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- GM scheduled downtime
for the week of July 26 at three pickup truck plants in
Michigan, Indiana and Mexico due to the
- Stellantis and Daimler
expect the chip shortage to continue into 2022; Faurecia and Valeo indicate
Q2 represents the peak of the chip shortage, with
gradual improvement beginning in the coming quarters.
- Industry groups, including the Motor & Equipment
Manufacturers Association and the Alliance for
Automotive Innovation, urged Congress to
finance the CHIPS Act and strengthen domestic
semiconductor manufacturing in the U.S.
- GM returned to a
mandatory mask requirement at its Wentzville, Missouri,
plant due to rising COVID-19 cases in the
community; the move comes less than two weeks after the
UAW and Detroit Three automakers ended mask
requirements for fully vaccinated union-represented workers in the
- Magna International will acquire
Veoneer Inc. for $3.8 billion in an effort to help
expand its capabilities in advanced driver assistance
- ZF announced its
Marysville, Michigan, facility was awarded a nearly $6
billion contract to supply solid beam axles until 2027 for
an undisclosed automaker.
- The Alliance for Automotive Innovation is seeking an accelerated
ruling following a bench trial over Massachusetts'
"Right to Repair" law in federal court; the
trade association indicated that an expansion of the law risks
damaging automakers' relationship with consumers.
- Consumer Reports said last week
that Tesla Inc.'s "Full Self-Driving"
software lacks safeguards and expressed concern
for the system's performance and safety on public roads.
- Electric vehicles and low emissions
- Bloomberg predicts EV
batteries will be the next significant supply chain constraint for
the auto industry, as demand for certain raw materials,
including lithium products, exceeds supply.
- Prices for certain EV battery materials have
increased by double digits this year, and
Benchmark Mineral Intelligence expects "most
battery raw material markets to remain tight this
- GM is recalling its
all-electric Chevrolet Bolt for the second time
due to manufacturing defects in a certain battery
cell that could cause fires; nearly
69,000 vehicles from model years 2017-2019 are impacted.
- Daimler plans to invest
40 billion euros ($47 billion) in battery electric
vehicles between 2022 and 2030, and from 2025, all
Mercedes-Benz "newly launched vehicle
architectures will be electric-only."
- EV startup Rivian announced the closure of a $2.5 billion fundraising round led by investors, including Amazon, Ford, and T. Rowe Price.
- Bloomberg predicts EV batteries will be the next significant supply chain constraint for the auto industry, as demand for certain raw materials, including lithium products, exceeds supply.
Market Trends and Regulatory
- In a letter last week,
industry groups, including the Motor & Equipment
Manufacturers Association, the Alliance for
Automotive Innovation, the UAW, and the
Semiconductor Industry Association urged Congress
to finance the CHIPS Act and to prioritize
"strengthening the U.S. position in semiconductor research,
design, and manufacturing." The CHIPS Act became law earlier
this year as part of the 2021 defense bill, but the legislation was
never funded. The Senate passed bipartisan
legislation in June that includes a $52 billion
investment to bolster the semiconductor industry in the
U.S. as part of a broader package to strengthen the
nation's competitive position in science and technology and
last week, the Biden administration indicated it was "putting
plans in place" to invest the $52
billion in semiconductor research and manufacturing.
- Low inventory and strong consumer demand have
resulted in reduced overhead and
increased profits for dealers such as
AutoNation and Lithia Motors, but
strategies for determining inventory levels post-pandemic are a
continuing topic of debate within the industry.
- Current reports indicate that Malaysia will not extend a national state of emergency when it ends on Aug 1. In June, Honda and Toyota suspended production in Malaysia after the government issued a Movement Control Order in response to escalating COVID-19 cases. The nation's COVID cases recently surpassed a cumulative total of one million, and it's estimated that 36% of the population has received a single dose of a vaccine.
- Production impact of the semiconductor shortage
- GM will cut pickup truck
production at three plants the week of July 26, with production
scheduled to resume August 2: Flint Assembly
plant in Michigan will operate with one
shift, impacting production of the Chevrolet Silverado HD and GMC
Sierra HD trucks; Ft. Wayne Assembly plant in
Indiana and Silao Assembly plant
in Mexico will have production shutdowns impacting
models including the Chevrolet Silverado 1500 and GMC Sierra
- BMW stated last week
that nearly all its German plants are affected by the chip
shortage, and, as a result, the automaker is
unable to complete production of nearly 10,000
- Daimler cut it sales outlook due to the chip
shortage, noting that in spite of strong demand reflected
in Q2 results,
Mercedes-Benz sales are now expected to be flat this
year instead of up significantly from 2020.CFO Harald
Wilhelm indicated the
chip shortage will continue in 2022, but with less
- At an event last week with the Automotive Press Association in
Detroit, Stellantis CEO Carlos Tavares said the automaker
is pursuing options to change the diversity of chips it intends to
use, adding that roughly 18 months are required to
reengineer a vehicle to use a different chip due to the
complexity of the technology. Tavares also expects the
chip shortage to easily extend into next year, noting the
industry is lacking "enough signs that additional
production from the Asian sourcing points is going to come to the
West in the near future," and that visibility around
chips is "not great."
- Volvo reported its best
half-year results in the company's history, but noted that
sales for the second half of the year are expected to be
flat compared to 2020 "unless the supply of semiconductors
- BMW stated last week that nearly all its German plants are affected by the chip shortage, and, as a result, the automaker is unable to complete production of nearly 10,000 vehicles.
- ZF Friedrichshafen estimates it will take
months to return to full production at its suspension parts plant
in western Germany that was impacted by severe
flooding in the region.
- Faurecia and Valeo confirmed
2021 full-year sales targets after reporting higher first-half
sales and profits: Faurecia intends to
achieve full-year sales of at least 16.5 billion euros ($19.5
billion), and CEO Patrick Koller stated the company
was "convinced that automotive production has hit
a low in Q2 and should gradually rebound in coming
quarters."Valeo's 2021 guidance predicts
sales of between 17.6-18.2 billion euros, and CEO Jacques
Aschenbroich expects that
the industry is at the peak of the chip shortage,
with gradual improvement beginning by the end of the year.
- The current VP of Amazon's Alexa
Automotive division, Ned Curic, has been named as the
new chief technology officer at Stellantis,
effective August 30.GM announced the
appointment of several executives formerly in roles at Postmates,
Lyft, and Chinese EV maker NIO to its BrightDrop commercial
- GM filed a trademark infringement suit against Ford over the use of the name BlueCruise for its hands-free highway driving system. Ford announced the rollout of BlueCruise earlier this year; GM launched Super Cruise in 2017, and acquired its majority-owned self-driving unit Cruise in 2016.
Connected/Autonomous Vehicles and Mobility Services
- Ford and Argo AI will introduce an
autonomous ride-hailing service with Lyft in
Miami later this year, with Austin to follow next year. The
companies intend to eventually reach 1,000 autonomous vehicles on
the Lyft network in multiple locations over the next five
- Intel subsidiary Mobileye began testing autonomous
vehicles in New York City with a safety operator behind the
wheel; the vehicles have 12 cameras powered by the company's
EyeQ5 system on chip.
- A new report from Guidehouse Insights predicts that global deliveries by low speed automated delivery vehicles (ADVs) will increase from less than 7 million deliveries in 2021 to over 51 billion by the end of the decade, as the market for ADVs is boosted by online retailers and efforts to reduce emissions. [Press release only; full report not publicly available]
Electric Vehicles and Low Emissions Technology
- In a new strategic plan for
EVs announced last week, Daimler said its main
car brand Mercedes-Benz "will be ready to go
all electric at the end of the decade, where market conditions
allow." The automaker also plans to partner with other
companies to build eight battery plants, in
anticipation of requiring battery capacity of over 200 gigawatt
- Rivian is reported to be considering locations
for a second U.S. manufacturing facility with
construction potentially starting next year, according to unnamed
sources in Reuters.
- Tesla intends to
open its fast-charging network to other EVs later
this year; a timetable was not provided for specific locations. The
company is estimated to have over 25,000 superchargers
- EV maker Lucid Motors began trading on the
Nasdaq this week following the closure of its SPAC deal with
Churchill Capital IV. Lucid intends to position itself as a
competitor to Tesla, and plans to start production of its
first vehicle, the Lucid Air, later this
- Hydrogen fuel-cell truck maker Hyzon Motors began trading on the
Nasdaq last week following a SPAC deal with Decarbonization
Plus Acquisition Corp. Hyzon will initially focus on heavy-duty
trucks in Europe, but plans a "substantial uptake in
the U.S. market" in the second half of 2022.
- As auto manufacturers explore options in preparation of
pivoting from internal combustion engines to electric
components, The Wall Street
Journal predicts the transition to electric
vehicles will significantly alter the
industry's supply chains and workforce.
- Toyota opposes an aggressive acceleration toward full electric cars, in favor of a greater focus on gas-electric hybrids as a medium-term solution before reaching a fully electrified future, according to a recent article in The New York Times.
Prepared by Julie Dautermann, Competitive Intelligence Analyst
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