This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. 

Key Developments

• Recent analysis from Foley & Lardner partners addresses the potential impact of the USMCA’s panel on Automotive Rules of Origin to North American manufacturers.

• U.S. new light-vehicle prices increased 12.2% and used vehicle prices increased 40.5% in January 2022 compared with January 2021, according to the most recent Consumer Price Index. As a result of persistent inventory shortages, The Wall Street Journal also noted that certain vehicle models are experiencing significant value increases, instead of depreciating after purchase.

• New-vehicle inventory reached 1.08 million units at the end of January, representing a 37 days’ supply industrywide. 

• U.S. fleet sales were estimated at over 97,000 units in January, representing a decline of 36% compared to the same period last year.

• The Center for Automotive Research commented that the Ambassador Bridge traffic blockade could contribute to decisions by automakers to source certain parts locally. Toyota and several automakers reported February 16 that production levels had normalized after protests against COVID-19 restrictions halted bridge traffic for nearly one week.

• The EPA is expected to reissue a waiver under the Clean Air Act allowing California to pursue its own tailpipe greenhouse gas emission standards and ZEV mandates.

• The industry continues to see partnerships for autonomous trucking technology: Knight-Swift Transportation will incorporate technology from autonomous-trucking company Embark into its fleet. Waymo and C.H. Robinson will collaborate on multiple autonomous trucking pilots in Texas. Waymo also recently announced an extension of its partnership with J.B. Hunt Transport, focused on autonomous freight operations in Texas.

• Electric vehicles and low emissions technology:

  • The Biden administration announced details for awarding federal funds to states as part of the $5 billion program to build a national network of EV charging stations, as part of the 2021 infrastructure legislation. Michigan is expected to receive $110 million over a five-year period to develop EV charging stations, beginning with $16.3 million this year.

  • Nissan will invest $500 million to transform its Canton, Mississippi plant into a “center for EV manufacturing and technology,” and the site will produce two new EVs beginning in 2025.

  • Ford started deliveries of its new all-electric E-Transit cargo van for customers including Walmart. The E-Transit van is the automaker’s second all-electric vehicle, following the launch of the Mustang Mach-E.

  • GM plans to resume Chevy Bolt electric vehicle production the first week of April, following a shutdown that began in the third quarter last year following a product recall.

  • Stellantis will recall nearly 20,000 Chrysler Pacifica Hybrid minivans from the 2017 and 2018 model years due to potential fire risks.

Market Trends and Regulatory

• Korean brands earned three of the top four rankings in J.D. Power’s most recent U.S. Vehicle Dependability Study, and Japanese brands dominated Consumer Reports’ 10 Top Picks of 2022.

• The National Highway Traffic Safety Administration issued a final rule allowing adaptive driving beam (ADB) headlights on new vehicles. New ADB lights are expected to first be used in higher-cost vehicles, with market penetration increasing as the price of the technology declines.

OEMs/Suppliers

• Ford and GM warned dealerships they could lose future vehicle inventory as a result of charging consumers more than the manufacturer’s suggested retail price.

• Toyota lowered its fiscal year sales forecast to 8.25 million vehicles from a previous projection of 8.55 million vehicles, due to supply constraints caused by the chip shortage and COVID-19 cases.

• Honda reported double-digit net profit declines in its October-December earnings results, and remarked on the challenge of projecting sales volumes amid the chip shortage.

• BMW acquired a majority stake in its Chinese joint venture, BMW Brilliance Automotive, in a move that is intended to increase profits. China recently phased out restrictions that had prohibited foreign manufacturers from majority ownership in joint ventures.

Connected/Autonomous Vehicles and Mobility Services

• Intel’s Mobileye will partner with Benteler EV Systems and Beep to launch autonomous electric shuttles in the U.S. in 2024.

• Jaguar Land Rover will partner with NVIDIA to develop software-based technology for its vehicles beginning in 2025.

• GM and its autonomous technology business unit Cruise formally petitioned the National Highway Traffic Safety Administration (NHTSA) to build and launch the Cruise Origin, which has been designed to operate without a human driver.

Electric Vehicles and Low Emissions Technology

• Recent transactions–

  • BorgWarner will acquire Tianjin, China-based Santroll Automotive Components, a carve-out of Santroll’s eMotor business, in a deal valued at over $220 million.

  • American Axle will invest $15 million in Autotech Ventures, a Silicon Valley venture capital firm focused on electrification and mobility companies in applications including global ground transportation.

  • GM will double investment in its Climate Equity Fund to $50 million. The automaker established the fund eight months ago, in an effort to help close equity gaps in the transition to electric vehicles.

  • CelLink, a California startup that has developed a new method of connecting battery cells and packs, raised $250 million of Series D venture funding in a deal led by Whale Rock Capital Management, and investors including Robert Bosch Venture Capital, BMW i Ventures and Lear.

• China-based Apple manufacturing partner Luxshare Precision Industry is forming a joint venture with Chery New Energy to develop electric vehicles. A number of electronics manufacturers and technology companies have announced plans to enter the EV market, including Foxconn and Baidu.

• Ford is reported to be considering ways to separate its electric vehicles operations, such as creating a distinct EV business internally.

• Toyota will invest $90 million in two components plants in West Virginia and Tennessee, in order to expand production of hybrid transaxles and related parts.

• Ford and Volvo will work with battery recycling startup Redwood Materials in California to collect and recover materials from end-of-life electric and hybrid batteries.

• Australian company Tritium DCFC Ltd. plans to build electric-vehicle charging stations at its first U.S. manufacturing facility in Tennessee.

• Burning electric vehicle batteries may have prolonged a fire aboard a cargo ship carrying thousands of cars, including Porsches and Bentleys.(The cause of the fire was not identified at the time of this news update.)

• Due to numerous infrastructure challenges, light vehicles are not expected to be a significant market opportunity for hydrogen in the near future.

Prepared by Julie Dautermann, Competitive Intelligence Analyst