This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities.
- The auto industry could experience supply chain challenges due to potential shortages of rubber, according to Foley & Lardner Partner Ann Marie Uetz as quoted in Bloomberg.
- Stellantis has four North American plants shut down as a result of the semiconductor shortage, and Ford last week announced additional shutdowns impacting five U.S. facilities, including F-150 production in Kansas City, Missouri.
- Ford announced on-site COVID-19 vaccinations would become available to employees at certain plants in Southeastern Michigan, Lima, Ohio, and Kansas City, Missouri.
- The Michigan Occupational Safety and Health Administration extended pandemic workplace restrictions by six months until October 14, 2021; the rules were first issued on October 14, 2020.
- Ford pushed back return-to-work plans from July to October for most of its U.S. salaried employees; the decision was attributed to MIOSHA’s extension of workplace restrictions.
- Over three dozen Michigan businesses, including GM, Ford and Stellantis, released a joint statement opposing bills that would implement voting restrictions in Michigan and other states.
- Backlogs at major U.S. ports are predicted to continue throughout the summer and possibly longer, according to Daniel B. Maffei, chairman of the Federal Maritime Commission.
- The Leaders Summit on Climate hosted by the Biden administration later this week is expected to result in a new target for U.S. emissions reductions to achieve by 2030.
- Walmart invested an undisclosed amount in GM-backed autonomous driving company Cruise LLC as part of a $2.75 billion funding round announced earlier this year.
- Electric vehicles and low emissions technology:
- Sales of battery-electric and hybrid vehicles represented 7.8% of the U.S. market in Q1 2021, according to Cox Automotive.
- Washington state lawmakers voted to phase out the sale of gasoline-powered vehicles beginning in 2030, five years earlier than timetables in California and Massachusetts.
- Magna International will partner with Israeli startup REE Automotive to design and build an electric vehicle using REE’s modular platform.
- IHS Markit predicts that global demand for lithium-ion batteries will increase from 230 GWh in 2020 to almost 1,700 GWh by 2030, with the bulk of the growth resulting from EVs.
Market Trends and Regulatory
- An April 12 virtual meeting of automotive and technology companies hosted by the Biden administration did not result in immediate commitments specific to the automotive industry, although there were assurances of bipartisan support for funding to increase domestic production of semiconductors, including a letter signed by 29 senators and 43 representatives that support the prioritization of securing funding for the CHIPS for America Act.
- Backlogs at major U.S. ports are predicted to continue throughout the summer and possibly longer, according to Daniel B. Maffei, chairman of the Federal Maritime Commission. Maffei noted that while the nation’s two largest ports, Los Angeles and Long Beach, were the first to experience backlogs, congested conditions are present in multiple locations. According to the Wall Street Journal, import volumes for Los Angeles and Long Beach have experienced some reductions from peaks reached in February and March, but remain significantly elevated.
- Production cuts caused by the semiconductor shortage - Ford announced additional shutdowns for the weeks of April 19 and 26 for plants in Chicago; Flat Rock, Michigan; and both the F-150 and Transit van sides of Kansas City, Missouri; output will be reduced in Avon Lake, Ohio. Ford’s Kentucky Truck plant will also be down the weeks of April 26 and May 3. Auto Forecast Solutions estimates that Ford has a cumulative production loss of 408,000 vehicles from production shutdowns caused by the semiconductor shortage.
- Stellantis has shutdowns through the end of April for Belvidere Assembly in Illinois; Windsor Assembly in Ontario, and Toluca Assembly in Mexico; the automaker’s Warren Truck plant near Detroit is scheduled to be down until the end of May, impacting the Ram 1500 Classic pickup. Brampton Assembly in Ontario is scheduled to resume production April 19, following a two-week shutdown. In addition, approximately 1,000 workers in Indiana are on furlough until May 3 due to the chip shortage.
- According to a spokesperson quoted in the Detroit News, GM has worked with its supply base to “mitigate the near-term impacts of the semiconductor situation on both Spring Hill Assembly and Ramos Assembly.” As a result, GM will resume production one week earlier than planned, on April 19, in Spring Hill, Tennessee, and the automaker canceled a previously announced production shutdown of its Chevrolet Blazer for its Ramos Arizpe, Mexico, plant.
- Ford and the UAW are partnering with Rite Aid in Michigan to implement on-site COVID-19 vaccinations at the automaker’s Flat Rock Assembly Plant, Rouge Complex, Van Dyke Transmission Plant, and Rawsonville Components Plant. Ford and the UAW will also offer on-site COVID-19 vaccinations at the automaker’s Lima Engine Plant in Ohio, and the Kansas City Assembly Plant in Missouri. An unconfirmed report claims that Stellantis' Ram pickup plant in Sterling Heights, Michigan, had a production loss of up to 300 vehicles last week due to increased worker absenteeism related to COVID-19.
- MIOSHA extended pandemic workplace restrictions for an additional six months until October 14, 2021; however, the restrictions can be modified or withdrawn at any time. The Reopen Michigan Safely coalition opposes the extension. Following the extension from MIOSHA, Ford announced in a statement: "Local guidelines continue to inform our return to workplace protocols and given the announcement by the State of Michigan, we will delay the gradual return to campus we had planned with our hybrid work model from July to October for non-place dependent workers."
- Zhejiang Geely Holding Group Co., which owns Geely Automobile Holdings, Volvo Car Group, and several other brands, is reported to be in negotiations to sponsor a special-purpose acquisition company.
- Over three dozen Michigan businesses, including GM, Ford and Stellantis, released a joint statement in opposition to bills that would implement voting restrictions in Michigan and other states. Restrictions and changes being pursued by Michigan lawmakers include reduced hours for ballot drop-offs, requiring photo identification to vote in person, and banning statewide mass mailing of absentee ballot applications.
- Aluminum and iron parts supplier Aludyne acquired the die casting division of Shiloh Industries in order to enhance capabilities in light weighting solutions. The combined entity is projected to generate revenue of over $1 billion.
Connected/Autonomous Vehicles and Mobility Services
- Continental will collaborate with Amazon Web Services on an automotive software platform, CAEdge, to help "develop, supply and maintain software-intensive system functions." The platform will become available to customers beginning at the end of 2021.
- Walmart invested an undisclosed amount in GM-backed Cruise LLC in order to support its efforts in creating a low-cost and scalable home-delivery logistics network. The $2.75 billion funding round included GM, Honda and Microsoft.
- WeRide received a permit from the California Department of Motor Vehicles to test two driverless vehicles without a safety driver behind the wheel on specified public roads in San Jose.Headquartered in Guangzhou, China, WeRide has investors including Nissan, Renault, and Mitsubishi.
- In an expanded collaboration focused on enabling autonomous driving functions, Volvo will incorporate the NVIDIA DRIVE Orin™ system-on-a-chip (SoC) technology in select vehicles beginning next year.
Electric Vehicles and Low Emissions Technology
- According to Cox Automotive, U.S. sales of battery electric vehicles reached 98,832 units in Q1 2021, representing growth of 44.8%, compared to the same period last year. Tesla accounted for 71% of EV sales in Q1 2021, down from 83% in Q1 2020. The combined category of EVs, hybrids and plug-in hybrids reached nearly 8% of the total U.S. market in the first quarter.
- IHS Markit predicts a threefold increase in battery recycling will be necessary to meet global demand for lithium-ion batteries by the end of the decade. Recent analysis projects an increase from 230 GWh in 2020 to almost 1,700 GWh by 2030, with the bulk of the growth resulting from EVs.
- Washington state lawmakers passed an amendment to E2SHB 1287, which establishes the goal that “all publicly owned and privately owned passenger and light duty vehicles of model year 2030 or later that are sold, purchased, or registered in Washington state be electric vehicles.”
- Magna International will partner with Israeli startup REE Automotive to design and build an electric vehicle using REE’s modular platform. A production timeline or location was not disclosed.
- Stellantis announced the majority of its U.S. brands will have electrified options by 2025, and fully battery-electric options by 2030; the automaker has the goal to triple global electric vehicle sales and reach over 400,000 units in 2021.
- Nikola announced a collaboration with IVECO and OGE to “develop hydrogen fueling solutions in Germany in support of the European commercial transportation system. ”IVECO is a brand of CNH Industrial N.V.; OGE owns and operates a natural gas pipeline infrastructure network in Germany.
- The National Highway Traffic Safety Administration and the National Transportation Safety Board are reported to be investigating the fatal crash of a 2019 Tesla Model S in Texas last weekend that had “no one behind the wheel. ”It is unknown whether the Autopilot feature was activated at the time of the crash.
- Ultium Cells LLC, a joint venture between GM and LG Chem, will build a second battery plant in Tennessee to supply GM’s Spring Hill Assembly plant; it will become operational in late 2023. The joint venture’s first battery cell plant in Ohio is due for completion early next year.
Prepared by Julie Dautermann, Competitive Intelligence Analyst