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 Partners Nicholas
Ellis and Vanessa
Miller are quoted in the article, "Stellantis
Imposes Changes That Could Raise Suppliers' Costs, Cause 'a
Lot of Friction'," which was published in Crain's Detroit
Business and Automotive
News and covers the key
changes Stellantis made to
its purchase order terms and
conditions that are addressed in this blog post.
- U.S. new light-vehicle sales
in January reached a SAAR of 15.0 to
15.2 million units, according to estimates from NADA and LMC Automotive. This
represents the strongest SAAR since June 2021; however, sales were
down by approximately 10% compared to January 2021.
- Due to the semiconductor
shortage Ford will reduce or halt
production at eight North American
plants this week, affecting models including the
F-150, Ranger, Bronco, Explorer and Mustang Mach-E.
- IHS Markit predicts that analog
chips used in vehicle production are likely to face
significant supply constraints over the
next three years.
- Aluminum prices are nearing a decade
high after rising by 24% over the last six months.
- "Right to Repair"
legislation was introduced last week in support of
allowing consumers to seek vehicle, device and equipment repairs by
independent providers. U.S. Rep. Bobby Rush (D-IL) introduced the
Right to Equitable and Professional Auto Industry Repair (REPAIR)
Act (H.R.
6570), and U.S. Reps. Mondaire Jones (D-NY) and
Victoria Spartz (R-IN) introduced the Freedom to Repair
Act.
- Faurecia announced the close of its $6 billion
acquisition of Hella, in a deal that is
expected to expand opportunities in areas including electric mobility and
autonomous driving. The combined
company will be known
as Forvia.
- SoftBank Group's Vision Fund
recently agreed to
invest an additional $1.35 billion in Cruise, GM's
autonomous technology business unit. Cruise launched its driverless
taxi service to the public in San
Francisco, initially operating during limited hours in
select neighborhoods.
- According to Forbes,
three key areas of impact for automated
mobility in 2022 are trucking and shipping,
contactless delivery, and vehicle safety.
- Electric vehicles and low emissions
technology:
-
- Kelley Blue Book estimates the
combined category of battery-electric, hybrids and
plug-in hybrids reached 9.7% of U.S.
light-vehicle sales in 2021.
- Electreon has been awarded a contract to build a
public, wireless EV-charging
road system near Michigan Central Station
in Detroit. Electreon will work with
NextEnergy and Jacobs Engineering Group, and the project is
expected to be complete in 2023.
- Governor Whitmer announced a
proposal for a combined $2,500 electric vehicle
rebate for Michigan consumers, with $2,000 going
toward the cost of the vehicle and $500 for installation of an
in-home battery charger.
- Zero emissions vehicles (ZEVs) increased to
5.6% of Canadian light-vehicle sales in
2021, up from 3.8% in 2020.
- Fleet sales and consumer interest in EV pickup trucks are expected to lead to broader electric vehicle market penetration, according to a panel discussion at the BloombergNEF Summit in San Francisco.
- Kelley Blue Book estimates the
combined category of battery-electric, hybrids and
plug-in hybrids reached 9.7% of U.S.
light-vehicle sales in 2021.
Market Trends and Regulatory
- Auto loan balances at U.S. banks increased by
12% over the course of 2021, as consumers pursued bigger
loans amid elevated prices for new and used
vehicles.
- The U.S. Department of Transportation revealed a National Roadway Safety
Strategy intended to reduce serious and fatal injuries on
U.S. roads. The National Highway Traffic Safety
Administration estimates U.S. traffic
fatalities increased 12% in the first nine months of
2021 to 31,720, representing the highest number of
fatalities since 2006.
- Michigan Senators Gary Peters and Debbie Stabenow, and Senator
Bill Hagerty (R-TN), re-introduced the Vehicle
Innovation Act (S.3543), which would
invest $1.7 billion over five years for research
and development of fuel-efficient technology.
The Motor & Equipment Manufacturers
Association (MEMA) indicated the legislation is an
important aspect of the goal to achieve a net-zero carbon
transportation future.
- U.S. Representative Brenda L.
Lawrence (MI-14) introduced H.R. 6546,
the Wireless Electric Vehicle (EV) Charging Grant
Program Act of 2022, which would create a $50 million
grant program in the Department of Transportation.
- The U.S. House passed the America COMPETES
Act (H.R. 4521), a $350
billion proposal to increase federal support for technology and
scientific research, which includes $52 billion to
support the domestic semiconductor
industry. The package is a response to the Senate's
$250 billion U.S. Innovation and
Competition Act. The bills have different
approaches in areas such as trade policy, which could lead
to partisan debate.
- The Insurance Institute for Highway
Safety plans to
release a new nighttime test and rating system
for automatic emergency braking systems,
after a recent study found that AEB systems did not perform well
unless operating in daylight or well-lit conditions.
- Business leaders, including the CEOs
of Ford and GM, met with President
Biden to discuss the benefits of the Build
Back Better legislation. This social spending bill,
which has thus far failed to
receive enough support in Congress, includes a provision that would
offer consumer tax credits for
electric vehicles that are union-made in
the U.S.
- During a recent House subcommittee hearing, representatives from a number of entities provided testimony in support of a national framework to facilitate the deployment of autonomous vehicles, The Road Ahead for Automated Vehicles.
OEMs/Suppliers
- Several automakers predict the semiconductor
shortage will ease beginning in the second half of
2022, while others such as Volkswagen and
a number of chipmakers have cautioned that
supplies will remain limited for a longer duration.
- In its most recent earnings
call, GM predicted it
would increase its global production
volumes by 25% to 30% year-over-year, the majority of
which will occur in the second half of 2022.The automaker reported net income of
$10 billion for 2021, an increase of 56% compared to
2020.
- Ford reported net income of
$17.9 billion for 2021, and estimates its global
deliveries will increase by 10% to 15% this
year.
- Stellantis suspended the
implementation of a COVID-19 vaccine
mandate for its salaried, non-union U.S. workforce.
The automaker estimates that 97% or more of the affected 14,000
employees have received the vaccine or a medical or religious
exemption.
-
Aptiv and Audi will invest a
combined $285 million in Vienna-based automotive safety software
company TTTech Auto.
- Google will
provide workforce development training and cloud-based
technology services for Ford's mobility
innovation campus, Michigan Central.
- GM plans to hire 8,000 technology employees this year, as the automaker increases its capabilities in developing vehicle software, fuel cells, and advanced electric batteries.
Connected/Autonomous Vehicles and Mobility Services
- Autonomous shuttle startup May
Mobility raised $83
million in a Series C funding
round led by SPARX Group Company. Toyota Ventures and BMW
i Ventures were among the investors participating in the
round.
- Robert Bosch and Volkswagen
Group's software unit Cariad will partner to
develop advanced driver-assistance and autonomous-driving systems
for consumer vehicles.
- Autonomous technology
company TuSimple will
begin driverless freight runs for Union
Pacific Railroad on a route between Tuscon and
Phoenix this spring.
- A new study by AAA found that driver-facing cameras are more effective for monitoring driver behavior than steering-wheel based systems.
Electric Vehicles and Low Emissions Technology
- Daimler Truck North
America, NextEra
Energy Resources, and
BlackRock Renewable Power will jointly develop and
deploy a nationwide charging
network for medium- and heavy-duty battery
electric vehicles and hydrogen fuel
cell vehicles.
- Bloomberg reports that Ford could
spend up to $20 billion over the next
five to ten years to align its operations in support of an enhanced
focus on EVs. Ford did not comment for this article.
- Recycling battery materials such as
lithium, copper, nickel, cobalt and manganese has the potential to
help the U.S. to strengthen its own electric-vehicle supply chain.
Battery recycling companies Redwood
Materials, Battery
Resourcers and Li-Cycle have
each made recent announcements related to expansion or new
partnerships.
- Rising prices for
battery materials have begun to cast doubt on previous
projections that lithium-ion battery prices would reach $100 a
kilowatt-hour by 2024.
- Lithium-metal battery technology
startup Soelect raised $11 million
in Series A
funding from Lotte Ventures, GM Ventures and KTB
Network.
- A new report from
Calstart estimates that
sales of zero-emission commercial
trucks could increase from less than 1% today, to 30%
by the end of the decade. There are currently 140,000 pending
orders for commercial EVs, the bulk of which are by Amazon,
followed by Walmart and FedEx. Calstart is a Pasadena, Calif.-based
coalition that promotes zero-emission trucks.
- Colorado-based Lightning eMotors announced a
deal to fully electrify a number of GM's medium-duty truck
platforms for applications including school buses, shuttle buses,
delivery and work trucks.
- There are approximately 50 public hydrogen
refueling stations operating in the U.S. today, and
nearly all locations are in California. Private
networks of hydrogen refueling stations are a potential
area of opportunity, if government action is taken to support
third-party access through incentives, capacity credits, or other
measures.
- China's Baidu and Geely will invest nearly $400 million into their EV joint venture, Jidu, to fund research and development and mass production. Jidu launched last year, and is majority-owned by Baidu.
Prepared by Julie Dautermann, Competitive Intelligence Analyst
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.