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
- The most recent article in Foley &
Lardner LLP's Auto Trends 2023 Series assessed a number of
the National Highway Traffic Safety
Administration's recent enforcements, investigations
and reviews pertaining to safety standards and emerging
technologies. Click HERE to subscribe to the series.
- Foley & Lardner provided an overview of the potential implications of
upcoming labor contract negotiations between the
UAW and Detroit's Big Three
automakers.
- U.S. new light-vehicle sales are projected to
reach 1.3 million units in May, representing a SAAR of 14.8 million
units, according to a joint forecast from J.D. Power and LMC Automotive.
- Foley & Lardner reviewed the fast-changing industry dynamics
contributing to an uncertain outcome for the U.S. Environmental
Protection Agency's 2023 renewable fuel standard (RFS)
proposal.
- As part of a 50-50 joint venture announced May 26, Hyundai and
LG Energy Solution will invest $4.3 billion to
build a battery plant in proximity to the automaker's upcoming
EV factory in southeast Georgia. Hyundai also has a battery cell
production joint venture with SK On in Bartow County,
Georgia.
- Ford's electric vehicle customers will
gain access to Tesla Superchargers in North
America beginning in 2024 through a Tesla-developed adapter, as
part of an agreement between the two companies. In
addition, Ford will equip its EVs with the North American Charging
Standard (NACS) port beginning in 2025, eliminating the need for an
adapter.
- PwC predicts the U.S. will establish 58 million electric vehicle charge points by 2040, up from approximately 4 million in 2023. The analysis also indicates EV load could account for 9% to 12% of projected U.S. grid capacity by 2040.
OEMs/Suppliers
- Plante Moran's 2023 North American Automotive
OEM-Supplier Working Relations Index Study found that Toyota and Honda again held the top
two positions in spite of slight declines in WRI scores, while GM,
Nissan and Stellantis improved their positions. The study also
reveals "rising tension over increased risk related to
short-term cost-recovery issues, production scheduling, and supply
chain disruptions as the industry transitions to electric
vehicles."
- Toyota announced a memorandum of understanding (MoU) to establish a merger of "equal footing" between its truck manufacturing subsidiary Hino Motors and Daimler's Mitsubishi Fiso Truck and Bus. The deal is intended to facilitate the development of advanced technologies.
Electric Vehicles and Low Emissions Technology
- A significant portion of public EV chargers need to
improve reliability before charging infrastructure can
achieve a successful broader rollout, according to commentary from
J.D. Power featured in Bloomberg on May 18. Analysis from
J.D. Power excerpted in Utility Dive earlier this year found
that more than one in five charging attempts fail
due to malfunctioning or out-of-service chargers.
- The lack of adequate EV charging infrastructure in the U.S. was
a key theme discussed during the annual
Forth Roadmap Conference held May 15–17 in
Portland, Oregon. After ten years on the west coast, this
conference will be held in Detroit in 2024.
- Ford formed supply agreements
with Albemarle, SQM, Nemaska Lithium, EnergySource Minerals, and Compass Minerals to secure
lithium from projects in Canada, Chile, California
and Utah, according to separate announcements on May 22.
- The Wall Street Journal reports
global automakers may encounter new challenges and
risks as a result of establishing more direct involvement
with mining companies, amid efforts to secure adequate
supplies of EV battery materials such as lithium, nickel and
graphite.
- Toyota Research Institute's chief
executive, Gill Pratt, indicated the transition to
fully-electric vehicles will take more time than people currently
expect, and emissions reduction in the near-term will
require a variety of technologies including hybrid vehicles. Pratt
also stated, "Eventually, resource limitations will end,
but for many years we will not have enough battery material and
renewable charging resources for a BEV-only
solution."
- A report in
The New York Times (subscription) indicates nations
may require decades to approach China's
capabilities in lithium-ion battery production in
regards to mining and processing raw materials, and
cost-effectively producing components at scale.
- According to Reuters, Panasonic
plans to roughly quadruple its annual battery production capacity
by the end of the decade to support rising demand for EVs.
- Rapid battery swapping sites
could be a viable solution for delivery and fleet
vehicles that cannot have extensive downtime to charge
vehicles, according to a report in Bloomberg.
- A nearly 900-mile Binational EV Corridor
established between Kalamazoo, Michigan and Quebec City, Quebec
will provide DC (direct current) fast chargers at every 50 miles,
according to an announcement by government
officials on May 16. The timetable for installing all the chargers
was unclear at the time of this newsletter's publication.
- GM announced its all-electric 2024 Chevrolet
Silverado work truck will have a range of up to 450 miles on a full
charge, and an upcoming retail version of the pickup will have a
range of up to 350 miles.
- Stellantis' venture capital arm invested an undisclosed amount in
California-based lithium-sulfur battery technology developer
Lyten Inc.
- Federal and provincial governments in Canada will contribute approximately $220 million to an upcoming GM-Posco EV battery materials joint venture plant in Quebec.
Automated, Autonomous or Connected Vehicles Technologies
- As part of a new multiyear partnership, Uber will use
Waymo vehicles for its ride-hailing and food
delivery platform beginning in Phoenix later this year.
- The U.S. Department of Transportation's Federal Highway
Administration awarded a $9.85 million grant to the
University of Michigan in Ann Arbor to conduct
connected-vehicle technology research.
- NVIDIA will partner with fabless semiconductor company MediaTek to develop chipsets for automotive infotainment and in-cabin convenience and safety applications.
Market Trends and Regulatory
- Over 2.5 million U.S. vehicles are under "do not
drive" or "park outside" safety recalls
that remain unrepaired, according to analysis from online vehicle marketplace
provider Carfax.
- President Biden is expected to veto Congressional legislation
that is attempting to overturn recent U.S. Environmental Protection
Agency emission standards for heavy-duty
vehicles.
-
Reuters reports the California Air Resources
Board (CARB) requested U.S. EPA approval for a plan to
require all new vehicles sold in the state to be zero emissions by
2035. CARB approved the Advanced Clean Cars II rule in
August 2022.
- A federal judge denied an industry group's request for a
temporary restraining order to block the anticipated June 2023
enforcement of Massachusetts' "right to
repair" law, amid numerous delays to a ruling for an
ongoing lawsuit concerning its implementation.
- The Biden administration withdrew its nomination of Ann Carlson to head the National Highway Traffic Safety Administration. Carlson was named acting head of NHTSA in September 2022, and formally nominated in March.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.