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Greetings from D.C., where I'm visiting the Axios Mothership this week. It's great to connect with colleagues and plan how we'll deliver more Smart Brevity™ about what matters in 2020! Stay tuned.

Situational awareness: NHTSA said today it will review a petition asking the agency to investigate 500,000 Tesla models over sudden unintended acceleration reports, per Reuters.

Today's newsletter is 1,553 words, a 6-minute read.

1 big thing: the rise of AV testbed cities

Computer image of Woven City. Photo: Courtesy of Toyota

In China and Japan, high-tech cities are being developed as living laboratories to test automated vehicles, robots and artificial intelligence.

Why it matters: The real-world incubators could help accelerate the development of infrastructure and related ecosystems needed to support self-driving cars, at a pace the U.S. potentially can't match.

  • Private AV testing facilities exist in places like Michigan, Ohio and California, and some companies are even testing AVs on public streets in Phoenix, Pittsburgh, Miami and other cities — but only in small numbers.
  • The U.S. has no large-scale testing environment on par with what the Chinese government or even Toyota are planning for the integration of humans and robots in daily life.
  • Nor is it clear the federal government — or any private corporation, for that matter — could afford to fund such an effort.
  • The Trump administration prefers a light-touch approach to regulating AVs and artificial intelligence, a position that was reinforced last week when Transportation Secretary Elaine Chao announced modestly updated AV policy guidelines.

Yes, but: It's a different story elsewhere in the world.

China's Xiongan New Area project, near Beijing, is part of the central government's ambitious drive to lead in new technologies like AI and 5G communication.

  • Announced by President Xi Jinping in 2017, the mega-city is being built in a rural area about 60 miles southwest of the Chinese capital, at a potential cost of $300 billion, according to Nikkei Asian Review.
  • As part of the vision, every car would be self-driving by the time the city is completed in 2035.

Woven City, near Japan's Mount Fuji, is a much smaller project — just 175 acres — that is being led not by the government, but by one of its leading industrial giants, Toyota Motor Corp.

  • The master plan calls for dedicated streets for AVs, personal mobility vehicles and pedestrians to help accelerate the testing of autonomy.
  • Only fully-autonomous, zero-emission vehicles like Toyota's e-Palette shuttles, would be allowed on the main thoroughfares.

If the U.S. were to build a similar prototype city, it would need to invest or direct billions of dollars in advanced technologies like 5G, vehicle-to-vehicle communication, electric charging infrastructure and vehicle automation in an area with a high population density.

  • Cities like New York and Los Angeles need such innovations, but it's impractical and disruptive to rip up existing infrastructure and start over.

My thought bubble: Why not San Juan, Puerto Rico?

  • Humanitarian issues must take precedence after a series of natural disasters, including earthquakes earlier this month.
  • But its power grid is precarious and its infrastructure is a shambles.
  • Rebuilding from scratch could make it an ideal environment to test cutting-edge technologies and give the local economy a boost, too.

Yes, but: Puerto Rican residents have to want to be test subjects, notes Michelle Avary, head of autonomous mobility at the World Economic Forum.

  • "An active engaged citizenry that understands and agrees to testing, whether it be highly automated driving systems or installing microgrids, vehicle to grid, and EV charging stations, is crucial," she tells Axios.

Previous attempts to modernize Puerto Rico's crumbling infrastructure have struggled.

  • After hurricanes Irma and Maria, Tesla sent solar panels and batteries to the island but its plan to create a modern network of solar-powered micro-grids ran into regulatory and long-term planning hurdles.

The bottom line: Chao says the federal government is "all in" on the development of safe, future transportation. But with the world racing ahead, the U.S. is going to have to think bigger.

2. Carmakers take to the air

Joby Aircraft's urban air taxi concept. Photo: Courtesy of Toyota

If you've been skeptical about flying taxis, consider this: Toyota and Hyundai, two of the biggest, most powerful automakers on the planet, seem to be taking them very seriously.

What's new: Toyota just invested $394 million as lead investor in a $590 million Series C financing round in Joby Aviation, a Santa Cruz, California-based developer of electric air taxis.

  • It's not out of the blue. Toyota AI Ventures, the automaker's venture financing unit, was a previous investor.
  • Joby has now raised a total of $720 million, making it the best-funded of all companies developing electric vertical takeoff and landing vehicles (eVTOLs).

And Toyota plans to be an active investor.

  • Executive VP Shigeki Tomoyama will join Joby's board of directors and the company will share its expertise in manufacturing, quality and cost controls to bring Joby's aircraft to market.

Toyota's announcement comes barely a week after Hyundai made a splash at CES in Las Vegas with its own air taxi concept and a partnership with Uber to bring it to market.

The bottom line: Automakers are confronting serious challenges to their core business — congestion and climate change mean there's a limit to how many cars and trucks they can put on the road. As they experiment with new forms of future mobility, they might as well look to the skies.

3. Hyundai's bold moves

Computer image of a potential hub for urban air taxis. Image: Hyundai

Speaking of Hyundai, the Korean carmaker has been making a string of bold moves in the future mobility space lately. In addition to the partnership with Uber on air taxis...

The big picture: Hyundai plans to transition to a "smart mobility solution provider" by 2025, focusing on both mobility "devices" and services.

  • With devices, Hyundai says it will expand beyond automobiles to include personal air vehicles, robotics and last-mile mobility.
  • On the service side, it plans to offer personalized services and content on a new digital platform.

The bottom line: Hyundai is putting big money behind its ambitions. The company plans to invest 61.1 trillion won ($52.7 billion) in R&D and future mobility by 2025.

4. Texas commuters are the worst polluters
Expand chart
Reproduced from StreetLight Data; Chart: Axios Visuals

Transportation is a top contributor to greenhouse gas emissions, but the worst offenders aren't congested cities like New York and San Francisco. Instead, it's sprawling, car-dependent metros like Dallas and Houston, a new analysis finds.

Why it matters: Even dense, traffic-choked cities can offset their carbon outputs with better urban planning and other, cleaner forms of transportation, says StreetLight Data, which studied mobility behavior in 100 cities to create its new U.S. Transportation Climate Impact Index.

What they did: Using location-based data from mobile phones, StreetLight Data scored each metropolitan area, per capita, by six transportation factors to gain a fuller picture of their climate impact.

  • They looked at vehicle miles traveled (VMT), transit ridership, bike commuting, pedestrian commuting, population density and circuity (the difference between an actual route taken and a straight line between A and B).
  • Instead of counting how many bike paths each city has, they measured how much actual bike commuting people do in each city.

What they found: The New York metro area has the lowest climate impact.

  • Although Metro NYC commuters drive long distances to get to and from work, the widespread use of public transit in Manhattan — and lots of good old-fashioned walking — offset most of those vehicle miles traveled.
  • Dallas, on the other hand, ranked worst because people there mostly drive to get where they're going. Houston didn't fare much better.

Between the lines: Reducing transportation climate impact varies by city.

  • For example, a dense vibrant downtown may have low car use and high walking, but if housing prices and availability force its workers to live 30 miles away, its climate impact could be higher than expected.
  • Adding more low-cost housing downtown could be a good solution.

Go deeper for a look at all 100 cities.

5. Driving the conversation

Braking: Auto parts maker Magna expects lower 2020 sales, scraps Lyft partnership (Ben Klayman and Shradha SinghReuters)

  • Why it matters: It's the latest example of automotive suppliers hitting the brakes on self-driving cars to focus more on assisted driving technologies, which are a surer bet. Lyft still has a self-driving partnership with Aptiv, which seems to be plowing ahead.

Joint venture: Foxconn and Fiat Chrysler partner to develop EVs and an "internet of vehicles" business (Kirsten Korosec — Techcrunch)

  • Why it matters: FCA's partnership with Foxconn, best known for manufacturing iPhones, could help the carmaker land more customers in China. Although the jointly built EVs will be targeted for China, they could be exported one day.

Outlook fuzzy: Quanergy CEO leaves after driverless tech unicorn stumbles (Joshua Brustein and Mark Bergen — Bloomberg)

6. What I'm driving

2020 Ram 1500 black edition. Photo: Courtesy of Fiat Chrysler Automobiles

This week I'm driving the hot-selling 2020 Ram 15oo pickup with a newly available 3.0-liter turbodiesel V6 engine.

The big picture: Until electric and hybrid trucks arrive, diesel-powered versions like this are among the best bets for fuel economy .

The details: Rams start around $32,000, but my loaner is a Limited Crew Cab 4x4, which has a base price of $56,965.

  • Loaded with options, including the $4,995 Ecodiesel engine, mine skyrocketed to $75,610.
  • There seems to be no price ceiling in the premium truck market.

Performance: It features 480 lb.-ft. of torque, and towing capability up to 12,560 lbs.

  • The Ram Ecodiesel earned an EPA rating of 32/22 mpg highway/city for 4x2 models; and 29/21 mpg for 4x4 models like mine.

My impressions: The diesel is surprisingly smooth, and the Ram's air suspension almost makes you forget you're driving a truck.

  • It's a quiet ride, thanks to active noise cancellation in the cabin.
  • Motorized running boards that fold down when you open the door make it easy even for me, at five-feet-one-inch, to get into this truck.
  • I think it's the best-looking pickup on the market, but styling is subjective.

The bottom line: I'm not a truck fan, but if I were in the market, the Ram would definitely be on my list.