Weekly Brief: Porsche Recognizes Power of Start-Ups

Commentary By Andrew Tolve

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13th June 2022

How do carmakers become more nimble, innovative and adept at change?

Porsche announced a new approach last week that will see the carmaker partner with a new venture lab and start-up incubator called UP.Labs based in Los Angeles. Together the companies will build six new companies from 2023 to 2025. Each company will respond to an area of unmet need or potential in Porsche’s business. For example, the start-ups could target predictive maintenance, supply chain transparency or digital retail. The start-ups will be minority owned by Porsche, with the option to purchase them entirely after three years. Development is already underway for the first two start-ups, to be founded before the end of 2022.

“We want to strengthen our existing, broad-based start-up ecosystem with an external growth engine,” said Lutz Meschke, deputy chairman of Porsche’s executive board. “The concept combines the advantages of free start-up development on the market with the direct involvement of our employees and a close link to Porsche.”

Carmakers have become active players in the venture capital world in the past five years as they seek to gain a stake in innovative mobility solutions without having to wrestle with their own internal bureaucracies. General Motors’ investment in Cruise, for instance, made it a central player in the autonomous vehicle landscape overnight without having to pull off any major internal pivots or wade through a slow corporate slog.

Since 2016 Porsche has taken stakes in around 40 start-ups with new business models and new technologies. What sets this new collaboration apart is that UP.Labs will work directly with Porsche to develop start-ups tailor-made for its own problems, in partnership with Porsche and its employees from day one. UP.Labs will help incubate and grow the businesses with access to $250M from the new Venture Capital Fund 1 launched by UP.Partners. Porsche will invest a sum in the double-digit millions in the next three years. The carmaker is UP.Labs’s first corporate client but the incubator plans to partner with more companies in the near future.

In other news last week, Waymo’s autonomous trucking arm, Waymo Via, announced a long-term strategic partnership with Uber to deploy autonomous trucks at scale on the Uber Freight network. Waymo and Uber were locked in a litigious battle for years over allegations of cyber theft, which resulted in Uber paying Waymo roughly $245M and agreeing to never use its technology again. Evidently, the two have put the drama behind them. As part of the long-term agreement, Waymo Via intends to reserve billions of miles of its goods-only capacity for the Uber Freight network.

Scania launched a new range of electric heavy trucks whose performance can match or exceed that of conventional combustion engine trucks, according to Scania. The truck maker is looking to ease its customers’ transitions to electric trucking by offering wrap-around services like charging, finance, insurance and maintenance. Paul Myles has the full story.

Finally, Tesla’s rocky relationship with the US federal government worsened last week when the National Highway Traffic Safety Administration escalated its probe into Tesla vehicles outfitted with the EV-maker’s automated driving feature Autopilot. NHTSA has expanded its investigation to include 830,000 Tesla EVs, upgrading from a “preliminary evaluation” to an “engineering analysis”. The latter designation makes a mandatory recall more likely.