Foley Automotive Report – Transport


United States:

Foley Automotive Report


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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

  • Foley & Lardner LLP Partner Vanessa Miller
    was featured in the article, “‘One thing after
    another’: More disruption looms over semiconductor
    market
    ,” in Supply Chain Dive 
    discussing the potential for supply chain issues in the
    semiconductor industry to worsen due to the ongoing war in Ukraine,
    and what the implications are for automakers.

  • U.S. new vehicle inventory is estimated at 1.11
    million units at the end of March, representing a 35 days’
    supply industrywide; this is a decline of 54% from the same period
    one year ago.

  • According to J.D. Power, new light vehicle average transaction
    prices
    have declined slightly this year, but remain 26%
    higher compared to the end of 2019.

  • LMC Automotive predicts that
    by 2027, light vehicle production in Mexico could
    increase by up to 31%, compared to 9% for Canada and 17% for the
    U.S.

  • Toyotalowered its industry
    forecast for 2022 U.S. light vehicle sales to 15.5 million
    units
    , down from a previous projection of 16.5 million
    units.

  • According to the March 2022 Consumer Price
    Index
    , new vehicle prices were up 0.2% and used
    vehicle prices fell 3.8% from the prior month. Compared to March
    2021, new vehicle prices were up by 12.5% and used vehicle prices
    were up by 35.3%.

  • Automakers including Tesla and SAIC
    Motor
    are hoping to gradually resume production in
    Shanghai this week following lockdowns in response
    to a COVID-19 outbreak.

  • Major logistics companies indicate they are in
    the early stages of testing autonomous truck
    technology
    with multiple providers, and are hesitant to
    commit to large orders in the near-term.

  • Electric vehicles and low emissions
    technology
    :

    • The California Air Resources Board released a
      proposal to support
      the state’s target to end sales
      of internal combustion engine vehicles by 2035. If adopted,
      CARB’s plan would require 35% of new passenger vehicle sales to
      be zero-emission vehicles or plug-in hybrids by 2026, increasing to
      nearly 70% by 2030.

    • The Government Accountability
      Office
      predicts the federal government may need over
      100,000 charging stations to support widespread use of
      EVs
      , up from the 1,100 charging stations owned by federal
      agencies as of March 2022.

    • Honda will invest
      approximately $40 billion over the next ten years in
      electrification and software technologies, and will launch 30 EV
      models globally by 2030.

    • The auto industry could experience a shortage of
      battery supplies
      for EVs that surpasses the magnitude
      of the chip shortage.

Market Trends and Regulatory

  • The Center for Automotive Research provided an
    overview of the new
    Corporate Average Fuel Economy standards which
    increase passenger vehicle fuel efficiency by 8% annually for model
    years 2024-25, and 10% annually for model year 2026.

  • The National Highway Traffic Safety
    Administration
    launched an inquiry
    into electric vehicle batteries made by LG Energy
    Solution 
    that have been linked to fire risks and
    recalls by several automakers in the past two years.

  • Retail car sales in China declined by
    10.5% in March compared to the same period last year,
    according to estimates from the
    China Passenger Car Association.

OEMs/Suppliers

  • According to Crain’s
    Detroit
    (subscription), Magna International
    Inc
    . and Lear Corp. are separately
    pursuing expansion plans to capture more business from automakers,
    including joint ventures and opening new plants in Detroit.

  • Wire harness supplier Leoni
    AG
    is operating at up to 80% of prewar output at its
    plants in western Ukraine, with employees who
    requested to continue working to support the nation amid the
    ongoing war with Russia.

  • GM resumed production
    at its Fort Wayne, Indiana, plant this week following a two-week
    shutdown resulting from the chip shortage.

  • Renault and Nissan intend to
    meet in person next month for private discussions pertaining to
    their alliance, including the possibility of a separate listing for
    Renault’s electric-vehicle unit. According to unnamed sources
    in Bloomberg,
    there are currently “no signs of any imminent structural
    change in the three-way alliance that includes Mitsubishi Motors
    Corp.”

  • Volkswagen plans to eliminate
    60% of its gasoline- and diesel-powered models by 2030 and will
    instead focus on selling more profitable premium vehicles.

  • At its first digital ESG (Environment, Social and Governance)
    Conference, Mercedes-Benzannounced plans to
    reduce CO2 emissions per passenger car by over 50% by 2030 compared
    with 2020 levels.

Connected/Autonomous Vehicles and Mobility Services

  • Guidehouse Insights predicts that
    over 1.2 million automated trucks and buses will be
    deployed globally each year by 2032
    , with long-haul
    trucking, last-mile deliveries, and middle-mile deliveries as the
    dominant applications. [Press release only, full report not
    publicly available
    ]

  • Toyota unit Woven Plant will
    increase data collection from
    low-cost cameras
    to help scale up autonomous
    driving technology while reducing costs. The company noted the more
    costly radar and lidar sensors
    have greater safety and reliability for certain types of uses such
    as robotaxis.

  • Aurora Innovation announced a
    commercial pilot to haul freight autonomously on a route between
    Fort Worth and El Paso, Texas for Werner
    Enterprises
    .

  • Stellantis will use
    Qualcomm‘s Snapdragon Digital Chassis for
    upcoming in-vehicle technology platforms as part of an expanded partnership
    expected to benefit connected and data services.

  • Autonomous technology company Argo AI will
    invest $2.6 million to establish a new test
    facility in South Carolina.

Electric Vehicles and Low Emissions Technology

  • Bollinger Motors will develop a Class 3 prototype of
    an electric walk-in van for initial piloting by Con
    Edison
    .

  • American Axle & Manufacturing Holdings,
    Inc.
    will acquire
    Hausach, Germany-based Tekfor Group for €125
    million in a deal which is expected to increase AAM’s
    electrification product portfolio.

  • Ford will begin production of
    its all-electric F-150 Lightning on April 26.

  • GM and Honda will co-develop a
    line of affordable electric vehicles, including
    compact crossover vehicles, with global production beginning in
    2027.

  • Nissan is working with NASA to develop solid-state
    batteries
    for electric vehicles beginning with a pilot program
    in 2024, followed by a broader rollout in 2028.

  • Toyota‘s first all-electric vehicle in
    eight years, the 2023 bZ4X small SUV,
    will begin U.S. sales in May.

  • Wallbox began construction
    of its first U.S.-based EV charger manufacturing facility in
    Arlington, Texas.

  • GM established a
    multi-year sourcing agreement with Glencore to
    obtain cobalt for EV batteries.

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.

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