Analysis by Julie Dautermann, Competitive Intelligence Analyst
This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. Contact your Foley relationship partner, or John R. Trentacosta or Ann Marie Uetz, to follow up.
Key Developments
- Foley & Lardner LLP Partner Vanessa
Miller was featured in the article, "'One thing after another': More disruption
looms over semiconductor market," in Supply Chain
Dive discussing the potential for supply chain issues in
the semiconductor industry to worsen due to the ongoing war in
Ukraine, and what the implications are for automakers.
- U.S. new vehicle inventory is estimated at 1.11 million units at the
end of March, representing a 35 days' supply industrywide; this
is a decline of 54% from the same period one year ago.
- According to J.D. Power, new light
vehicle average transaction prices have declined
slightly this year, but remain 26% higher compared to
the end of 2019.
- LMC Automotive predicts that by 2027, light
vehicle production in Mexico could increase by up to
31%, compared to 9% for Canada and 17% for the U.S.
- Toyota lowered its industry forecast
for 2022 U.S. light vehicle sales to 15.5 million
units, down from a previous projection of 16.5 million
units.
- According to the March 2022 Consumer Price Index, new
vehicle prices were up 0.2% and used vehicle prices fell 3.8% from
the prior month. Compared to March 2021, new vehicle prices were up
by 12.5% and used vehicle prices were up by 35.3%.
- Automakers
including Tesla and SAIC
Motor are hoping to gradually resume production in Shanghai this week
following lockdowns in response to
a COVID-19 outbreak.
- Major logistics companies indicate they are in the early stages of
testing autonomous truck technology with
multiple providers, and are hesitant to commit to large orders in
the near-term.
- Electric vehicles and low emissions
technology:
-
- The California Air Resources
Board released a proposal to support the
state's target to end sales of internal
combustion engine vehicles by 2035. If adopted, CARB's plan
would require 35% of new passenger vehicle sales to be
zero-emission vehicles or plug-in hybrids by 2026, increasing to
nearly 70% by 2030.
- The Government Accountability Office predicts
the federal government may need over 100,000 charging
stations to support widespread use of EVs, up from the
1,100 charging stations owned by federal agencies as of March
2022.
- Honda will invest approximately $40 billion
over the next ten years in electrification and software
technologies, and will launch 30 EV models globally by 2030.
- The auto industry could experience a shortage of battery supplies for EVs that surpasses the magnitude of the chip shortage.
- The California Air Resources
Board released a proposal to support the
state's target to end sales of internal
combustion engine vehicles by 2035. If adopted, CARB's plan
would require 35% of new passenger vehicle sales to be
zero-emission vehicles or plug-in hybrids by 2026, increasing to
nearly 70% by 2030.
Market Trends and Regulatory
- The Center for Automotive
Research provided an overview of the
new Corporate Average Fuel Economy
standards which increase passenger vehicle fuel
efficiency by 8% annually for model years 2024-25, and 10% annually
for model year 2026.
- The National Highway Traffic Safety
Administration launched an inquiry into electric vehicle
batteries made by LG Energy Solution
that have been linked to fire risks and recalls by several
automakers in the past two years.
- Retail car sales in China declined by 10.5% in March compared to the same period last year, according to estimates from the China Passenger Car Association.
OEMs/Suppliers
- According to Crain's
Detroit (subscription), Magna
International Inc. and Lear Corp.
are separately pursuing expansion plans to capture more business
from automakers, including joint ventures and opening new plants in
Detroit.
- Wire harness supplier Leoni AG is operating at
up to 80% of prewar output at its plants in
western Ukraine, with employees who requested
to continue working to support the nation amid the ongoing war with
Russia.
- GM resumed production at its Fort Wayne,
Indiana, plant this week following a two-week shutdown resulting
from the chip shortage.
-
Renault and Nissan intend
to meet in person next month for private discussions pertaining to
their alliance, including the possibility of a separate listing for
Renault's electric-vehicle unit. According to unnamed sources
in Bloomberg, there are currently
"no signs of any imminent structural change in the three-way
alliance that includes Mitsubishi Motors Corp."
- Volkswagen plans to eliminate 60% of its gasoline-
and diesel-powered models by 2030 and will instead focus on selling
more profitable premium vehicles.
- At its first digital ESG (Environment, Social and Governance) Conference, Mercedes-Benz announced plans to reduce CO2 emissions per passenger car by over 50% by 2030 compared with 2020 levels.
Connected/Autonomous Vehicles and Mobility Services
- Guidehouse Insights predicts that over 1.2
million automated trucks and buses will be deployed globally
each year by 2032, with long-haul trucking, last-mile
deliveries, and middle-mile deliveries as the dominant
applications. [Press release only, full report not publicly
available]
- Toyota unit Woven
Plant will increase data collection from low-cost
cameras to help scale up autonomous driving
technology while reducing costs. The company noted the more
costly radar and lidar
sensors have greater safety and reliability for
certain types of uses such as robotaxis.
- Aurora Innovation announced a commercial pilot to haul
freight autonomously on a route between Fort Worth and El Paso,
Texas for Werner Enterprises.
- Stellantis will
use Qualcomm's Snapdragon Digital Chassis
for upcoming in-vehicle technology platforms as part of an expanded partnership expected to benefit
connected and data services.
- Autonomous technology company Argo AI will invest $2.6 million to establish a new test facility in South Carolina.
Electric Vehicles and Low Emissions Technology
- Bollinger Motors will develop a Class 3 prototype of an
electric walk-in van for initial piloting by Con
Edison.
- American Axle & Manufacturing Holdings,
Inc. will acquire Hausach,
Germany-based Tekfor Group for €125
million in a deal which is expected to increase AAM's
electrification product portfolio.
- Ford will begin production of its
all-electric F-150 Lightning on April
26.
- GM and Honda
will co-develop a line
of affordable electric vehicles, including
compact crossover vehicles, with global production beginning in
2027.
- Nissan is working with NASA to
develop solid-state batteries for electric
vehicles beginning with a pilot program in 2024, followed by a
broader rollout in 2028.
- Toyota's first all-electric vehicle in
eight years, the 2023 bZ4X small SUV, will begin U.S. sales
in May.
- Wallbox began construction of its first
U.S.-based EV charger manufacturing facility in Arlington,
Texas.
- GM established a multi-year sourcing agreement with Glencore to obtain cobalt for EV batteries.
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