#263: Volkswagen Power Day Suggests the Right Strategy at the Wrong Speed, & More

This week, Volkswagen held its Power Day, unveiling plans for battery production and charging infrastructure through 2030 in a way that emulated Tesla’s Battery Day last September. High-level takeaways included VW’s plans to produce 240 GWh of batteries, reduce battery costs by roughly 50%, and add 18,000 fast-charging points.

What the press release did not convey, the live presentation captured. During the antithesis of an early Steve Jobs presentation, dozens of presenters, each with 30 seconds, highlighted how their team plans to contribute to Volkswagen’s EV transition strategy.

In ARK’s view, companies with ‘old world DNA’ are unlikely to transition quickly enough to dominate the new world. Often the difference between old and new world DNA are plans for linear as opposed to exponential growth trajectories. Tesla’s stated goal for 2030 is three terawatt-hours of annual production, 12.5 times more than VW’s 240 gigawatt-hours. In an exponential world, companies thinking linearly could be left behind.

In a series of blogs, Facebook laid out its vision of human-computer interaction (HCI), and spoiler alert: it does not include smartphones. Instead, Facebook is focused on a “contextually aware, AI-powered interface for augmented reality (AR) glasses.”

To achieve its vision, Facebook needs to optimize the AR interface. One option is the human wrist. Yes, your wrist!

In 2019, Facebook acquired a neural interface startup called CTRL-Labs. At the time, CTRL-Labs was developing a “mind-reading wristband”. Here is an old demo video – watch.

This week, Facebook released a demo showing how the new tech will be able to control future AR displays – definitely watch!

So why the wrist? Well, according to Facebook, “The wrist is a traditional place to wear a watch, meaning [the new device] could reasonably fit into everyday life and social contexts. It’s a comfortable location for all-day wear. It’s located right next to the primary instruments you use to interact with the world — your hands.”

While the world is years away from AR dominance in everyday life, Facebook seems to be approaching the challenge with the right mindset. Every advancement in computing has centered around convenience and engagement. Both have been critical to the internet’s evolution. Prior to multi-touch capable smartphones, for example, cellphone use was limited to texting, calling, playing brick-breaker, and maybe browsing the internet. Today, thanks to incremental advancements like multi-touch, smartphones have become our primary computing devices.

If Facebook can execute on its vision, we believe someday soon smartphones will give way to sleek pairs of AR glasses and smartwatches.

This week a WSJ video captured the early days of China’s digital RMB rollout. The video acknowledges the benefits of a central bank digital currency (CBDC), among them convenience, control of the money supply, and KYC/AML or know your customer/anti-money laundering. The unspoken concern revolves around privacy.

Another consideration is the challenge that a digital RMB will pose to the existing digital wallet duopoly: Ant’s Alipay and Tencent’s WeChat Pay. In our view, free of merchant transaction fees, a digital RMB account could compete effectively with the duopoly. That said, according to the PBOC’s Head of Digital RMB Research Mu Changchun, the digital RMB will serve not as a digital wallet but as M0 money supply.

We believe that de-throning China’s digital wallet duopoly would be difficult given their tight integration into China’s internet ecosystem. While digital RMB could become a part of China’s digital wallet ecosystem, only time will tell.

Historically, proteomics – the study of all proteins in an organism – has lagged behind genomics in clinical diagnostics. The collection of all proteins in the human body, also known as the proteome, is more complicated and difficult to analyze than the genome which has only ~20,000 genes. As a result, molecular diagnostics have centered on DNA and RNA instead of proteins to detect disease and guide therapy.

While next generation sequencing (NGS) has been the force behind molecular diagnostics, enabling inexpensive, scalable, and accurate analysis of DNA and RNA, the analytical ecosystem has been more complex. Many diagnostic companies have differentiated their capabilities with upstream sample prep and downstream bioinformatics, maximizing the detection of DNA and/or RNA in a sample.

In our view, sample prep and bioinformatics companies that are focused on proteomics will be able to enhance existing protein detection instruments like mass spectrometers (MS). Seer (SEER), an emerging proteomics company, is one example. Unlike other companies in this space, Seer is building not a new protein detector but an automated sample prep system with powerful software aiming to overcome a challenge associated with proteomics, the wide range of relevant-to-life proteins in blood samples. Some proteins are abundant in blood while others are rare and difficult to analyze. Seer’s solution, a proteograph, leverages a proprietary set of magnetic nanoparticles that catch and release low-frequency proteins, making them easier to detect with MS. In our view, Seer’s proteograph platform could combine with newer protein detectors like those at Nautilus (ARYA) and Quantum-Si (CAPA) to advance the field of proteomics at an accelerated rate.