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 partnered with OESA to present
the webinar, Export Controls on
Russia and the Impact on Automotive Suppliers. Foley
partners Ann Marie Uetz, Christopher Swift, and Mike Walsh discussed how Russia's
invasion on Ukraine is impacting the global automotive supply
chain, export controls, and government-imposed sanctions, and how
suppliers can assess the potential risks before conducting any
commercial and financial transactions with Russian parties.
- Foley & Lardner LLP Partner Vanessa
Miller is quoted in the article, "Economic Dangers from Russia's Invasion Ripple
Across the Globe," by The Associated Press discussing
the broader economic implications of Russia's
invasion of Ukraine, as well as the direct
impact the situation will have on global supply
chains. ABC News Online and U.S. News and World Report also ran the
article.
- Foley & Lardner Partners Gregory
Husisian, Michael J. Walsh, Jr. and Christopher Swift
provided overviews of U.S.
sanctions and export controls imposed
on Russia in response to the Russian invasion of Ukraine.
- According to the Center for Automotive Research, the crisis
in Ukraine may result in shortages and
price increases for neon
gas, palladium, aluminum
and nickel.
- Numerous automakers suspended business activities in Russia,
and several European auto plants reduced or stopped production due
to the inability of getting parts from suppliers
in Ukraine.
- U.S. new light-vehicle sales
in February reached a SAAR
of 14 million units, representing a decline of
approximately 12% from the same period last year according to
estimates from LMC Automotive.
- Foley & Lardner LLP Senior Counsel
Connor Sabatino was featured in the article, "Technology Leads with Future In-House Dealership
Models," in TU Automotive discussing
the legal challenges automakers face in establishing
their own dealerships.
- Carvana announced plans to
acquire ADESA's U.S. physical auction
business for $2.2 billion, in a deal that could have significant
impact on the competitive landscape for the nation's
used-vehicle market.
-
Subaru and Kia disabled wireless telematics systems from
their new models in Massachusetts due to uncertainty over legal challenges to the implementation of
the state's "right to repair" law.
- Ford is idling production at plants in Kentucky
and Ohio this week due to the chip shortage,
affecting models including Super Duty Trucks, the Expedition SUV
and Lincoln Navigator SUV. Last week Ford also shut down F-150 pickup truck
production at its Kansas City Assembly Plant in
Missouri and reduced production at Kentucky Truck.
- The U.S. EPA proposed new
standards to lower nitrogen-oxide
emissions from heavy-duty vehicles and engines
and update greenhouse gas (GHG)
standards for certain commercial vehicle
categories.
- Intel's self-driving car
business Mobileye has filed
confidentially for an initial public offering.
- Foley & Lardner's automotive thought leaders and the
Society of Automotive Analysts (SAA) on March 23 will host an
in-person event, 2022 Automotive Industry Legal
Outlook, an analysis of timely business and legal
issues facing the automotive industry this year. Key areas of focus
outlined in Foley's Annual Automotive White Paper include
critical considerations and anticipated hurdles as the industry
continues its transition to electric vehicles, sustainability, and
heightened enforcement of international regulations. .
- Electric vehicles and low emissions
technology:
-
- Foley & Lardner attorneys Peighton M.
Bruno and Chethan K. Srinivasa provided a summary of market conditions that will
contribute to increased adoption of EVs.
- Ford will reorganize into separate business
units for its EV and ICE vehicles, and the automaker will increase
its EV investment to $50 billion between 2022 and 2026.CEO Jim
Farley recently stated the company does not
plan to spin off its electric vehicle business, but it
will require different talent and less structural
complexity in order to ramp up EV and software
sales.
- Honda
and Sony will establish a joint venture to develop
and design an electric vehicle that Honda will manufacture, with
the goal to begin sales by 2025.
- Jeep is planning a line of battery-powered SUVs with its first model due next year, and additional models by 2025. Parent company Stellantis recently announced the goal to become carbon neutral by 2038.
- Foley & Lardner attorneys Peighton M.
Bruno and Chethan K. Srinivasa provided a summary of market conditions that will
contribute to increased adoption of EVs.
Market Trends and Regulatory
- NHTSA announced proposed updates to
its New Car Assessment Program (NCAP), which
include adding four ADAS technologies, as well as changes to the
test procedure and performance criteria for ADAS
technologies.
- Revisions to the federal government's Buy
American program will raise the domestic content
requirement from its current level of 55% to 60% this year. The
final rule will increase the threshold to 65% in 2024 and 75% in
2029.
- Texas and over a dozen other
states filed suit against the U.S.
EPA in an effort to review the agency's
recently finalized rule applying to federal
greenhouse gas (GHG) emissions standards for passenger cars and
light trucks.
- Sixty-five models received the Top Safety Pick+ award in
the Insurance Institute of Highway
Safety's initial ranking of 2022 model year
vehicles, compared to 49 models one year ago.
- In January, over 80% of new vehicle consumers in the
U.S. paid more than the manufacturer's
suggested retail price.
- A recent blog post from Foley &
Lardner Partner Jeffrey A. Soble comments on factors
contributing to the ongoing microchip
shortage, including signs that significant sources of new
supply may not be available in the immediate future.
- LMC Automotive indicated that nearshoring chip production may be part of a longer-term strategy for North American automakers, while noting there is no "quick-fix solution" to increasing access to microchip supplies.
OEMs/Suppliers
- Tenneco Inc. will be acquired by affiliates
of Apollo Global Management Inc. in a deal
that has an enterprise value of $7.1 billion, including debt.
- Magna announced a joint venture
with LAN Manufacturing to assemble seats
for Ford trucks and SUVs at a leased facility in Detroit beginning
in the second quarter of 2023.
- Bosch will invest an additional €250
million to expand chip production
capabilities at its Reutlingen plant
in Germany.
- In its first year after the merger of Fiat Chrysler Automobiles
and PSA Group, Stellantis reported a net profit of €13.4
billion and net revenue of €152 billion.Double-digit margin
growth is forecast in FY 2022 guidance.
- Toyota resumed production after a suspected
cyberattack at a supplier resulted in a temporary shutdown of the
automaker's plants in Japan.
- A COVID-19 Joint Task Force, consisting
of the UAW, Ford, GM and Stellantis, will adopt new guidance from the Centers
for Disease Control and Prevention to make mask
wearing optional at facilities located in counties that are not at
high risk for COVID-19.
- Ford postponed its return-to-office plans to April for many of its salaried employees who are not site-dependent, reflecting a delay of approximately one month.
Connected/Autonomous Vehicles and Mobility Services
- Aptiv – Hyundai joint
venture Motional and ride services
company Via announced the launch of a free autonomous
taxi service in Las Vegas.
- Bosch will acquire 3D-mapping
company Atlatec GmbH in a deal that is
expected to enhance the supplier's development of autonomous
driving systems.
- Audi partnered with Verizon to
add 5g connectivity to the automaker's vehicles by 2024.This
represents Verizon's first 5g automotive deal.
- Autonomous technology developer Embark
Trucks partnered with real estate
investor Alterra Property Group to
enhance its access to transfer points in key freight markets.
- The California Public Utilities Commission
(CPUC) issued permits to GM
unit Cruise and
Alphabet's Waymo to allow passenger
service in autonomous vehicles with a safety driver present.
- Ford will sell its electric bike and scooter division, Spin, to Berlin-based Tier Mobility for an undisclosed sum.
Electric Vehicles and Low Emissions Technology
- Dana Inc. plans to open a $9 million
electric vehicle tech center in Novi, Michigan, where
it will add up to 150 engineers and supporting positions.
- Hyundai announced plans to invest 19.4 trillion
won ($16 billion) in electrification, introduce 17 new battery
electric vehicle models and reach annual BEV sales of 1.87 million
units by 2030.
- Polestar announced it will collaborate with
suppliers
including Autoliv and ZF to
develop a climate-neutral vehicle by 2030.
- Lucid reduced its 2022 electric vehicle
production target by at least 30% due to logistical and supply
chain challenges.
- Tesla received conditional approval to begin
production at its new plant in Germany, subject to inspections and
a public objection period.
- Volkswagen will begin construction next year at a
new €2 billion EV plant in Wolfsburg, located in proximity to
its global headquarters.
- GM and POSCO Chemical will begin construction this year of a $400 million battery materials plant in Quebec.
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