Analysisby Julie Dautermann, Competitive Intelligence Analyst
This update helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. Contact your Foley relationship partner, or Ann Marie Uetz, Vanessa L. Miller, or Nicholas J. Ellis, to follow up.
Key Developments
- Foley & Lardner provided an overviewof recent developments in
design patent protection for automotive
component parts.
- Projections for 2023 U.S. new light-vehicle
sales are in the range of 14.1 million units to 14.9
million units, according to estimates from Cox Automotive, Edmunds and LMC Automotive.
- New vehicle inventory at the end of November was up by approximately
80% compared to the same period one year ago, but supply remains
low when measured by pre-pandemic standards.
- According to analysis from PwC, global automotive
M&A deal volumes from January to mid-November 2022
were down by 18%, and deal value fell by 62%
compared to performance in 2021. PwC expects automotive deal
volumes to "remain stable" in 2023, amid a disciplined
environment for capital deployment resulting from inflation and
higher interest rates.
- Stellantis will indefinitely idle production at its Jeep Cherokee assembly
plant in Belvidere, Illinois, in a decision attributed to factors
including increased costs related to vehicle electrification.
- New analysis from the American Transportation
Research Institute predicts full electrification of the
U.S. vehicle fleet would require 40.3% of the nation's existing
electricity generation, on average, of which 26.3% would
support passenger vehicles and 14% would support freight
trucks.
- The Treasury Department and Internal Revenue Service issued a Revenue Procedure which clarifies
certain processes pertaining to the Inflation Reduction Act's
electric-vehicle tax credits for qualified
manufacturers' written agreements and reports. On Dec. 19, the
Treasury Department announced it will issue proposed
guidance for critical mineral and battery
component requirements in March 2023.
- The United Auto Workers won an election at the Ultium
Cells battery plant in Ohio, with 710
employees voting in favor of union representation and 16
opposed.
- BloombergNEF estimates lithium-ion battery pack
prices increased 7% during 2022, and prices are projected
to remain elevated until sometime in 2024 due to supply limitations
and higher costs for materials such as cobalt, nickel and
lithium.
- Gabe Klein, Executive Director of the Joint Office of
Energy and Transportation, estimated $90 billion in
infrastructure investments will be required to meet the
Biden administration's goal to establish a nationwide network
of 500,000 charging stations. The remarks occurred during the
recent White House Electrification Summit, which
focused on opportunities and the required infrastructure upgrades
related to the electrification of transportation and buildings. The
Joint Office of Energy and Transportation is preparing to finalize
rules and minimum standards for chargers installed using $7.5
billion in funding from the Bipartisan Infrastructure Law.
- The California Energy Commission approved a $2.9 billion plan to install 90,000 new EV chargers across the state, which is more than double the 80,000 chargers already installed. The state intends to reach installations of 250,000 chargers by 2025.
Market Trends and Regulatory
- A new report from the U.S. Environmental
Protection Agency found the "average estimated
real-world CO2 emission rate" for all new model year 2021
vehicles fell to 347 g/mi, representing a decrease of 25% since
2004.Real-world fuel economy was 25.4 mpg fleetwide, which is
unchanged from the 2020 model year, but down by 32% since 2004. The
report also indicates the Detroit Three automakers produced
vehicles with higher emissions and lower fuel economy for model
year 2021 vehicles when compared to a number of their
competitors.
- The National Highway Traffic Safety Administration opened a probe into the autonomous driving system used by GM business unit Cruise, following reports the vehicles may become "immobilized while operating" or engage in "inappropriately hard breaking."
OEMs/Suppliers
- Magna announced plans to acquire Veoneer
Active Safety from investment firm SSW Partners for $1.53
billion in cash. The deal is expected to enhance Magna's
capabilities in Advanced Driver Assistance Systems (ADAS).
- A decision by Stellantis to scale back its
manufacturing footprint in China occurred amid a
broader trend of increased competition to global automakers from
Chinese brands, according to a report in The Wall Street Journal.
- The Insurance Institute for Highway Safety
found 15 out of 20 automakers have fulfilled a voluntary commitment to equip
nearly all the light vehicles they produce for the U.S. market with
automatic emergency braking (AEB).
- According to an update from the UAW, a British report released this month suggests a number of major automotive brands could have potential supply chain exposure to forced labor in China's Xinjiang region.
Connected/Autonomous Vehicles and Mobility Services
- Apple is reported to be no longer pursuing a
fully autonomous system for the debut of its electric self-driving
car, and the future vehicle's launch has been pushed back to
2026, according to unnamed sources in Bloomberg.
- Motional and Uber
Technologies announced plans to launch a public robotaxi
service in Las Vegas in 2023.The launch is part of a 10-year
partnership between Uber and the autonomous driving joint venture
of Hyundai Motor and Aptiv Plc.
- As part of a new strategic partnership, Volvo Autonomous Solutions will provide autonomous freight capacity to Uber Freight shippers beginning on select routes in Texas.
Electric Vehicles and Low Emissions Technology
- Hyundai and South Korean battery maker
SK On plan to invest $4 billion to $5 billion to
build a new electric vehicle battery plant in Bartow County,
Georgia. The automaker recently broke ground on a $5.5 billion electric vehicle
and battery plant in Bryan County, Georgia.
- Battery materials recycler Redwood Materials
will invest $3.5 billion to develop a site
near Charleston, South Carolina, with the goal to eventually
manufacture enough critical battery components to power more than a
million electric vehicles a year. This represents the company's
second site in addition to its battery-materials plant in northwest
Nevada.
- Lear will establish a manufacturing site in
Independence Township, MI to produce electric vehicle battery
disconnect units and interconnect cell boards. The Michigan
Economic Development Corp. approved incentives for this project,
which is one of several expansion projects the company has planned
in the state.
- Ford added a third shift at its plant in Dearborn,
Michigan, for the purpose of increasing production of the
F-150 Lightning electric pickup. Ford previously
indicated it will target F-150 Lightning annual production volumes
of 150,000 by the third quarter of 2023.
- Panasonic will supply EV maker Lucid
Group with lithium-ion batteries as part of new multi-year
sourcing agreement.
- Canadian electric vehicle charging company FLO
started production at its new $3 million
assembly and testing facility in Auburn Hills, Michigan last week.
The company estimates it will achieve sales of 250,000 chargers by
2028.
- Toyota and Texas-based electric transmission
and distribution company Oncor Electric Delivery
will collaborate on a pilot project involving
vehicle-to-grid technology (V2G).
V2G may help EVs send energy from their batteries back onto the
electric grid.
- South Korea-based charging company Chaevi opened an office in Silicon Valley and plans
to build an ultra-fast network of charging stations in the
U.S.
- Vietnam-based EV manufacturer VinFast filed for an initial public offering in the
United States.VinFast exported its first batch of VF 8 crossovers
to the U.S. this month, and the company hopes to begin production
in 2024 at an upcoming manufacturing plant in North Carolina.
- Investors including Microsoft's Climate
Innovation Fund participated in a $214 million Series C funding round in
silicon battery startup Group14
Technologies. The Washington-based company indicates its
silicon-carbon technology is more efficient than existing graphite
technology, and it could result in more powerful batteries for
markets including EVs.
- Envision AESC will invest $810 million to build a new
battery manufacturing plant in Florence County, South Carolina in
support of its multi-year partnership with
BMW.
- Mahindraplans to invest$1.2 billion to establish an electric vehicle manufacturing plant near Pune, India.
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