FoNley Automotive Report – November 2022 | Foley & Lardner LLP – JD Supra – JD Supra | CarTailz

Analysis by Julie Dautermann, Competitive Intelligence Analyst

This report helps automotive suppliers make their legal and operational decisions to address challenges and opportunities.\

Important Developments

  • Foley & Lardner was among the sponsors of the OESA 2022 Automotive Supplier Conference held on November 7th in Novi, Michigan. Stay tuned Dashboard Insights for the most important insights from this event.
  • The latest article in Foley & Lardner‘s Supply Chain Disruption Series provides background information on a number of key Terms and conditions for buyers and sellers in the supply chain to be considered in commercial forms. Click here to subscribe to the article series.
  • LMC Automotive estimates US new light vehicle sales reached a SAAR of 15.1 million units in Octoberan 11% increase from October 2021 but a 14% decrease from October 2020. LMC forecasts full-year 2022 new light vehicle sales of 13.7 million units.
  • New car prices in October an average of 33% above pre-pandemic levelsand up to five million US consumers are still waiting to buy new vehicles, according to JD Power partially inside The Wall Street Journal and the Associated Press. The analysis also shows that consumers can expect “a continued, slight slowdown in new car prices”. In the short term, however, rapid price declines are not to be expected.
  • Edmunds appreciates that average effective annual interest rate on new car loans reached 6.3% in October, and in the coming months, APRs could reach their highest level in over a decade, according to data extracted here Bloomberg.
  • Toyota lowered its full-year production forecast by 500,000 vehicles to 9.2 million vehicles, citing market headwinds among other things Supply bottlenecks in semiconductors.
  • Argo AI Operations are reported to have ceased after its key supporters, ford and Volkswagen, indicated that they will end their investments in the autonomous vehicle technology company. Ford announced it will reduce capital expenditures for Level 4 advanced driver assistance systems to prioritize internal development of L2+/L3 technologies.
  • ford reported a profit loss of $827 million in the third quarter due to a $2.7 billion pre-tax non-cash impairment charge on its investment in Argo AI. Revenue rose 10% year over year to $39 billion, but the quarter was impacted by about 10% 40,000 vehicles are waiting for partsas well as $1 billion in higher-than-expected supplier payments.
  • Electric vehicles and low-emission technology:
    • Government officials from the EU, South Korea and Japan continue to express concern about the impact of procurement requirements on the automotive industry EV Tax Credits in which US Inflation Reduction Act.
    • Bloomberg Reports have asked automakers including Ford US Treasury Department for clarity and flexibility regarding specific provisions that are affected Eligibility for Electric Vehicle Tax Credit.
    • A report in Supply chain dive addresses a number of challenges in setting up a US-based EV battery supply chain, including limited domestic reserves of key commodities such as lithium. For additional context on this topic, a recent article in Foley & Lardner‘s Supply Chain Disruption Series provides an overview of current issues affecting the production and supply of Lithium Ion Batteries.
    • A new report from S&P Global Mobility assesses risk factors that could affect it supply chain for battery raw materialsincluding geopolitical tensions, ESG concerns and high commodity prices. [Press release only, full report not publicly available]
    • That European Union reached a tentative agreement that could dictate that all new passenger cars must be sold as a block Emission-free vehicles from 2035.

Market Trends and Regulation

  • LMC Automotive appreciates the Production share of global automaker brands in China down to 47%from 54% in 2019, due to increasing penetration of domestic Chinese brands in the country.
  • theme traffics reports that a number of industry representatives raised concerns during a recent public hearing Californiais suggested Enhanced Clean Fleet Regulation, including the availability of charging infrastructure and the impact on vehicle costs and performance. By 2045, the country wants to achieve an emission-free truck and bus fleet.
  • Law360 A number of states and industry organizations were reportedly calling for the DC Circuit to be cracked down US Environmental Protection Agency Rules that empower Greenhouse gas standards for car emissionson the grounds that the agency had exceeded its powers.

OEMs/Suppliers

  • Magna International will invest over $500 million at three Michigan sites to support production of battery components and seat parts.
  • Lear announced plans to invest $80 million in a new manufacturing facility in Michigan after the company won a contract to exclusively supply the battery disconnect unit for all large SUVs and trucks it builds on GM‘s Ultium EV platform until 2030.
  • Stellantis reported sales of €42 billion in the third quarter, up 29% from the same period last year. The automaker said its vehicle shipments rose 13% in the quarter as semiconductor shipments improved.

Connected/autonomous vehicles and mobility services

  • California lidar manufacturers displacement and Velodynes announced merger plans in a transaction that will result in shareholders owning approximately 50% of the combined company. The deal is expected to close in the first half of 2023.
  • Bloomberg Reports that automakers use lidar more common in production vehicles to improve functionality advanced driver assistance systems (ADAS). So far, lidar has mainly been used for highly specialized autonomous vehicles. However, it is expected to see wider adoption as prices for the technology come down.

Electric vehicles and low-emission technology

  • Hyundai broke ground on its $5.5 billion electric vehicle and battery plant in Georgia, with production slated to begin sometime in 2025. This is the automaker’s first EV plant in the United States
  • panasonic began construction of its new battery plant in Kansas last week, with production scheduled to begin in 2025.
  • The Biden administration announced the recipients of the US EPAs for fiscal year 2022 Clean school bus programwhich will award nearly $1 billion to 389 school districts across the country.
  • A report by the Fuels Institute points to the expansion public EV charging infrastructure in the US could be hampered by insufficient Building regulations and permitting procedures.
  • A report in Bloomberg assesses a range of impacts related to Buy America requirements for certain federally funded Electric vehicle charging projects.
  • GM and based in Houston microwave want to develop together Separator technology for EV batteriesand build a new separator plant in the USA. The project is supported by a $200 million grant awarded by the Bipartisan Infrastructure Act.
  • Manufacturer of electric work vehicles VIA engines moved its headquarters to Auburn Hills, MI, to a location that will serve as the company’s vehicle development and testing hub.

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