Key Developments

• U.S. new light-vehicle sales reached 1.3 million units in July, representing a SAAR of 15.8 million units, according to estimates from GlobalData featured in Just Auto. New vehicle sales are projected to hit 15.4 million units for full-year 2023, and 16 million units for 2024.
   
• Foley & Lardner provided an overview of recent actions in the U.S. House to revive legislation regulating autonomous vehicles. Proposals in recent years have stalled due to differing viewpoints in areas including AV liability, as well as the roles of federal, state, and local governments in regulating emerging automotive technologies.
   
• Foley & Lardner shared a number of recent developments pertaining to smart manufacturing uses in the auto industry, including digital twins, machine learning and artificial intelligence applications for the supply chain and customer experiences.
   
• As contract negotiations continue with the Detroit Three automakers, UAW President Shawn Fain shared ten key demands from union members which included the elimination of wage tiers, substantial wage increases, limits on the use of temporary workers, restoring cost of living increases, and reestablishing retiree benefits.
   
• Automotive suppliers are preparing for a potential UAW strike next month, which could result in “devastating losses” to the supply chain, according to a report in Crain’s Detroit (subscription).
   
• Automotive OEMs’ profit margins were 2.5 percentage points higher than that of automotive suppliers on average in the first quarter of 2023, according to analysis by Bain & Company published last month. The analysis also predicts “an increasing number of suppliers are expected to face liquidity challenges that will likely require special support.”
   
• The National Highway Traffic Safety Administration released a proposal to revise current Corporate Average Fuel Economy standards for passenger cars and light trucks to a fleet average of roughly 58 miles per gallon by model year 2032. This plan calls for fuel efficiency to increase 2% annually for passenger cars and 4% for light-duty trucks beginning in model year 2027, with improvements for commercial pickups and work vans beginning in model year 2030.
   
• Ford expects to lose $4.5 billion on electric vehicles in 2023, up from a previous projection of $3 billion. The automaker will also delay plans to reach an annual production target of 600,000 EVs to year-end 2024, from an original goal of year-end 2023, due to factors including the EV pricing environment.

OEMs/Suppliers

• GM reported net income of $4.9 billion on total revenue of $84.7 billion in the first half of 2023, reflecting an increase of 7% and 18%, respectively, compared to the same period last year. The automaker’s second quarter net income increased 52% year-over-year, and guidance for full-year 2023 net income was raised to a range of $9.3 billion to $10.7 billion, from a previous range of $8.4 billion to $9.9 billion.
   
• Ford reported net income of $3.7 billion on revenue of $86.4 billion in the first half of 2023, representing increases of 6% and 7.8% year-over-year. Second quarter 2023 net income was $1.9 billion, compared to $700 million in the second quarter of 2022.
   
• Stellantis reported its net income increased 37% to $12.1 billion in the first half of 2023, and revenue rose 12% to $109 billion, compared to the same period last year.
   
• Volkswagen intends to deliver between 9 million and 9.5 million vehicles this year, down from a previous projection of 9.5 million vehicles, due to increased delays in transportation and logistics.
   
• Bloomberg reports a number of European auto suppliers are accumulating debt due to experiencing higher labor and materials costs amid long-term, fixed-price contracts. The article notes that certain companies will need solutions ahead of debt maturities occurring between 2024 and 2026.

Electric Vehicles and Low Emissions Technology

• Analysis from Ernst & Young suggests that certain auto suppliers hoping to successfully transition to EVs may benefit from emulating private equity firms’ decision-making culture and emphasis on enterprise value.
   
• Upward trajectories in EV range and battery-pack sizes may pressure battery supply chains in the years ahead, particularly for the U.S. market, due to consumer preferences for larger vehicles such as pickup trucks and SUVs.
   
• On August 3 the U.S. Joint Office of Energy and Transportation announced the members and initiatives of an Electric Vehicle Working Group previously established to help guide the nation’s EV adoption. Members include representatives from the Alliance for Automotive Innovation, the National Automobile Dealers Association, the UAW, LG Energy Solution, Daimler Truck North America, charging companies, electric utilities, federal agencies and other industry groups. The Joint Office was created through the Bipartisan Infrastructure Law (BIL) to facilitate collaboration between the U.S. Department of Energy and the U.S. Department of Transportation.
   
• GM, Stellantis, Hyundai and its affiliate Kia, Honda, BMW and Mercedes-Benz Group intend to form a joint venture to install 30,000 or more chargers along highways and in cities beginning in the U.S. next summer.
   
• GM plans to develop a next-generation electric Chevrolet Bolt on its Ultium battery platform, reversing an earlier decision to discontinue the vehicle. The automaker sold over 33,000 Bolt EVs and EUVs in the first half of 2023.
   
• Electric commercial vehicle company Bollinger Motors received final approval from the State of Michigan for a $3 million grant which will be distributed over the next five years. The funding supports plans to add jobs and expand investment in its Oak Park and Livonia, Michigan facilities.
   
• Bloomberg reports a number of Chinese companies recently invested in South Korea’s battery plants and established joint ventures in an effort to utilize the U.S. – Korea Free Trade Agreement to qualify for tax breaks in the Inflation Reduction Act.
   
• The first 2024 electric Chevrolet Blazer SUVs started shipping from GM’s factory in Ramos Arizpe, Mexico. The vehicle’s starting price will be roughly $12,000 higher than the automaker’s original estimate.
   
• Ford resumed production of the F-150 Lightning electric pickup truck following a six-week shutdown to retool and expand capacity at its Rouge Electric Vehicle Center in Dearborn, Michigan.
   
• In a milestone achieved in the second quarter of 2023, one in four new vehicles sold in California were zero-emission vehicles (ZEVs).
   
• Federal agencies preparing to transition to ZEVs identified a number of upcoming challenges, including the cost of charging equipment installation and inadequate supplies of suitable vehicles, according to a recent report from the Government Accountability Office. The Biden Administration issued an Executive Order in December 2021 which calls for most federal vehicle acquisitions to be ZEVs by 2035.

Automated, Autonomous or Connected Vehicles Technologies

• Alphabet’s Waymo announced it will push back the timeline and scale back the development of autonomous truck technology, and will instead focus efforts and investments on ride-hailing.
   
• The California Public Utilities Commission (CPUC) is scheduled to vote in the coming days on whether to allow Waymo and GM business unit Cruise to expand autonomous ride-hailing fleets in San Francisco.
   
• The California Privacy Protection Agency’s Enforcement Division will review the data protection policies of connected vehicle (CV) manufacturers and related CV technologies to understand how companies are complying with the California Consumer Privacy Act (CCPA).

Market Tr3ends and Regulatory

• The average monthly new car payment reached a record high $733 in the second quarter of 2023, and the average interest rate on a new car loan was 7.2% in June 2023, according to data from Edmunds excerpted in CNBC.