Key Developments

• U.S. new light-vehicle sales in May are forecast to reach a SAAR of 13.6 million units, representing a decline of 3.3 million units from the same period last year, according to projections by J.D. Power and LMC Automotive.

• Bloomberg reports auto suppliers “highly reliant” on gasoline-powered vehicles may increasingly pursue leveraged buyouts and merger and acquisition deals amid the industry’s shift to electrification.

• Toyota and Honda finished first and second in Plante Moran’s North American Automotive OEM-Supplier Working Relations Index, and GM held third place, which is consistent with results from last year.

• The average age of light vehicles on U.S. roads reached 12.2 years, representing a record high and the fifth consecutive year of increases.

• Electric vehicles and low emissions technology:

  • Stellantis and Samsung will invest over $2.5 billion in an electric-vehicle battery plant in Kokomo, Indiana. The announcement represents the automaker’s second EV plant in North America, and it is expected to begin production in 2025.

  • Hyundai will invest $5.5 billion and employ up to 8,100 workers at a new EV manufacturing site in Georgia that is expected to begin operations in 2025.This represents the automaker’s first U.S. plant dedicated to producing electric vehicles. Hyundai and Kia also announced plans to invest $16.5 billion through 2030 for EV production in South Korea.

  • Up to 30% of North America’s upcoming gigafactory annual capacity could be at risk by 2025 due to the potential for construction delays and operational inefficiencies, according to analysis by McKinsey & Company.  The analysis also projects global EV demand will reach approximately 40 million units by 2030, and the industry will need 200 new gigafactories worldwide to support this growth rate.

  • The newly launched Coalition for American Battery Independence intends to seek federal policies supporting U.S.-based processing and production of batteries and battery components. The coalition includes automakers, lithium producers and EV startups, and it will be administered by energy lobbyist Boundary Stone Partners.

Market Trends and Regulatory

• Analysis from S&P Global predicts “above average” demand for commercial vehicle replacement parts in response to the increased age of vehicles on the road.

• The National Highway Traffic Safety Administration estimates U.S. traffic fatalities reached 42,915 in 2021, representing an increase of 10.5% from 2020 and the highest number of fatalities since 2005.

• The average retail price for regular unleaded gas reached $4.60 a gallon in the U.S. during the week of May 23, compared to $3.02 per gallon at the same time last year. Gasoline recently surpassed an average of $4 per gallon in every U.S. state for the first time.

OEMs/Suppliers

• Toyota further reduced its global production plan for June due to parts shortages and the lingering effects of COVID-19 lockdowns in China.

• Volkswagen and Tesla plan to maintain “closed loop” systems to isolate workers at their Shanghai plants until June 10, according to a report from Bloomberg.

• Lear will acquire I.G. Bauerhin, a German supplier of temperature-controlled seats and steering wheels, for €140 million. The acquisition is expected to complement existing products and expand capabilities into active cooling.

• Meritor will acquire the commercial vehicle business of Siemens for approximately €190 million, in a deal that is expected to expand its electric solutions ahead of its upcoming acquisition by Cummins.

Connected/Autonomous Vehicles and Mobility Services

• Bosch and WeRide will jointly develop autonomous driving software for OEM customers in the Chinese market.

• Argo AI is testing driverless rides without human safety operators behind the wheel in Miami, Florida and Austin, Texas.

• As part of a strategy emphasizing data transparency to expand customer trust, Porsche developed privacy settings allowing drivers to stop sharing personal data with the company.

Electric Vehicles and Low Emissions Technology

• Global automakers are losing market share in China to domestic electric vehicle brands, according to a report in Reuters.

• The percentage of consumers indicating they are "very likely" to consider an EV for their next purchase or lease reached 24%, representing an increase of four percentage points from last year, according to the J.D. Power 2022 U.S. Electric Vehicle Consideration (EVC) Study. [Press release only, full report not publicly available]

• The Wall Street Journal reports several states may need to improve and streamline their procedures for using federal funds in order to accelerate the availability of EV charging infrastructure.

Analysis by Julie Dautermann, Competitive Intelligence Analyst