Analysis by Julie Dautermann, Competitive Intelligence Analyst

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

Key Developments

• Foley & Lardner will host a half-day Automotive Forum on Wednesday, September 13, at the Detroit Athletic Club to coincide with the 2023 North American International Auto Show. Register HERE to attend the morning forum and hear more about key business and legal issues impacting the automotive industry.
• U.S. new light-vehicle sales are projected to reach 1.35 million units in August, representing an increase of 15% year-over-year and a SAAR of 15.3 million units, according to a joint forecast from J.D. Power and GlobalData.
• Foley & Lardner of counsel Mark Neuberger is quoted in the Law360 article, “Big 3 Face Big Demands As UAW Members Vote On Strike,” discussing the looming expiration of United Auto Workers’ labor contracts with major automakers and the ongoing bargaining between the parties towards a new deal.
• On August 25, the UAW announced 97% of its members supported a procedural vote authorizing one or more potential strikes against Detroit Three automakers if union leadership deems it necessary.
• Consulting firm Anderson Economic Group (AEG) estimates a potential UAW strike on all three automakers could result in a total economic loss of more than $5 billion after 10 full days.
• Foley & Lardner provided an overview of Mexico’s decision to increase import tariffs for non-Free Trade Agreement countries.
• Reuters reports automotive components including lithium-ion batteries, tires, aluminum and steel “are increasingly subject to detentions at the border” due to scrutiny resulting from the Uyghur Forced Labor Prevention Act.
• Foley & Lardner partner Aaron Tantleff is quoted in the Automotive Dive article, “Automotive data privacy under scrutiny in California,” discussing the California Privacy Protection Agency’s investigation of how automakers are handling data collected from internet-connected vehicles.
• The National Highway Traffic Safety Administration (NHTSA) indicated automakers can comply with the Massachusetts "right to repair" law, reversing a previous position which expressed concerns that enforcement of certain requirements could increase vehicles’ vulnerability to cyberattacks.
• Foley & Lardner attorneys Morten Lund and Amanda Beggs provided commentary on the potential impact of proposed EPA vehicle emissions regulation on EV adoption.
• J.D. Power’s 2023 U.S. Electric Vehicle Experience (EVX) Public Charging Study found customer satisfaction at both Level 2 chargers and Level 3 direct current (DC) fast chargers declined in nearly every category from the previous year. The study also indicates one in five charging attempts failed in the first half of the year, mostly due to station outages.

OEMs/Suppliers

• GM temporarily halted truck production at its Fort Wayne, Indiana plant the week of August 28 due to an unspecified parts shortage.
• Hyundai is experiencing pressure from labor unions and civic groups to improve community engagement and workforce safety at its plants in Georgia and Alabama, according to a report in The New York Times (subscription).
• The increased prevalence of wildfire smoke in many regions this summer has brought new attention to improving in-vehicle air filtration, according to a report in Bloomberg.

Electric Vehicles and Low Emissions Technology

• Analysis from J.D. Power indicates battery-electric vehicle (BEV) owners report more problems with advanced technology features and lower satisfaction with dealer-operated service facilities than owners of internal combustion vehicles. The discrepancy is attributed to factors that include the increased prevalence of first-time BEV owners and higher recall rates for BEVs.
• At least $63 billion in public- and private-sector funds have been committed to the nation’s battery supply chain since the Inflation Reduction Act was signed, according to analysis from S&P Global Commodity Insights.
• Global lithium production will need to increase more than fivefold at a cost of roughly $116 billion by 2030 in order to meet anticipated EV battery demand, according to data from Benchmark Mineral Intelligence featured in Supply Management.
• Near-term market impediments to the EV transition include a potential UAW strike, the outcome of the 2024 presidential election, uncertain consumer demand for EVs, and the pace of private investment, according to a report in Bloomberg.
• Hourly workers at the Ultium Cells GM – LG Energy Solution joint venture plant in Ohio will receive a pay increase of 25% on average. Last year workers at the plant voted to unionize.
• Stellantis will invest over $100 million in Controlled Thermal Resources’ geothermal lithium project in California, and the companies intend to expand their supply agreement for battery-grade lithium hydroxide monohydrate (LHM).
• Ford will partner with EcoPro BM Co. and SK On to build a C$1.2 billion battery materials plant in Quebec. Production is expected to begin in 2026, and the facility will supply batteries for Ford’s future electric vehicles.
• Battery recycling company Redwood Materials raised over $1 billion in a Series D funding round.
• Plastic Omnium will invest approximately $170 million to build a hydrogen storage manufacturing plant in Grand Blanc Township, Michigan to supply a major automaker.
• Nikola is voluntarily recalling roughly 209 of its battery-powered commercial trucks after an investigation found a defective battery part may have caused a fire in one of the trucks.
• Vietnamese EV maker VinFast began trading on the Nasdaq on August 15, following the completion of its merger with a special-purpose acquisition company.

Automated, Autonomous or Connected Vehicles Technologies

• On August 10, the California Public Utilities Commission (CPUC) approved permits allowing Waymo and GM business unit Cruise to charge fares for autonomous ride-hailing services at any time of day in San Francisco.  Separately, California’s Department of Motor Vehicles requested that Cruise reduce its fleet of operating vehicles in San Francisco by 50% after its autonomous vehicles were recently involved in two collisions.
• Ford plans to offer its BlueCruise hands-free highway driving system on roughly 500,000 of its 2024 model year vehicles, and customers may purchase the feature monthly or annually. The automaker has estimated revenue from various types of in-car software services could increase “by 1000%” in the years ahead.
• GM is using artificial intelligence technology from Google to assist simple OnStar calls, such as those involving routing or navigation.
• A study funded by the AAA Foundation for Traffic Safety estimates advanced driver assistance systems (ADAS) could achieve a 16% drop in crashes and injuries and a 22% reduction in deaths over the next 30 years.

Market Trends and Regulatory

• The average weight of a new vehicle sold in the U.S. reached 4,329 pounds in 2022, which is 175 pounds heavier in the last three years and 1,000 pounds heavier than the average in 1980.
• A new study from the Center for Automotive Research (CAR) and Fresh Coast Climate Solutions highlights the imperative for the automotive supply chain to align with the Paris Agreement target limiting increases to global average temperatures.
• NHTSA released a proposed rule requiring seat belt warnings for front and rear passengers in vehicles including cars, light trucks, most buses and multiuse passenger vehicles with a gross vehicle weight of up to 10,000 pounds.

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