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

• China may have surpassed Japan to become the world’s largest automotive exporter in 2023, according to preliminary data from the China Association of Automobile Manufacturers featured in Reuters. The increase in exports was attributed to the strength of domestic companies such as BYD, Geely and SAIC, as well as Russian demand for gasoline-powered vehicles.
• The U.S. Federal Trade Commission postponed the July 30, 2024 effective date of its Combating Auto Retail Scams (CARS) Rule pending the outcome of a legal challenge by the National Automobile Dealers Association and Texas Automobile Dealers Association.
• The North American International Auto Show will return to its traditional winter slot, and next be held in Detroit on January 10-20, 2025.
• An estimated 25% of automakers and Tier 1 suppliers are fully prepared for the growth of software-defined vehicles, according to an AlixPartners survey of 180 senior executives at auto and tech firms released this month. The survey notes that software-defined vehicles are expected to become more prevalent within four years.
• Hyundai intends to provide up to $7,500 in cash bonuses for EV buyers in the U.S., as part of an effort to increase EV market share, and keep its vehicles competitive with models that qualify for tax credits under the Inflation Reduction Act.
• Ford’s F-150 Lightning production cuts will result in a reduction of an estimated 1,400 workers at the automaker’s Rouge Electric Vehicle Center in Dearborn, Michigan.
• Bloomberg reports the cost of motor-vehicle insurance in the U.S. increased 20% in December 2023 from the year prior, and this represents the largest single increase since 1976.
• Hertz plans to sell 20,000 EVs, or a third of its EV fleet, and replace them with gasoline-powered vehicles, due to weak demand and higher repair costs for battery-powered models.
• Due to the risk of attacks by Houthi rebels in the Red Sea, Stellantis, Tesla, Volkswagen, Volvo, and Michelin have pursued actions such as increased reliance on air freight, rerouting ships, or temporary production reductions or shutdowns at certain plants in Europe.

OEMs/Suppliers

• The Wall Street Journal reports auto executives are considering increased factory automation as one approach to mitigate higher labor costs resulting from the 2023 UAW contracts.
• BMW and Figure, and AI robotics startup, established an agreement to deploy humanoid robots in the automaker’s South Carolina assembly plant.
• A Mercedes-Benz plant in Alabama and a Volkswagen plant in Tennessee each reached a 30% threshold for UAW support, amid a broad campaign to organize non-union auto plants. 
• During an interview at CES in Las Vegas, Qualcomm indicated it is on track for its automotive chip unit to reach or possibly exceed $4 billion in sales by 2026.

Electric Vehicles and Low Emissions Technology

• Cummins’ zero-emissions business segment Accelera, Daimler Truck and PACCAR selected Mississippi as the site of a new advanced battery cell manufactory plant for commercial vehicles. The joint venture between Accelera, Daimler Truck and PACCAR was announced in September 2023.
• A new report from the Center for Automotive Research provides an overview of U.S. battery recycling plants, including current plant locations and capacities, as well as battery R&D expenditures.
• German EV charging company EcoG plans to invest up to $14 million to establish its U.S. headquarters in Detroit.
• Bosch plans to launch a hydrogen internal combustion engine for heavy-duty trucks later this year.
• Goodyear announced a longer-mileage tire for EVs, ElectricDrive™ 2.   Due to their heavier weight, EVs are expected to create more wear and tear on tires.
• Hyundai intends to utilize hydrogen-powered trucks to support logistics for an upcoming EV factory in Georgia. The automaker also has broader goals to pursue hydrogen energy production, storage and transportation in the coming years, according to an announcement at CES.
• LG Electronics opened its first plant for assembling EV charging stations in the U.S. in Fort Worth, Texas.
• Stellantis plans to begin deliveries of its all-electric ProMaster commercial van later this year. The automaker hopes to double commercial vehicle revenue by the end of this decade. 
• The European Union plans to contribute nearly $1 billion toward a $3.4 billion lending package for Northvolt to expand production and recycling of batteries at its plant in Sweden. 
• Stellantis Ventures invested an undisclosed amount in France-based sodium-ion battery startup Tiamat Energy. A number of companies are exploring sodium-based technology as an alternative to lithium-ion batteries, particularly for lower-end, shorter-range EVs or energy storage applications.
• A report released this month from the Alliance for Automotive Innovation states the deployment of U.S. public chargers has not kept pace with EV adoption.  The analysis indicates sales of battery-electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) increased by 59% in the third quarter of 2023 compared to the third quarter of 2022, while publicly available Level 2 and DC Fast chargers increased 26% in the same time period. 
• Bloomberg reports a number of EV charging companies could experience financial risks this year, due to factors that include a slower-than-expected rollout of federal funds to support the installation of EV charging networks.
• The Biden Administration made several announcements to support the buildout of a nationwide network of 500,000 publicly available EV chargers by 2030: 
  • The Department of Transportation announced $623 million in grants to establish 47 EV charging stations and related projects in 22 states and Puerto Rico.  The funding is from the Bipartisan Infrastructure Law’s $2.5 billion Charging and Fueling Infrastructure (CFI) Discretionary Grant Program.
  • The Environmental Protection Agency announced it will adopt the Department of Energy’s categorical exclusion in an effort to speed up certain agency-financed EV charging station installations, modifications, operations, or removals.
  • Separate funding announcements from the Departments of Energy and Transportation will allocate nearly $200 million toward improving the performance and resilience of the U.S. EV charging network.

Automated, Autonomous or Connected Vehicles Technologies

• Waymo asked the California Public Utilities Commission for approval to expand its autonomous ride-hailing service to Los Angeles. The company currently offers robotaxi services in Phoenix and San Francisco. 

Market Trends and Regulatory

• The U.S. Department of Labor announced a final rule addressing when employers can classify workers as independent contractors under federal labor law.
• A new law in Ohio that goes into effect in March 2024 will ban state agencies from adopting “any motor vehicle emissions standards that are established by California as a result of California having received a waiver pursuant to section 209(b) of the federal Clean Air Act.”
• The U.S. Federal Communications Commission is seeking information from nine automakers about their policies for internet-connected vehicle technology in situations involving allegations of domestic abuse.

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