Analysis by 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 LLP's automotive
thought leaders and the Society of Automotive Analysts
(SAA) are hosting a 2023 Automotive EV Outlook at the
Detroit Athletic Club on March 21, 2023 at 4:00 p.m. Please RSVP to attend the discussion and reception
focused on resiliency and other key issues in the electric vehicle
supply chain.
- Foley & Lardner announced the launch of
its Auto Trends 2023 Series, which includes an
ongoing discussion on topics including electric vehicles,
cybersecurity developments, product liability, intellectual
property, and more. Click HERE to subscribe to the series.
- The average price for a new vehicle increased 30% since
2019, and households with an annual income above $150,000
represent nearly 30% of new vehicle purchases, according to
analysis from JPMorgan and AlixPartners excerpted in Bloomberg.
- The Biden Administration released final standards for a
national electric vehicle charging network
intended to receive funding through the Bipartisan
Infrastructure Law. The standards include the immediate
requirement that the "final assembly and all manufacturing
processes for any iron or steel charger enclosures or housing"
occur in the U.S. In addition, at least 55% of the cost of all
components must be manufactured domestically by July 2024.
- Tesla
will open a portion of its proprietary U.S. charging network to
non-Tesla vehicles, and the company plans to significantly increase
its nationwide network of Superchargers.
- Ford will invest $3.5 billion to build a battery
plant in Marshall, Michigan in partnership with China's
Contemporary Amperex Technology Co. Ltd.
(CATL).The site will add a second battery chemistry, LFP, to
Ford's offerings, and production is expected to begin in
2026.This represents the automaker's fourth U.S. production
site being built with battery manufacturers, following locations in Kentucky and Tennessee.
- Ford temporarily halted output at two plants
due to a battery issue with the F-150 Lightning
electric pickup and a quality issue with the 2023
Escape.
- The European Parliament approved a law to require new passenger cars
sold in the bloc to be zero-emission vehicles beginning in
2035.
- PwC projects U.S. EV sales could reach up to 14% of new
light-vehicle sales by 2025, and 35% of sales by
2030, according to analysis excerpted in Utility Dive this month. The analysis
also indicates EV sales in California reached 16% of total new
vehicle sales in 2022, and EV sales are approaching double-digit
percentages in a number of other states.
- Bloomberg reports cobalt
prices have fallen 50% since May 2022, and its recent
volatility demonstrates one of the challenges in establishing
contracts for battery metals. The decline was attributed to reduced
demand from the electronics sector, as well as a potential shift by
some EV battery manufacturers to chemistries which do not require
cobalt.
- Industry analysts quoted in CNBC predict a copper shortage will impact global markets this year, due to factors that include increased demand and supply constraints in certain copper-producing nations.
OEMs/Suppliers
- According to a report in The Detroit News, CEO Jim Farley said
Ford requires "fundamental change"
regarding how its vehicles are engineered, sourced and built, in
order to address a $7 billion to $8 billion cost disadvantage the
automaker has compared to certain competitors. The cost
disadvantage was attributed to a number of issues that include
higher material and warranty costs.
- GM and New-York based
GlobalFoundries announced a long-term supply agreement
intended to establish a "dedicated capacity corridor
exclusively for GM's chip supply."
- BorgWarner expects its 2023 EV revenue to increase to
$1.5 billion to $1.8 billion, from $870 million in 2022.In
December, the company announced plans to spin off its fuel systems
and aftermarket segments into a separate, publicly traded company,
to help advance its electrification goals and optimize its
combustion portfolio.
- GM will temporarily stop production the week of February 20 at its Corvette plant in Bowling Green, Kentucky, due to an unspecified parts shortage unrelated to semiconductors.
Electric Vehicles and Low Emissions Technology
- BloombergNEF estimates the cumulative value of
global electric vehicle sales over the
last ten years reached $1 trillion, with 50% of total EV
spending occurring in the last 18 months.
- PwC estimates the EV supply equipment
market will be valued at $100 billion by 2040, and
companies that install, operate or maintain charging stations will
represent 65% of the market.
- Redwood Materials received a conditional $2 billion loan commitment from
the U.S. Department of Energy for the expansion of
the company's battery recycling and remanufacturing facility in
Nevada. The funding is part of the Advanced Technology Vehicle
Manufacturing Loan Program.
- A new report from Polestar, Rivian and
consulting firm Kearney predicts the transportation
industry will fall short of decarbonization targets
outlined in the Paris Agreement unless supply chain and
manufacturing emissions decrease significantly and battery
electric vehicles (BEVs) are adopted aggressively and charged
entirely on renewable power.
- Bank of America will offer consumers the option of
financing residential electric vehicle chargers as
part of a new option for auto loans.
- Bloomberg reports GM
is considering acquiring a stake in Brazilian miner
Vale's base metals unit, which was created to
pursue growth opportunities in metals such as
copper and nickel. Last year, GM
announced an agreement with subsidiary Vale
Canada for the long-term supply of battery-grade nickel
sulfate.
- Hyundai launched a short-term EV subscription program
in the U.S. starting at $699 per month. The Evolve+ program is
intended to introduce consumers to the automaker's EV brands
without the commitment of a purchase or longer-term lease.
- CALSTART estimates 5,480 new full-size zero-emission
transit buses were on the road, on order or funded in the U.S. in
2022, representing a 66% increase over the previous year. The
clean transportation advocacy nonprofit indicates
battery-electric buses remain more common than
fuel cell electric buses due to factors that
include cost, infrastructure, and owner or operator preference. The
top five states for adoption of zero-emission buses are California,
New York, Florida, Texas and Massachusetts.
- ChargePoint Holdings and Stem
will use AI-supported energy management to
lower operating costs and improve resiliency for highway corridor
fast-charging networks.
- Specialty vehicle manufacturer The Shyft Group
intends to invest $16 million to produce all-electric
delivery vehicles at its facilities in Charlotte, Michigan.
- GM's Cadillac brand intends to begin
production of three new EV models during calendar year 2024,
and more details will be announced later this year. The brand
currently produces the electric Lyriq crossover,
and the ultra-luxury "hand-built"
Celestiq will launch toward the end of 2023.
- Stellantis is accepting reservations for the upcoming Ram 1500 REV battery-electric truck, and the vehicle will begin sales in 2024.
Automated, Autonomous or Connected Vehicles Technologies
- Amazon's Zoox began operating
autonomous shuttles on public roads for
the first time by offering its employees rides on a route
between its Foster City offices during business hours.
- Uber established cloud services agreements
with Google and Oracle, as part of an effort by the rideshare
company to focus on core initiatives and shift away from using its
own data centers.
- Two U.S. senators are urging the Federal Communications Commission to approve pending waiver requests to enable the deployment of cellular vehicle-to-everything (C-V2X) technology in the 5.9 GHz spectrum band, according to a report in Transport Topics. In 2020, the FCC reassigned a portion of the 5.9 GHz spectrum for unlicensed uses such as Wi-Fi content providers.
Market Trends and Regulatory
- President Biden announced plans to nominate Ann Carlson to
lead the National Highway Traffic Safety
Administration. Carlson has been acting administrator
since the departure of Steven Cliff last year.
- The annual J.D. Power Vehicle Dependability Study ranked
Lexus highest overall, and Kia
held the top position for the highest performing mass-market
brand.
- Consumer Reports' annual ranking of top automotive brands listed the top ten as BMW, Subaru, Mini, Lexus, Honda, Toyota, Genesis, Mazda, Audi and Kia, according to The Detroit News.
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