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
- U.S. new light-vehicle sales in
June are forecast to reach a SAAR of 13.1
million units, representing a decline of 2.3 million units
from the same period last year, according to projections by J.D. Power and LMC Automotive.
- AlixPartners predicts automotive supply
constraints will persist through 2024,
leading to operating inefficiencies and straining supplier
profitability amid the continuation of strong consumer
demand.
- Automotive News (subscription) released its annual ranking of top global
suppliers.
- According to PwC's 2022 Deals
Midyear Outlook, global automotive M&A in the 2022 YTD
period reached 245 deals and a deal value
of $28 billion, representing declines of 55% and 62%,
respectively.
- A Foley & Lardner blog post indicates auto industry
representatives are expressing renewed attention to certain funding
and tax provisions within President Biden's Build Back
Better proposal.
- U.S. new-vehicle inventory remained at
consistent levels and reached 1.13 million units at the end of last
month, reflecting a 34 days' supply, according to estimates from Cox Automotive.
- Proponents of autonomous trucking indicate the pace of adoption in the U.S. may
develop more rapidly than autonomous passenger vehicles, while
noting the technology may be best suited for specific circumstances
such as highway driving in good weather conditions.
- Electric vehicles and low emissions
technology:
-
- The Alliance for Automotive Innovation estimates nearly 200,000 EVs were sold
in the U.S. in the first quarter of 2022, reflecting an
increase of 54% from the same period last year and accounting for
5.9% of overall light-vehicle sales in the
quarter. EVs continue to represent under 1% of all
vehicles operating on U.S. roads, at just over 2.35 million
units.
- Edison Electric Institute predicts EVs will represent nearly 10%
of light-duty vehicles operating on U.S. roads by 2030,
reaching a total of approximately 26.4 million units.
- Automakers including Ford, GM
and Tesla are raising prices for electric vehicles amid
rising costs for raw materials and increased consumer interest in
EVs.
- Foley & Lardner addressed key points of the U.S. Department of
Transportation proposal to establish minimum standards
for federally funded EV charging infrastructure
projects.
- According to Sen. Debbie Stabenow (D-MI) quoted in The Detroit News, a proposed
tax credit for union-made electric vehicles will not be
included in an upcoming Senate climate package due to insufficient
support among lawmakers.
- A new report by Securing America's Future Energy (SAFE) and the Electrification Coalition emphasizes the need to increase electric grid resilience and pursue technologies such as vehicle-to-grid (V2G) in preparation for growing adoption of electrified transportation.
- The Alliance for Automotive Innovation estimates nearly 200,000 EVs were sold
in the U.S. in the first quarter of 2022, reflecting an
increase of 54% from the same period last year and accounting for
5.9% of overall light-vehicle sales in the
quarter. EVs continue to represent under 1% of all
vehicles operating on U.S. roads, at just over 2.35 million
units.
Market Trends and Regulatory
- The National Highway Traffic Safety
Administration released
new data on crashes involving vehicles using automated
driving systems (ADS) and Level 2 advanced driver
assistance systems (ADAS).Since July 2021, 130 crashes
involved ADS-equipped vehicles, and 367 cars involved Level 2
ADAS-equipped vehicles. However, the agency cautioned that more
analysis is needed to understand the role of the technologies in
vehicle crashes.
- The National Association of Manufacturers
expressed concerns with President Biden's proposal
to suspend federal gasoline and diesel taxes for three
months, noting the taxes are an important funding source
for the Bipartisan Infrastructure Law. NAM also indicated more
effective approaches include strengthening and expanding domestic
energy production.
- Gasoline sales at U.S. stations declined 8.2% in the first week of June compared to the same period last year, indicating consumers may alter certain driving behaviors in response to average prices that are nearly $2 per gallon higher than last year.
OEMs/Suppliers
- Toyota reduced its July global production plan by
50,000 vehicles in response to semiconductor shortages and
COVID-related supply disruptions.
- Japan's major automakers are taking steps to absorb some of
the burden of rising raw materials costs to reduce
the strain on suppliers, according to a report in
Reuters.
- The COVID-19 Joint Task Force, comprised of
the UAW, Ford, General Motors and Stellantis, announced face masks will be
optional at their respective U.S. facilities.
- An arbitrator determined Stellantis must end its COVID-19 vaccine mandate for Canadian employees after determining the policy was unreasonable due to reduced efficacy against the omicron variant. In a separate announcement, GM will also end its vaccine requirement for Canadian operations.
Connected/Autonomous Vehicles and Mobility Services
- A new survey on select partial automation
systems by the Insurance Institute for Highway Safety
found consumers had a strong interest in lane centering, automated
lane changing and driver monitoring technologies, but preferred
features that require the driver to remain engaged over
"hands-free" versions.
- Valeo will supply Stellantis with its third-generation LiDAR to enable SAE Level 3 autonomous driving for multiple models beginning in 2024.
Electric Vehicles and Low Emissions Technology
- In a recent interview with Transport Topics,
Cummins indicated the transportation industry is
at a "tipping point" with
decarbonization efforts, and noted high fuel
prices may contribute to increased interest in hydrogen and
electric-powered vehicles.
- Ford plans to focus on speed to market and
offering electric models of its most popular vehicles, while
GM intends to introduce a wide range of EV models
across price points, according to a report in The Wall Street Journal assessing the
automakers' electrification strategies.
- Lithium-ion battery recycling startup Redwood
Materials announced a new collaboration with
Toyota to collect, refurbish and recycle batteries
and battery materials.
- Circular Energy Research and Consulting estimates 1.7 million EV batteries
will be available for reuse in 2030, at a combined market
value of $5.1 billion.
- Ford announced a recall for certain 2021-2022 Mustang
Mach-E vehicles due to battery contactors that may
overheat and cause a loss of power.
- Blink Charging completed its $200 million acquisition of
Maryland-based SemaConnect Inc., in a deal that
will expand its geographic reach by adding nearly 13,000 chargers
and 3,800 site host locations.
- Contract manufacturer Foxconn started building
its first EV battery plant in Taiwan, and the company
intends to start test production in early 2024.
- Swedish electric-vehicle maker Polestar began trading on the Nasdaq following the
completion of a merger with a special-purpose acquisition
company.
- Volvo began testing hydrogen fuel cell
semi-trucks, and customer pilots are planned "in a
few years" with commercialization to follow in the second half
of this decade.
- A loss prevention specialist quoted in Lloyd's List indicated new vessel
types may be needed to transport electric vehicles
on the water due to the flammability of lithium-ion
batteries.
- In a recent interview, Tesla CEO Elon Musk said the company's manufacturing sites in Berlin, Germany and Austin, Texas are "losing billions of dollars right now" as supply chain challenges limit the ability to increase production.
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