Foley Automotive Report – May 2022 – 2 | Foley & Lardner LLP


Analysis by Julie Dautermann, Competitive Intelligence Analyst

This report helps automotive suppliers inform their legal and operational decisions to help them address challenges and seize opportunities.

Key developments

  • A supplier alert Foley & Lardner shared key points involving the decision by Stellantide cancel unpopular new terms and conditions of order.
  • LMC Automotive Estimates Sales of new light vehicles in the United States reached 4.55 million units in the first four months of 2022a decrease of 16% compared to the same period in 2021, but an increase of 8% compared to 2020.
  • the shortage of semiconductors resulted in the loss of nearly 1.7 million units produced worldwide this yearaccording to AutoForecast Solutions quoted in The Detroit News.
  • Toyota noted high raw material costs and in progress semiconductor shortages could cut its next full-year profit by around 20%, while noting that continued economic uncertainty made it difficult to provide a forecast.
  • Crain Strait (subscription) reports recent revenue results from several major automotive suppliers reflect the ongoing impact of inflation and output volatility.
  • US heavyweights a truck and trailer orders recorded a double-digit decline in April, the result of manufacturers’ tight control of orders amid parts shortages and supply chain uncertainty.
  • Ford, GM and Stellantide plans to reinstate mask mandates in the facilities of Michigan counties at high risk of COVID-19 transmission.
  • According to a recent blog post by Foley & Lardnerthe Mexican Antitrust Commission (“COFECE”) recently fined “more than 9 million Mexican pesos to companies in the auto parts sector for failing to notify two mergers in time”.
  • Bloomberg reports GM will increase wages by 8.5% at its truck plant in Silao, Guanajuato, under a new collective agreement with the SINTTIA union.
  • Electric vehicles and low-emission technologies:
    • CEOs of automakers including Stellantis, Tesla and Volvo have warned component shortages and higher raw material prices could present significant risk to electric vehicle supply chains.
    • the US Department of Energy announced a $45 million program to support domestic production of advanced EV batteries. the Electric Vehicles for Low-Carbon American Living The program includes investments to create batteries with faster charge times and improved resilience and energy efficiency.
    • Bollinger Engines will partner with Roush Industries to manufacture all-electric commercial platforms and chassis cabs.
    • the Automotive Innovation Alliance released a policy framework to address the reuse, reuse and recycling of EV battery components.

Market trends and regulations

  • Passenger car sales in China fell 35.7% in April from the same period a year ago, according to estimates from the China Passenger Car Association.
  • The Wall Street Journal reports record diesel prices weigh on the operating costs of trucking companies and exacerbate high transportation costs along supply chains.

OEMs/suppliers

  • Due to the shortage of semiconductors, Stellantide and Ford temporarily idle production last week at plants in Illinois, Kentucky and Ontario. Affected models included the Jeep Cherokee, Ford Escape, Ford Edge, Lincoln Corsair and Lincoln Nautilus.
  • Stellantide temporarily halted production at its minivan plant in Windsor, Ont., last week due to a unspecified parts shortage which was not related to semiconductors.
  • Toyota will reduce production at 12 factories in Japan for up to six days in May due to the impact of COVID-19 lockdowns in Chinaand worldwide production targets were reduced by approximately 50,000 vehicles.
  • GM announced a partnership with INRIX Inc.. provide data on security solutions to US Department of Transportation thanks to analyzes from a cloud-based application called Safety View by GM Future Roads & Inrix.
  • Toyota will use computer vision technology from the Austin, Texas-based startup Invisible AI in its North American assembly plants to process body motion data to improve safety, quality and efficiency.

Connected/Autonomous Vehicles and Mobility Services

  • magna announced new advanced driver assistance systems (ADAS) for the 2022 Toyota Tundra in the North American market, including a “complete surround view system” that provides a “3D flyover image of the vehicle and its surroundings upon start-up”.
  • Aurora Innovation announced a collaboration with a long-haul road carrier Alliance Logistics to “explore the integration and deployment” of Aurora’s autonomous trucking product.
  • GM announced a partnership with an open source software solution provider Red Hat to expand software-defined vehicle programs, including the automaker’s upcoming Ultifi platform.
  • Volvo Autonomous Solutions will partner with DHL supply chain pilot a new “hub-to-hub transport solution” in North America.
  • Stellantis Car-Sharing Mobility Unit Free2move will acquire Share now of the BMW and Mercedes-Benz groups, which adds service offers in 14 European cities and 10,000 vehicles to Free2move’s existing fleet of 2,500 vehicles.

Electric vehicles and low-emission technologies

  • battery manufacturer Contemporary Amperex Technology Co. (CATL) is examining potential U.S. sites for a new manufacturing facility, according to unconfirmed reports in Reuters.
  • Wood Mackenzie predicts there will be a large US market for electrification of heavy goods vehicles. However, this segment will likely experience a slower ramp-up due to market barriers including lack of model availability, as well as battery capacity issues. [Summary only, full report not publicly available]
  • Software vulnerabilities could expose EV charging stations as a potential target of the Piratesaccording to a recent report by Automotive News.
  • foxcon completed a $230 million transaction to acquire Lordstown Motors’ Ohio plant, and the site will become a joint venture between the two companies to produce electric pickup trucks.
  • Subaru will invest $1.9 billion in electric vehicle battery capacity over the next five years as part of a broader investment in electrification.
  • Nissan said it could add a third plant in the United States by the end of the decade, citing the importance of localizing production as well as the potential need to meet future EV demand. The automaker currently has US manufacturing facilities in Canton, Mississippi and Smyrna, Tennessee.

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