Sep 17, 2020

Axios Generate

Ben Geman

Welcome back! Lots of corporate news today, but we'll have more on the policy and politics front soon. Today's Smart Brevity count: 1,144 words, 4.5 minutes.

🖥 Join Axios' Amy Harder today at 12:30pm ET for a virtual event on the growth of clean energy, featuring Washington Gov. Jay Inslee and Amazon's head of worldwide sustainability Kara Hurst. Register here.

🎵40 years ago, George Benson was atop Billboard's R&B charts with today's addictive intro tune...

1 big thing: Amazon's climate spending reveal

Illustration: Sarah Grillo/Axios

Amazon just named the first recipients of money from the $2 billion venture fund it rolled out in June to help companies develop climate friendly technologies, Axios' Amy Harder and I report.

Driving the news: Amazon, which has pledged to have net-zero emissions by 2040, announced this morning that the initial recipients are...

  • CarbonCure Technologies, a firm with tech that sequesters CO2 in concrete.
  • Pachama, which provides forest carbon offsets and touts use of machine learning and satellite imagery to measure and verify CO2 removal.
  • Redwood Materials, the battery and electronic waste recycling company launched by Tesla's former chief technology officer.
  • Turntide Technologies, which provides efficient electric motors.

Why it matters: The investments from the Climate Pledge Fund signal how tech giants that have announced splashy emissions goals are taking more concrete steps to implement them.

  • For instance, Microsoft, which in January vowed to be "carbon negative" by 2030, recently announced the first investment from its $1 billion climate innovation fund.

How it works: Amazon said it's not only staking the fund recipients, but using the firms' products too. That includes using CarbonCure's technology in "many" of its new buildings.

  • Amazon is counting its existing investments in the electric vehicle company Rivian as one of the fund's outlays, but did not announce new funding.
  • In addition to staking Rivian, last year Amazon ordered 100,000 electric delivery vehicles from them and plans to have 10,000 on the roads by 2022.

By the numbers: Amazon isn't disclosing the exact amounts of the investments, but they range "from hundreds of thousands in seed and early-stage investments to multimillion dollar investments," spokesperson Luis Davila said.

What they're saying: “We witnessed the tech industry setting climate change trends with their adoption of renewable energy sources like wind and solar," CarbonCure CEO Robert Niven said.

  • "This investment in [carbon dioxide removal] signals a broader change for public and private infrastructure projects as industries and governments turn their focus toward the reduction of embodied carbon."

Where it stands: Other investments in carbon removal projects and companies are piling up.

  • E-commerce company Shopify announced investments this week in CarbonCure, Pachama, the direct air capture firm Carbon Engineering, and others in the carbon removal space.
  • In May, the payment tech company Stripe announced its first four carbon removal purchases, and this summer Microsoft issued a request for proposals for removal projects to finance.
2. LG Chem spins off battery unit as EVs rise

Korean giant LG Chem this morning said it's splitting off its battery unit into a new company called LG Energy Solutions and is weighing an IPO for the stand-alone entity.

Why it matters: LG Chem called the plan a nod to the growth of EVs. “We came to the judgment that this is the right time for the corporate spin-off as the battery industry is growing rapidly and structural profits in the EV battery sector are being made in earnest."

The big picture: The company is a big player in the competitive battery space, with customers including Tesla, GM and Audi.

  • Per FT, their share of the EV battery market is over 25% as of July, which put it ahead of competitors CATL and Panasonic.
  • LG Chem said it expects its battery business to end this year with about $11 billion in revenue, and sees that growing to $26 billion in 2024.
  • LG Chem said that in addition to battery manufacturing and sales, it aims to offer "various services throughout the lifetime of batteries such as battery care/lease/charging/reuse."
3. Chart of the day: Sudden events and long-term changes
Expand chart
Reproduced from Morgan Stanley; Chart: Axios Visuals

This chart from a recent Morgan Stanley report caught Amy's eye for the way it puts oil use into historical context. She writes...

Driving the news: Geopolitical unrest in the late '70s and early '80s — the Iranian Revolution and start of the Iran-Iraq war — disrupted a lot of oil supply that, in turn, sent prices skyrocketing.

Where it stands: That sudden jolt to the global oil system permanently cut oil consumption per capita that’s stayed with the world ever since, says Martijn Rats, managing director for equity research for Morgan Stanley.

  • Auto manufacturers started to improve engine efficiency and oil began to be replaced as an electricity source. 

Why it matters: It shows how sudden changes in the world can make permanent changes, but given today’s persistent environment of low oil and gas prices, it raises the question of what other kind of forces could bring about change. 

What we’re watching: If extreme weather or continued price reductions in new tech might jolt policymakers into emissions-cutting action. 

How it works: Given these three trends — global population, GDP per capita and oil consumption per capita — have very different orders of magnitude, Morgan Stanley indexed them to a common numerical measurement.

  • The purpose of the chart is to show how these three have grown over a long period of time relative to each other, so their absolute levels are not as important.
4. Ford's electric F-150 plans come into focus

Screenshot of the electric Ford F-150 from a promotional video. Courtesy of Ford

Ford is offering more info about the design and strategy around its long-awaited entry into the electric truck market, the battery-powered F-150 pickup arriving in mid-2022.

Why it matters: There's new capital coming into the increasingly competitive electric pickup race, with Tesla, Rivian and others bringing new models to market over the next couple of years.

  • Ford is spending $700 million to expand the capacity of its existing Rouge Complex to build the EV and a hybrid version of the popular F-150 line.

The intrigue: Ford is not trying to compete with Tesla or GMC's electric Hummer in the race to build something that would look at home in a sci-fi movie or a Mad Max-ified future.

  • Instead, look for something that's very recognizably a regular pickup, albeit a next-wave version.
  • “Others are aiming for lifestyle vehicles. Ours is designed and engineered for hard-working customers who want a truck to do a job,” Ford's Kumar Galhotra told reporters this week.
  • Galhotra, president of its Americas & International Markets Group, said the design is an "evolution," but will still "capture the DNA of the F-150."

How it works: They said the truck will have more horsepower and torque than any gasoline-powered F-150s, and accelerate more quickly too. They're also touting the vehicle's ability to serve as a power source.

  • "Ford will debut new technology on the electric F-150 that allows mobile power generation so customers can use their trucks as a power source for places from campsites to job sites when needed," a release states.

What we don't know: The price.

Go deeper: 2022 Ford F-150 EV due after Tesla Cybertruck, GMC Hummer, Rivian EVs (Motor Trend)

5. Catch up fast: nuclear, China, EV charging

Power: "Work on a major new nuclear power station in Britain will stop after Japanese company Hitachi pulled out of the project." (AP)

Climate: "China is mulling proposals to accelerate its adoption of clean energy as part of its next five-year plan that begins in 2021, as the world’s biggest polluter takes steps to reduce its emissions of greenhouse gasses." (Bloomberg)

EVs: "ChargePoint Inc, one of the world’s oldest and largest electric vehicle charging networks, is nearing a deal to go public through a reverse merger with Switchback Energy Acquisition Corp." (Reuters)

Ben Geman