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
- According to estimates from LMC
Automotive, first-quarter U.S.
new light-vehicle sales reached 3.29 million units,
reflecting a 16% decline from Q1 2021. An estimated 1.25 million
units were sold in March, representing
a SAAR of 13.4 million units and a 22%
drop from March 2021.
- Major automakers reported double-digit sales
declines for first-quarter U.S. new
light-vehicle sales due to ongoing challenges
including supply chain disruptions and limited inventory.
- LMC Automotive and Cox Automotive each reduced
their full-year U.S. light-vehicle sales forecast to
15.3 million units, citing a slower pace to recovery from
market constraints.
- Global vehicle production could lose up to 1.5 million
units this year if
China's COVID-Zero policy is
maintained, according to estimates from Fitch Solutions quoted
in Bloomberg.
- Phased lockdowns beginning last week
in Shanghai in response
to COVID-19 outbreaks disrupted production for several major
automakers and suppliers.
- Recent production downtime due to the semiconductor
shortage includes: Jeep
production at Stellantis' Mack
Assembly plant in Detroit and Belvidere Assembly plant in Illinois;
Chevrolet Silverado 1500 and GMC Sierra 1500 production at GM's
Fort Wayne Assembly plant; and Mustang
production at Ford's Flat
Rock Assembly plant.
- German automakers may lose up to 150,000 units of production in March due
to supply disruptions resulting from the war
in Ukraine.
- The National Highway Traffic Safety
Administration finalized fuel economy
standards which increase fuel efficiency by 8%
annually for model years 2024-25, and 10% annually for model year
2026.
- NHTSA plans to reinstate a 2016 regulation that more
than doubled penalties for automakers failing to
meet Corporate Average Fuel Economy
(CAFE) requirements starting in the 2019 model
year.
- Electric vehicles and low emissions
technology:
-
- President Biden's proposed $5.8
trillion budget for the 2023 fiscal year includes
$757 million for "zero-emission fleet vehicles
and supporting charging or fueling
infrastructure."
- As part of its 2030 Emissions Reduction
Plan, Canada could require at
least 20% of new light-duty vehicle sales to be
zero-emission vehicles by 2026, increasing to at least 60%
by 2030 and 100% by 2035.
- Foley & Lardner provided an overview of the market
status of electromobility in Mexico.
- President Biden will invoke the Defense
Production Act to increase domestic production of
critical minerals for uses that include large-capacity batteries in
electric vehicles.
- Tesla delivered 310,048 vehicles worldwide in the first quarter, narrowly above its Q4 2021 deliveries and up by approximately 68% from Q1 2021.
- President Biden's proposed $5.8
trillion budget for the 2023 fiscal year includes
$757 million for "zero-emission fleet vehicles
and supporting charging or fueling
infrastructure."
Market Trends and Regulatory
- The Beijing auto show was postponed from late April to an
undetermined future date due to rising COVID-19
cases in China.
- The U.S. Senate again passed its version of a bill intended to
increase the nation's competitiveness with China, including a
proposal for $52 billion to boost domestic
semiconductor manufacturing. The Senate and House first
passed versions of the bill in June 2021 and February 2022,
respectively, and the legislation will require negotiation between
the chambers.
- According to Bloomberg, the Alliance for Automotive Innovation intends to file a motion in support of the EPA in a court case concerning the agency's greenhouse gas emission regulations.
OEMs/Suppliers
- First-quarter U.S. new light-vehicle
sales were down by an estimated 23% for Honda; 20% for GM; 17% for Ford; 15% for Toyota; and 14% for Stellantis.
- Recent production shutdowns due to parts shortages that were
largely unspecified but not attributed to semiconductors
include:
-
- GM idled its Lansing Grand River Assembly
plant the week of April 8, affecting production of the Cadillac CT4
and CT5 and the Chevrolet
Camaro.GM also idled its Corvette plant in Bowling
Green, Kentucky the week of March 21.
- Stellantis stopped production the week of March 28
at its minivan plant in Windsor, Ontario the week of March
28.
- Mazda will stop production at its two Japanese
plants for two days in April.
- MAN Truck & Bus SE is
experiencing production disruptions at its plants in
Germany and Poland due to shortages of truck wire harnesses from
Ukrainian suppliers.
- GM idled its Lansing Grand River Assembly
plant the week of April 8, affecting production of the Cadillac CT4
and CT5 and the Chevrolet
Camaro.GM also idled its Corvette plant in Bowling
Green, Kentucky the week of March 21.
- Stellantis plans to source more of
its semiconductors from Europe and the
U.S. within the next four years.
- Volkswagen intends to prioritize supply chain resilience, and increase its
investment in the U.S. market as part of a strategy to respond to
supply chain bottlenecks, geopolitical events and the COVID-19
pandemic.
- Plastic Omnium SA will acquire AMS-Osram AG's automotive-lighting business for 65 million euros ($72 million) in a deal that is expected to increase its portfolio of innovative lighting solutions.
Connected/Autonomous Vehicles and Mobility Services
- Aurora Innovation Inc.
and Toyota are testing an autonomous ride-hailing test
fleet of customized Sienna minivans
in Texas.
- Waymo is offering its employees in San
Francisco autonomous rides without a human safety
driver behind the wheel.
- Several U.S. lawmakers will continue efforts to pursue autonomous vehicle legislation, noting the
importance of a national regulatory framework for
AVs while acknowledging there is no immediate
movement in legislation.
- FedEx intends to reveal an "enormous effort" this summer with autonomous trucks on certain highways, while noting the initiative will not pertain to city deliveries.
Electric Vehicles and Low Emissions Technology
- Panasonic announced plans to invest 600 billion yen
($4.9 billion) from fiscal year 2023 to 2025 in areas
including automotive batteries
and hydrogen energy.
- Magna International will build a new facility in Chatham, Ontario to
produce battery enclosures for the Ford F-150
Lightning.
- As part of a contract with Oshkosh
Defense, the U.S. Postal
Service announced it will increase its initial
electric vehicle purchase from 5,000 to just over 10,000 new
electric delivery trucks.
- Hertz plans to purchase up to 65,000 electric
vehicles from Polestar over a five-year
period, and some of the vehicles will be available in North America
beginning in late 2022.
- Volkswagen will recall over 100,000 plug-in hybrids
globally due to the risk of fire caused by an "insufficiently
insulated high-voltage battery."
- Vietnamese automaker VinFast plans to build EVs for the U.S. market at
its first domestic plant in Chatham County, North Carolina
beginning in 2024.
- Volvo Trucks in North America announced its largest commercial order to
date after Maersk requested an
additional 110 Volvo VNR electric trucks following an initial
commitment of 16 units.
- Volkswagen will postpone the launch of its ID5 battery-electric vehicle by one month due to a lack of wire harnesses from Ukraine.
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