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

Key Developments

• 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.

• Toyota lowered 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-Benz announced 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.

Analysis by Julie Dautermann, Competitive Intelligence Analyst.