that electric roads are an important contribution to reducing CO2-emissions from heavy transportation. Demonstrating and evaluating new technical solutions for electric routes is one of our most important steps in our long-term plan for a potential rollout of electrified routes on the heavy road network in Sweden.’, says Jan Pettersson, program manager, Trafikverket (The Swedish Transport Administration)

– ‘We are excited that we have been selected to take part in the Swedish government’s ambitious program to examine and implement electric road technology as a solution to electrify heavy trucks on highways. Electreon’s wireless electric road technology makes it possible to electrify truck fleets economically without the need to carry huge batteries and stop for charging and without creating a visual hazard. The selection of Electreon by the Swedish government after careful filtration testifies to the recognition of the potential of the technology to bring the global electrification revolution to the next critical stage of full implementation.’, Oren Ezer, CEO of Electreon, comments.

– ‘It is exciting and positive that Trafikverket wants to see this unique technology and test bed realised on Gotland. It strengthens the image of Gotland as one of the most innovative and climate smart regions in the world.’, says the chairwoman of the regional government, Eva Nypelius (C).

The Smart Road Gotland consortium members include:

  • Electreon AB – a fully owned Swedish subsidiary of Electreon wireless (publicly traded on the Tel Aviv Stock Exchange, a leader in dynamic wireless power transfer technology
  • EiTech – a Swedish subsidiary of Vinci, one of the world’s biggest infrastructure and construction companies
  • RISE RESEARCH INSTITUTES OF SWEDEN – Sweden’s research institute and innovation partner and a leading research institute in the field of electric roads
  • Gotland GPe Circuit AB, Gotland Ring – world’s first sustainable race and test circuit, traffic electrification partner for the vehicle industry
  • World Ecological Forum – a global crossover sustainability network, a facilitator and enabler of green business and entrepreneurship (project initiator)
  • Matters Group – a sustainability consultancy
  • Flygbussarna – a local Swedish public transportation operator owned by TransDev, formerly Veolia TransDev, a French international public transport operator, with operations in 20 countries
  • Swedavia – the Swedish airport authority
  • Dan transport – Israel’s leading bus operator and a strategic investor in Electreon will provide a HIGER E-Bus based on Supercapacitor
  • Hutchinson – a leading French manufacturer will manufacture the underground coils
  • Eco-municipality of Gotland – the most popular tourist destination summer time, an eco region
  • GEAB – utility company, electricity supplier (owned 75% by Vattenfall, 25% by the municipality)

Smart Road Gotland synopsis

  • Technology: Dynamic mobile wireless power transfer, https://www.electreon.com/technology
  • Invisible installation to road users (coils deployed 8 cm under the surface) and activated only when corresponding vehicle drives on top of it
  • Located in Visby, Gotland, the Swedish island in the Baltic Sea, an eco-municipality
  • 1.6 km of the 4.1 km airport route will be electrified
  • Compatible with all types of EVs, including buses, trucks, passenger cars, including self-driving vehicles (a typical passenger car can be equipped with just one 12 kg receptor, heavier vehicles can have more units to optimise charging levels)
  • The main project mission is acquiring knowledge for the Swedish Transport Administration, including demonstrating the environmental and commercial benefits
  • World Ecological Forum and Gotland GPe Circuit AB/GotlandRing initially contacted Electreon (Tel Aviv listed public company) to initiate a demonstration test bed on Gotland, which is now realised thanks to Trafikverket
  • Budget for the public-private project: SEK 116 M

About Electreon
Electreon Wireless is an Israeli publicly traded company developing DWPT (Dynamic wireless power transfer) technology. The technology enables a shared infrastructure that significantly reduced the need to charge vehicles’ batteries during day/overnight and decreases the size of the battery. It can support any type of EV – buses, trucks, and passenger vehicles. It is fully compatible for autonomous and self-driving EVs. Electreon is a global leader in its field because of its deep technological capabilities and focus on making the technology cost effective, durable and efficient.

Smart Energy Road and Traffic System (SERTS) synopsis

  • Smart Energy Road and Traffic System (SERTS), an energy harvesting smart infrastructure, finalist i InfraAwards 2017, testbeds planned on GotlandRing in the future
  • The vision is to enable access to limitless sustainable energy through smart infrastructure development and simultaneously urge the paradigm for e-mobility. Our mission is to develop and commercialise an energy harvesting electric road system, a modular, self healing micro smart grid with wireless, mobile dynamic charging for electric vehicles.
  • Unique combination of solar, thermal, wind, kinetic, and hydraulic energy harvesting technology that provides decentralised and secure energy
  • Innovative infrastructure with options – in road, covered tiling, contoured (roadside) solar panels, can also be combined with existing road
  • Synergetic systems for energy harvesting, capture, storage of 100% renewable energy
  • Enables smart e-mobility on a large scale and solves range anxiety
  • Electreon’s dynamic wireless power transfer is an important planned feature for the SERTS

GotlandRing/Gotland GPe Circuit AB synopsis

  • World’s first sustainable race and test circuit, traffic electrification and new model launch partner for the vehicle industry
  • Located in a former limestone quarry
  • Green business campus and eco resort development area
  • About to enter an expansion phase making it the longest modern standard race circuit in the world

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Hyundai • Kia Invest Additional US$250 Million in Grab

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  • Grab, Hyundai and Kia will create a Southeast Asia-wide electric vehicle (EV) partnership aimed at driving the adoption of EVs in the region
  • Hyundai Motor Group’s automotive affiliates Hyundai and Kia join Grab’s current financing round, which has raised US$2.7 billion to date
  • Hyundai Motor Group is committed to promoting zero-emission mobility services in Southeast Asia

Hyundai Motor Group and Grab Holdings Inc. (Grab), Southeast Asia’s leading O2O (online to offline) mobile platform, today announced an agreement under which Hyundai Motor Company (“Hyundai”) and Kia Motors Corporation (“Kia”) will invest an additional US$250 million into Grab and establish a partnership to pilot EV programs across Southeast Asia. Under the EV partnership, Grab and the Hyundai Motor Group affiliates will bring together stakeholders from the EV industry to collaborate on measures to improve EV adoption and awareness in Southeast Asia. “As home to one of the world’s fastest growing consumer hubs, Southeast Asia is a huge emerging market for EVs,” said Dr. Youngcho Chi, Hyundai Motor Group’s Chief Innovation Officer and head of Strategy & Technology Division. “With its unparalleled footprint across the region, and an ever-expanding base of customers and merchants, Grab is an invaluable partner that will help accelerate the adoption of electric vehicles in Southeast Asia.” To start, Grab, Hyundai and Kia will launch a series of EV pilot projects in Southeast Asia starting with Singapore in 2019. The pilot projects will focus on utilizing EVs to maximize cost efficiencies for Grab’s driver-partners. The EV partnership will also work with regional stakeholders including governments and infrastructure players to improve EV infrastructure in the region, such as the building of a network of quick-charge stations. The EV partnership will also explore the development of customized maintenance packages to Grab EV drivers and conduct research into how EVs can be most efficiently deployed in Southeast Asia under hot and humid climate conditions. “As the largest fleet owner of EVs in Singapore, we are excited to establish an industry partnership with Hyundai Motor Group to drive EV adoption across Southeast Asia. We both share a common vision on the electrification of mobility as one of the key foundations for building an environmentally sustainable and lowest-cost transportation platform,” said Ming Maa, President of Grab. The three companies will also explore how to customize EVs to optimize them for mobility service platforms. The additional investment builds on Grab’s existing strategic partnership with Hyundai and brings Grab’s current fundraising to US$2.7 billion raised. Grab is on track to raise over US$3 billion by the end of this year. Investors in Grab’s current financing round include Booking Holdings, Microsoft, Toyota, and global financial institutions such as OppenheimerFunds, Goldman Sachs Investment Partners, and Citi Ventures. Hyundai first invested in Grab in January, and the two companies began exploring collaborations in the EV sector. Grab’s latest initiative, which expands its cooperation with the Korean automotive group to include Kia, is a milestone in the company’s continuing efforts to promote the use of EVs in Southeast Asia. In August, Grab announced a partnership with Singapore’s energy utilities provider, SP Group, to use SP Group’s public EV charging network for its EVs. With a commitment to driving innovation that will enhance its foothold in the future mobility market, Hyundai and Kia have been making significant strategic investments in promising start-ups. From technologies such as autonomous driving and artificial intelligence, to ride-sharing and things in-between, Hyundai Motor Group is building a network of industry experts that will contribute to enhancing people’s lives through the development of innovative mobility services. In line with its goal of becoming a leader in clean mobility, the Group also plans to develop more than double the number of its eco-friendly models to 38 by 2025. Grab is one of the most frequently used mobile O2O platforms in Southeast Asia, providing everyday services that matter most to consumers. Today, the Grab app has been downloaded onto over 125 million mobile devices, giving users access to over 8 million drivers, merchants and agents. Grab has the region’s largest land transportation fleet and has completed over 2.5 billion rides since its founding in 2012. Grab offers the widest range of on-demand transport services in the region, in addition to food and package delivery services, across 235 cities in eight countries. Photo Credit: Bloomberg New Economy Forum

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Original Article

Toyota, SoftBank, Denso Invest $1B in Uber Autonomous Car Unit – Interesting Engineering

Toyota, Denso, and the SoftBank Vision Fund announced this week that they have finalized a deal to invest a combined $1 billion in Uber’s autonomous vehicle spin-off, Uber’s Advanced Technologies Group.

Major Investment in Uber’s Autonomous Vehicle Network

In a joint announcement this week, Toyota, auto parts manufacturer Denso, and the SoftBank Vision Fund (SoftBank VF) announced, along with Uber, a $1 billion combined investment by the firms into Uber’s Advanced Technologies Group (Uber ATG), the culmination of a deal several months in the making.

Uber ATG, a new corporate entity spun-off of Uber, is being set up to accelerate the development, deployment, and commercialization of automated ride-share services. According to the announcement, Toyota and Denso will invest a combined $667 million—no further breakdown was given—while the SoftBank VF will invest another $333 million.

RELATED: ELON MUSK’S UBER COMPETITOR: FULLY AUTONOMOUS TESLA CARS WILL PAY FOR THEMSELVES

Uber recieved an earlier $500 million investment from Toyota back in 2018 and Toyota is also set to supply Uber with a version Toyota’s Sienna minivan, purposefully modified for autonomous ride-sharing service, starting in 2021. Today’s announcement emphasizes the combined power of Uber’s self-driving technology and the Toyota Guardian safety support system.

Toyota also said that they plan on investing an additional $300 million over the next three years to help support the deployment effort of mass market autonomous ride-share vehicles not just for Uber but for the industry overall.

“This investment and our strong partnership with the Toyota Group are a testament to the incredible work of our ATG team to date, and the exciting future ahead for this important project, alongside great partners,” said Uber CEO, Dara Khosrowshahi.

“The development of automated driving technology will transform transportation as we know it, making our streets safer and our cities more livable. Today’s announcement, along with our ongoing OEM and supplier relationships, will help maintain Uber’s position at the forefront of that transformation.”

Toyota Going in Heavy on Self-Driving Technology

Toyota has already made significant investments in autonomous vehicle technology in recent years, and not just with Uber. The Toyota Guardian advanced driver support system is an automated system, similar to Tesla’s Autopilot, that features active monitoring of the surrounding environment in order to respond to detected threats and automatically move the vehicle out of harms way.

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“Toyota is dedicated to realizing a safe and secure future mobility society,” said Shigeki Tomoyama, executive vice president of Toyota and president of Toyota’s in-house Connected Company. “Leveraging the strengths of Uber ATG’s autonomous vehicle technology and service network and the Toyota Group’s vehicle control system technology, mass-production capability, and advanced safety support systems, such as Toyota Guardian™, will enable us to commercialize safer, lower cost automated ridesharing vehicles and services.”

While the Toyota Guardian is currently a driver assistance system as opposed to a fully autonomous, point-to-point self-driving system, Toyota is hoping that the Toyota Guardian system will eventually build into a fully autonomous vehicle system capable of complete point-to-point self-driving in the next several years.

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Data collected from Uber ATG’s fleet of ride-share vehicles about traffic patterns, navigation, and mapping will no doubt prove invaluable in the effort to build a truly autonomous vehicle system, a process that will require an enormous amount of driving data from real world scenarios and not just simulations and closed course road tests.

It would not be surprising if Toyota’s investments in Uber and Uber ATG were simply to generate this data for their own research and development, since a cumulative investment of just over a billion dollars in 4 years isn’t a high price to pay for one of the world’s top automakers if it enables it to develop and deploy the safest possible autonomous vehicle they can, while also sharing their technology with out companies who want to improve the safety of their autonomous systems.

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While the gesture might be out of genuine concern for the safety of the riding public—and there’s no reason to suggest that it is not—it’s an inescapable fact that the safety of autonomous vehicles starting on day one is not just important, the entire automotive industry is depending on it.

Autonomous Vehicle Roll-Out Will Be the Mother of All Highwire Acts

Fully autonomous vehicles are currently undergoing various public road testing and have yet to see widespread deployment, and as Uber’s own experience with a self-driving car accident that resulted in a fatality, accidents can potentially set the entire industry back even if they occur at a lower rate than with human drivers. Perception is everything, and since testing has been limited in terms of passenger miles out of necessity, it is impossible to realistically compare data point to data point.

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The general public as a whole distrusts autonomous vehicles and are skeptical of their safety, even when there is strong reason to believe otherwise: 90 percent of all vehicle crashes are the result of human error, including most of the crashes involving automated vehicles. Despite this, spectacular accidents can easily serve as the predicate for a skeptical public and nervous regulators to just call off the whole autonomous vehicle thing off until the “technology improves”.

With the potential for millions of future customers who have never purchased an autonomous vehicle before being up for grabs, assuming you could convince them to purchase one at all, the roll-out of autonomous vehicles has all the makings of a furious commercial scrum with little margin for error. Companies will be forced to compete in what would will be an almost entirely new market; no one has really purchased an autonomous vehicle yet, and no resale market for autonomous vehicles exists and won’t for many years, so manufacturers are the only supplier. Buyers will still have a lot of options to choose from if they’re looking to buy, however, so even though the market is fairly exclusive, it’s also packed with possibly dozens of companies big and small who may be marketing autonomous vehicles.

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This is the kind of environment where corners can easily be cut to outmaneuver a rival. A single shoddily programmed vehicle in a rush to get it to market has the potential for calamity on the roads, and if accidents and fatalities result from a few bad actors in the industry, the guilt in the public imagination will be collectively placed on the industry as a whole. It itsn’t hard to imagine skeptical commentators arguing that automakers “rushed” the deployment of these vehicles before “the technology was ready”. It wouldn’t be the first time that the bad behavior of a few companies in an industry nearly destroyed the market for a new technology.

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Managing the successful roll-out of a technology that is widely distrusted by the very public you are hoping to sell it to is probably the single greatest anxiety in the industry right now. There’s a reason why Toyota announced today that they were setting aside $300 million over the next three years to help the industry prepare for this transition to mass market use of autonomous vehicles. The amount of resources invested into this technology by thousands of companies around the world has been enormous, so this roll-out period could be a make or break moment for a whole lot of companies.

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Uber Raises More Funding for Its Driverless Vehicle Program – Observer

Uber is pivoting its driverless cars program into its own company.

Uber is pivoting its driverless cars program into its own company. Jeff Swensen/Getty Images

Despite expectations being brought down to reality across the industry, Uber is still determined to bring driverless cars to the masses.

The ride hailing company has been on a fundraising spree, raising two different $1 billion rounds for its automated vehicles research program. The latest round comes courtesy of SoftBank, Toyota and Denso, and it comes just a month after Uber raised another billion dollars from SoftBank’s Vision Fund.

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The soon-to-go-public company plans to divest its driverless program into its own unit, so it makes sense to seek massive funding from one of its biggest investors, SoftBank. Uber’s Advanced Technologies Group (ATG), which is the program that operates the company’s self-driving car development, will now run as its own subsidiary.

The billion-dollar round was officially confirmed by Uber CEO Dara Khosrowshahi in a tweet.

Uber could not be reached for comment on what the new funding round means for the company ahead of its IPO.

The push to spin out its autonomous vehicle program comes at a time when Uber is preparing to go public amid massive amounts of annual net losses, with ATG being a major contributing cost. While ATG will still be owned by its parent company once it ventures out, the breakup into two companies could help Uber manage its AV investment better.

This news also comes at the heels of the tech and auto industries’ grim prospects of hitting the road anytime soon. In fact, the military is likely to get driverless vehicles before Uber customers do. As we previously reported this month, Uber’s chief scientist Raquel Urtasun predicted that the widespread use of self-driving cars is probably still decades away, pending regulations and other infrastructure factors.

On a similar note, this month, Ford CEO Jim Hackett also announced plans to scale back the automaker’s driverless technology research, citing that the company had “overestimated” their hype.

Uber’s plans to allow ATG to take the reins of bringing self-driving cars to customers is set to go through later this year.

Uber Raises More Funding for Its Driverless Vehicle Program
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Uber’s Greater Clarity on Costs Not Reassuring – The Wall Street Journal

Forget net profits—in some markets, Uber is starting in a hole, paying more to drivers to complete a trip than the customer pays for the ride.

The ride-hailing company’s initial public offering document is the latest window into goodies it offers drivers to keep their wheels turning. Its accounting methods vary from rival Lyft, but both companies could make things clearer for investors.

In…

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Uber’s self-driving cars are still a ‘science experiment,’ report says – Mashable

Uber's self-driving cars still aren't reliable.
Uber’s self-driving cars still aren’t reliable.
Image: jOSH EDELSON/  AFP / Getty Images

Uber’s self-driving cars still aren’t very reliable, apparently.

Business Insider reports that Uber’s self-driving tech is still far behind competitors like Waymo. The report, which cites interviews with employees in Uber’s Advanced Technologies Group (ATG), compares the self-driving cars project to a “science experiment,” and says that the cars “perform reliably only on limited well-mapped routes, and aren’t making much progress on handling more.”

That may sound like a harsh assessment, but as BI points out, Uber has had other priorities besides autonomous driving alone. Since the company resumed testing its self-driving cars in December following a fatal accident in Arizona, Uber has been progressing much more slowly. It’s possible the cautious approach is frustrating to some employees, who may want to see more rapid improvements in the underlying technology rather than safety-related updates alone. 

Something else that might be causing some strain internally: lack of involvement from Uber CEO Dara Khosrowshahi whose approach to ATG is reportedly seen by some as too hands-off. 

At the same time, Business Insider notes that engineers in Uber’s ATG division are highly paid, with senior engineers pulling in as much as $400,000 a year. With pay like that, there’s little incentive to complain too loudly, as many employees hope Uber’s imminent IPO could make them even more money once the company’s stock begins trading publicly.

Still, if Uber’s self-driving cars really are that far behind, it should be a cause for concern. Uber is still very far from being a profitable company, something that self-driving cars could help change. (Unlike pesky human drivers, self-driving cars don’t need to be paid or be classified as employees.) But even Uber isn’t totally sure whether its self-driving cars will ever be viable. As the company noted in its IPO filing, the tech is “inherently risky” and may never come to fruition. 

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GM’s Cruise is preparing for a self-driving future in the cloud – VentureBeat

According to marketing firm ABI, as many as 8 million driverless cars will be added to the road in 2025. Meanwhile, Research and Markets is predicting that in the U.S. alone, there will be some 20 million autonomous cars in operation by 2030.

How realistic are those numbers?

If you ask Adrian Macneil, not especially. And he should know — he’s the director of engineering at Cruise, the self-driving startup that General Motors acquired for nearly $1 billion in 2016. “I think the best way that I’ve heard this described [is], the entire industry is basically in a race to the starting line,” Macneil told VentureBeat in a phone interview. “The penetration of driving the majority of miles with autonomous miles isn’t going to happen overnight.”

Cruise is considered a pack leader in a global market that’s anticipated to hit revenue of $173.15 billion by 2023. Although it hasn’t yet launched a driverless taxi service (unlike competitors Waymo, Yandex, and Drive.ai) or sold cars to customers, it’s driven more miles than most — around 450,000 in California last year, according to a report it filed with the state’s Department of Motor Vehicles. That’s behind only Waymo, which drove 1.2 million miles. Moreover, it’s repeatedly promised to launch a commercial service this year that would feature as many as 2,600 driverless cars without steering wheels, brake pedals, and accelerators.

But it’s been a long and winding path for Cruise since its humble beginnings five years ago, to put it mildly. To get a sense of how far Cruise has come and where it’s going, we spoke with Macneil about Cruise’s ongoing efforts to train cars synthetically, why the company is targeting San Francisco as one of several potential launch cities, and how Cruise fits into the broader self-driving landscape.

Rapid growth

Cruise Automation chief technology officer Kyle Vogt — who held the role of CEO until January, when former GM president Dan Ammann took over — cofounded Cruise with Dan Kan in 2013. Vogt, an MIT computer science graduate and a founding employee of Justin.tv (which became Twitch), started a number of companies prior to Cruise, including Socialcam, a mobile social video app that was acquired by Autodesk for $60 million in 2012. (Amazon purchased Twitch in 2016 for $970 million.)

Vogt can trace his passion for robotics back to childhood. By age 14, he built a Power Wheels car that could drive using computer vision. And while an undergraduate at MIT, he competed with a team in the 2004 Defense Advanced Research Projects Agency (DARPA) Grand Challenge, a $1 million competition to develop a car that could autonomously navigate a route from Barstow, California to Primm, Nevada.

Above: GM: Fourth generation vehicle, the Cruise AV.

Roughly a year after Cruise joined Y Combinator, Vogt teamed up with Dan Kan — the younger brother of Justin.tv’s Justin Kan — and it wasn’t long before they and a small team of engineers had a prototype: the RP-1. The $10,000 direct-to-consumer aftermarket kit retrofitted the Audi A4 and S4 with highway self-driving features (much like the open source stack developed by George Hotz’s Comma.ai), with the goal of supporting additional vehicles down the line.

But at a certain point, they decided to pivot toward building a more ambitious platform that could conquer city driving. Cruise announced in January 2014 that it would abandon the RP-1 in favor of a system built on top of the Nissan Leaf, and in June 2015, it received a permit to test its tech from the California Department of Motor Vehicles.

GM acquired Cruise shortly afterward, in March 2016. Back then, Cruise had roughly 40 employees, a number that quickly ballooned to 100. Cruise had 200 as of June 2017, and it plans to hire over 2,000 new workers — double its current workforce — by 2021.

Growth hasn’t slowed in the intervening months. In May 2018, Cruise — which remains an independent division within GM — announced that SoftBank’s Vision Fund would invest $2.25 billion in the company, along with another $1.1 billion from GM itself. And in October 2018, Honda pledged $750 million, to be followed by another $2 billion in the next 12 years. Today, Cruise has an estimated valuation of $14.6 billion, and the company recently expanded to a larger office in San Francisco and committed to opening an engineering hub in Seattle.

Along the way, Cruise acquired Zippy.ai, a startup developing autonomous robots for last-mile grocery and package delivery, and more recently snatched up Strobe, a provider of “chip-scale” lidar technology. Cruise says that the latter’s hardware will enable it to reduce the cost of each sensor on its self-driving cars by 99%.

Simulating cities

Cruise runs lots of simulations across its suite of internal tools — about 200,000 hours of compute jobs each day in Google Cloud Platform — one of which is an end-to-end, three-dimensional Unreal Engine environment that Cruise employees call “The Matrix.” Macneil says it enables engineers to build any kind of situation they’re able to dream up, and to synthesize sensor inputs like camera footage and radar feeds to autonomous virtual cars.

According to Macneil, Cruise spins up 30,000 instances daily, each of which loops through a single drive’s worth of scenarios. It’s basically like having 30,000 virtual cars driving around in parallel, he explained, and it’s a bit like Waymo’s Carcraft and the browser-based framework used by Uber’s Advanced Technology Group.

Above: Dan Ammann (right), former president of General Motors, with cofounders of Cruise Automation, Kyle Vogt (center) and Dan Kan.

Image Credit: GM

“[The Matrix] is really good for understanding how the entire car behaves [and] also how it behaves in situations that we would not encounter frequently in the real world,” said Macneil. “So if we want to find out what happens, say, if a small object jumps in front of a car or something, we can create those kinds of simulations and reliably reproduce them. If every time you have a software release you deploy to the car and then go out and drive 100,000 or 1,000,000 miles, you’re going to be waiting quite a long time for feedback.”

Another testing approach Cruise employs is replay, which involves extracting real-world sensor data, playing it back against the car’s software, and comparing the performance with human-labeled ground truth data. Yet another is a planning simulation, which lets Cruise create up to hundreds of thousands of variations of a scenario by tweaking variables like the speed of oncoming cars and the space between them.

“We understand how, for example, if we take an updated version of the codebase and play back a construction zone, we can actually compare the results … We can really drill down to a really deep level and understand what our car’s behavior will be,” Macneil said. “If we take something like an unprotected left turn, which is a pretty complicated situation … we can [see how changes] affect how quickly our cars are able to identify [gaps between cars] and whether they choose to take that gap or not.”

Cruise doesn’t measure the number of simulated miles it’s driven, and that’s a conscious decision — Macneil says they prefer to place emphasis on the “quality” of miles rather than the total. “We think more about how the tests that are running hundreds of times a day [are covering a] range of scenarios,” he said. “It’s about more than just racking up a lot of miles — it’s about the exposure to different environments that you’re getting from those miles.”

But while its training data remains closely guarded, some of Cruise’s libraries and tools have begun to trickle into open source. In February, it released Worldview, a graphics stack of 2D and 3D scenes with accompanying mouse and movement controls, click interaction, and a suite of built-in commands. In the coming weeks, it will publish a full-featured visualization tool that’ll allow developers to drill into real-world and simulation data to better understand how autonomous systems — whether cars or robots — respond in certain situations.

Cruise control

In the real world, Cruise uses third-generation Chevrolet Bolt all-electric cars equipped with lidar sensors from Velodyne, as well as radar sensors, video cameras, fault-tolerant electrical and actuation systems, and computers running proprietary control algorithms engineered by Cruise. They also sport in-vehicle displays that show information about upcoming turns, merges, traffic light status, and other information, as well as brief explanations of pauses. Most are assembled in a billion-dollar Lake Orion, Michigan plant (in which GM further invested $300 million last month) that’s staffed by 1,000 people and hundreds of robots.

Cruise is testing them in Scottsdale, Arizona and the metropolitan Detroit area, with the bulk of deployment concentrated in San Francisco. It’s scaled up rapidly, growing its starting fleet of 30 driverless vehicles to about 130 by June 2017. Cruise hasn’t disclosed the exact total publicly, but the company has 180 self-driving cars registered with California’s DMV, and three years ago, documents obtained by IEEE Spectrum suggested the company planned to deploy as many as 300 test cars around the country.

GM Cruise

Above: Cruise’s Worldview platform.

Image Credit: GM

Currently, Cruise operates an employees-only ride-hailing program in San Francisco called Cruise Anywhere that allows the lucky few who make it beyond the waitlist to use an app to get around all mapped areas of the city where its fleet operates. The Wall Street Journal reported that Cruise and GM hope to put self-driving taxis into usage tests with ride-sharing company Lyft, with the eventual goal of creating an on-demand network of driverless cars.

Building on the progress it’s made so far, Cruise earlier this year announced a partnership with DoorDash to pilot food and grocery delivery in San Francisco this year for select customers. And it’s making progress toward its fourth-generation car, which features automatic doors, rear seat airbags, and other redundant systems, and it lacks a steering wheel.

Testing and safety

Why the focus on San Francisco? Cruise argues that in densely populated cities, difficult maneuvers (like crossing into multiple lanes of oncoming traffic) happen quite often. Moreover, it points out that San Francisco offers more people, cars, and cyclists to contend with — about 17,246 people per square mile, or five times greater density than in Phoenix.

“Testing in the hardest places first means we’ll get to scale faster than starting with the easier ones,” Vogt explained in a blog post. “Based on our experience, every minute of testing in San Francisco is about as valuable as an hour of testing in the suburbs.”

For instance, Cruise’s Bolts encounter emergency vehicles almost 47 times as frequently in San Francisco as in more suburban environments like Scottsdale and Phoenix, and road construction 39 times more often, cyclists 16 times as often, and pedestrians 32 times as often. They’ve navigated in and around six-way intersections with flashing red lights in all directions and people moving pallets through the street of Chinatown, not to mention bicyclists who cut into traffic without the right of way and construction zones delineated by cones or flares.

“Just driving along in a stretch of road, whether it’s in the real world or in simulation, is not going to give you a huge amount of data,” said Macneil. “One of the reasons why we exist in San Francisco is because we encounter pedestrians, cyclists, construction zones, emergency medical, and all of these things just way more [often] … It’s critically important that we’re testing our cars and combing our real-world driving with our simulations, and with both of those looking to get a lot of coverage of what type of situations they’re encountering.”

The data seems to bear out that assertion. Last year, Cruise logged 5,205 miles between disengagements (instances when a safety driver intervened) in California, a substantial improvement over 2017’s 1,254 miles per disengagement.

Here’s how its average of 0.19 disengagements per 1,000 miles compared with others:

  • Waymo: 0.09 disengagements per 1,000 miles
  • Zoox: 0.50 disengagements per 1,000 miles
  • Nuro: 0.97 disengagements per 1,000 miles
  • Pony.ai: 0.98 disengagements per 1,000 miles

Assuming Cruise’s tech works as promised, it could be a godsend for the millions of people who risk their lives every time they step into a car. About 94% of car crashes are caused by human error, and in 2016, the top three causes of traffic fatalities were distracted driving, drunk driving, and speeding.

But will it be enough to convince a skeptical public?

Three separate studies last summer — by the Brookings Institution, think tank HNTB, and the Advocates for Highway and Auto Safety (AHAS) — found that a majority of people aren’t convinced of driverless cars’ safety. More than 60% said they were “not inclined” to ride in self-driving cars, almost 70% expressed “concerns” about sharing the road with them, and 59% expected that self-driving cars will be “no safer” than human-controlled cars.

GM Cruise

They have their reasons. In March 2018, Uber suspended testing of its autonomous Volvo XC90 fleet after one of its cars struck and killed a pedestrian in Tempe, Arizona. Separately, Tesla’s Autopilot driver-assistance system has been blamed for a number of fender benders, including one in which a Tesla Model S collided with a parked Culver City fire truck. (Tesla temporarily stopped offering “full self-driving capability” on select new models in early October 2018.)

The Rand Corporation estimates that autonomous cars will have to rack up 11 billion miles before we’ll have reliable statistics on their safety — far more than the roughly 2 million miles the dozens of companies testing self-driving cars in California logged last year. For his part, Macneil believes we’re years away from fully autonomous cars that can drive in most cities without human intervention, and he says that even when the industry does reach that point, it’ll be the first of many iterations to come.

“When you put the rates of improvement at the macro scale and you look at the entire industry, once we get the full self-driving cars on the road that have no safety driver in them and serving passengers, that’s just the first version, right?” he said. “There’s still an endless array of different weather conditions to handle, and different speeds, different situations, long-distance driving, and driving in snow and rain.”

Competition and unexpected detours

For all of its successes so far, Cruise has had its fair share of setbacks.

It backtracked on plans to test a fleet of cars in a five-mile square section in Manhattan, and despite public assurances that its commercial driverless taxi service remains on track, it’s declined to provide timelines and launch sites.

In more disappointing news for Cruise, the firm drove less than 450,000 collective miles all of last year in California, falling far short of its projected one million miles a month. (Cruise claims that the initial target was based on “expanding [its] resources equally across all of [its] testing locations,” and says that it’s instead chosen to prioritize its resources in complex urban environments.) For the sake of comparison, Alphabet’s Waymo, which was founded about four years before Cruise, has logged more than 10 million autonomous miles to date.

In a report last year citing sources “with direct knowledge of Cruise’s technology,” The Information alleged that Cruise’s San Francisco vehicles are still repeatedly involved in accidents or near-accidents and that it’s likely a decade before they come into wide use in major cities. Anecdotally, one VentureBeat reporter experienced a close call while crossing the road in front of a Cruise test vehicle in San Francisco.

Then, there’s the competition to consider.

Cruise faces the likes of Ike and Ford, the latter of which is collaborating with Postmates to deliver items from Walmart stores in Miami-Dade County, Florida. There’s also TuSimple, a three-year-old autonomous truck company with autonomous vehicles operating in Arizona, California, and China, as well as venture-backed Swedish driverless car company Einride. Meanwhile, Paz Eshel and former Uber and Otto engineer Don Burnette recently secured $40 million for startup Kodiak Robotics. That’s not to mention Embark, which integrates its self-driving systems into Peterbilt semis (and which launched a pilot with Amazon to haul cargo), as well as Tesla, Aptiv, May Mobility, Pronto.ai, Aurora, NuTonomy, Optimus Ride, Daimler, and Baidu, to name a few others.

Vogt believes that Cruise’s advantage lies in its distributed real-world and simulated training process, which he claims will enable it to launch in multiple cities simultaneously. In a GM investor meeting last year, Vogt conceded that the cars might not match human drivers in terms of capability — at least not at first. But he said that they should quickly catch up and then surpass them.

“Building a new vehicle that has an incredible user experience, optimal operational parameters, and efficient use of space is the ultimate engineering challenge,” he wrote in a recent Medium post. “We’re always looking for ways to accelerate the deployment of self-driving technology, since it’s inherently good in many different ways … We’re going to do this right.”

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4 of 11 Tesla board members to step down by 2020

In November 2018, Musk was replaced by Robyn Denholm as the chairperson of the company's board.
In November 2018, Musk was replaced by Robyn Denholm as the chairperson of the company’s board.

San Francisco: In a move that is likely to weaken the powers of Electric Vehicle (EV) maker Tesla Founder Elon Musk and cut some of his strongest allies from the board of directors, the company has said that four of its 11-member board would step down by 2020, thus shrinking the board’s size by more than a third.

The EV maker reportedly said two directors plan to leave its board in June and two more intend to step down next year as part of a move to improve corporate governance of the electric car company.

“Brad Buss, a member of the board since 2009, and Linda Johnson Rice, who joined two years ago, have asked not to be re-elected when shareholders convene on June 11 for Tesla’s annual general meeting, the company said in a preliminary proxy statement,” The New York Times reported late on Friday.

The departing members of the board include Antonio Gracias and Stephen Jurvetson — close friends of Musk who are also directors in SpaceX, Musk’s space launch company.

A member of the board since 2009, Buss was also the Chief Financial Officer of solar panel installer SolarCity for two years until Tesla acquired the firm in 2016.

“Shrinking the board will ‘allow it to operate more nimbly and efficiently’,” the company was quoted as saying in The NYT report.

In November 2018, Musk was replaced by Robyn Denholm as the chairperson of the company’s board.

Musk had agreed to step down as the Chairman of Tesla for three years and pay a $20 million fine in a deal with the stock market regulatory authority, Securities and Exchange Commission (SEC), to resolve securities fraud charges.

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Startups Weekly: Zoom CEO says its stock price is ‘too high’

When Zoom hit the public markets Thursday, its IPO pop, a whopping 81 percent, floored everyone, including its own chief executive officer, Eric Yuan.

Yuan became a billionaire this week when his video conferencing business went public. He told Bloomberg that he actually wished his stock hadn’t soared quite so high. I’m guessing his modesty and laser focus attracted Wall Street to his stock; well, that, and the fact that his business is actually profitable. He is, this week proved, not your average tech CEO.

I chatted with him briefly on listing day. Here’s what he had to say.

“I think the future is so bright and the stock price will follow our execution. Our philosophy remains the same even now that we’ve become a public company. The philosophy, first of all, is you have to focus on execution, but how do you do that? For me as a CEO, my number one role is to make sure Zoom customers are happy. Our market is growing and if our customers are happy they are going to pay for our service. I don’t think anything will change after the IPO. We will probably have a much better brand because we are a public company now, it’s a new milestone.”

“The dream is coming true,” he added. 

For the most part, it sounded like Yuan just wants to get back to work.

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IPO corner

You thought I was done with IPO talk? No, definitely not:

  • Pinterest completed its IPO this week too! Here’s the TLDR: Pinterest popped 25 percent on its debut Thursday and is currently trading up 28 percent. Not bad, Pinterest, not bad.
  • Fastly, a startup I’d admittedly never heard of until this week, filed its S-1 and displayed a nice path to profitability. That means the parade of tech IPOs is far from over.
  • Uber… Surprisingly, no Uber IPO news this week. Sit tight, more is surely coming.

$1B for self-driving cars

While I’m on the subject of Uber, the company’s autonomous vehicles unit did, in fact, raise $1 billion, a piece of news that had been previously reported but was confirmed this week. With funding from Toyota, Denso and SoftBank’s Vision Fund, Uber will spin-out its self-driving car unit, called Uber’s Advanced Technologies Group. The deal values ATG at $7.25 billion.

Robots!

The TechCrunch staff traveled to Berkeley this week for a day-long conference on robotics and artificial intelligence. The highlight? Boston Dynamics CEO Marc Raibert debuted the production version of their buzzworthy electric robot. As we noted last year, the company plans to produce around 100 models of the robot in 2019. Raibert said the company is aiming to start production in July or August. There are robots coming off the assembly line now, but they are betas being used for testing, and the company is still doing redesigns. Pricing details will be announced this summer.

Digital health investment is down

Despite notable rounds for digital health businesses like Ro, known for its direct-to-consumer erectile dysfunction medications, investment in the digital health space is actually down, reports TechCrunch’s Jonathan Shieber. Venture investors, private equity and corporations funneled $2 billion into digital health startups in the first quarter of 2019, down 19 percent from the nearly $2.5 billion invested a year ago. There were also 38 fewer deals done in the first quarter this year than last year, when investors backed 187 early-stage digital health companies, according to data from Mercom Capital Group.

Startup capital

Byton loses co-founder and former CEO, reported $500M Series C to close this summer
Lyric raises $160M from VCs, Airbnb
Brex, the credit card for startups, raises $100M debt round
Ro, a D2C online pharmacy, reaches $500M valuation
Logistics startup Zencargo gets $20M to take on the business of freight forwarding
Co-Star raises $5M to bring its astrology app to Android
Y Combinator grad Fuzzbuzz lands $2.7M seed round to deliver fuzzing as a service

Extra Crunch

Hundreds of billions of dollars in venture capital went into tech startups last year, topping off huge growth this decade. VCs are reviewing more pitch decks than ever, as more people build companies and try to get a slice of the funding opportunities. So how do you do that in such a competitive landscape? Storytelling. Read contributor’s Russ Heddleston’s latest for Extra Crunch: Data tells us that investors love a good story.

Plus: The different playbook of D2C brands

And finally, for the first of a new series on VC-backed exits aptly called The Exit. TechCrunch’s Lucas Matney spoke to Bessemer Venture Partners’ Adam Fisher about Dynamic Yield’s $300M exit to McDonald’s.

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about rounds for Brex, Ro and Kindbody, plus special guest Danny Crichton joined us to discuss the latest in the chip and sensor world.

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