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Key Developments

• Full-year 2024 U.S. new light-vehicle sales are projected to reach a SAAR between 15.7 million to 15.8 million units, according to estimates from the National Automobile Dealers Association and Cox Automotive. Robust year-end sales may conclude 2024 with the highest annual volume since 2019, with consumers motivated by incentives and concerns over the potential for higher prices next year.
• S&P Global Mobility forecasted global light-vehicle sales of 88 million units in 2024, up 1.5% year-over-year, and 90.6 million units in 2025. S&P Global also stated, “in North America, tax cuts, rising interest rates, and trade disruptions through tariffs will create an environment where vehicle affordability may be compromised, even as the economy shows signs of modest growth.”
• Projections for 2025 U.S. new light-vehicle sales are between 16.2 million to 16.3 million units, according to Edmunds and Cox Automotive. The combined category of hybrids, plug-in hybrids and battery electric vehicles could represent up to 25% of U.S. new light-vehicle sales in 2025 if favorable consumer incentives are maintained.
• PwC’s Automotive: U.S. Deals 2025 outlook predicts restructuring, supplier consolidation and interest rate reductions will drive increased automotive M&A activity next year, following lower deal activity in 2024 due to uneven vehicle sales and increased financing costs. The analysis states “32% of suppliers in 2024 showed signs of cash flow distress” resulting from heavy investments in electrification and lower-than-anticipated EV demand. 
• The U.S. Supreme Court on December 13 agreed to hear an appeal filed by fuel producers who object to an Environmental Protection Agency waiver that allows California to establish more stringent emissions limits than the national standard. The Supreme Court on December 16 declined a request by Ohio and 16 other states to review the D.C. Circuit’s April decision upholding the EPA’s Clean Air Act waiver for the Golden State. 
• The EPA on December 18 approved California’s plan to require all new vehicles sold to be zero-emissions by 2035.
• The Department of Energy on December 16 announced the closing of a $9.6 billion direct loan to Ford and partner SK On Ltd. to establish three EV battery plants in Tennessee and Kentucky.
• Battery materials producer NOVONIX secured a DOE conditional commitment for a direct loan of up to $754.8 million to support the construction of a synthetic graphite plant in Tennessee.
• At least three of the largest auto suppliers will skip or scale back their presence at the Consumer Electronics Show (CES) in Las Vegas next month, according to a conference preview from Automotive News.
• The European Union could require a 19% reduction in carbon dioxide (CO₂) auto emissions from 2024 standards if new rules take effect as planned on January 1, 2025. 
• GM’s autonomous vehicle unit Cruise will no longer pursue robotaxi development, and the automaker will instead prioritize advanced driver-assistance features. Automotive News provided an update on the robotaxi players operating in the U.S. following the exit of Cruise.

OEMs/Suppliers

• Automakers that include Stellantis, BYD, and Mazda will pause or reconsider investment strategies in Mexico until there is clarity on President-elect Trump’s proposal to implement 25% tariffs on imports from the nation. 
• Volkswagen and union leaders resumed negotiations this week over cost-cutting measures following labor strikes at plants across Germany.
• Honda and Nissan may be considering a possible merger, according to multiple media reports that have not been confirmed by the automakers.
• Bosch reached a preliminary agreement with the U.S. Department of Commerce to receive up to $225 million in direct funding under the CHIPS and Science Act to support silicon carbide semiconductor production and testing at the supplier’s Roseville, California plant.
• Continental will spin off its automotive business by the end of 2025 to focus on its more profitable tire and ContiTech industrial businesses.
• Novi, Michigan-based specialty vehicle manufacturer The Shyft Group Inc. will merge with Switzerland-based Aebi Schmidt Group. The combined company will be headquartered in Switzerland.
• Randy Parker was named CEO of Hyundai and Genesis Motor North America effective January 1, 2025, replacing Jose Muñoz, who was promoted to CEO of Hyundai Motor Co.

Electric Vehicles and Low Emissions Technology

• President-elect Donald Trump’s vow to repeal EV subsidies could create conflict between certain Republican lawmakers and their constituents. According to Bloomberg, “Republicans represent congressional districts with 19 of 25 major automaker battery and EV assembly plants in operation or under construction.” 
• The Biden administration on December 11 announced 70 applicants were tentatively selected to receive over $735 million through the Clean Heavy-Duty Vehicles Grant Program for the purchase of more than 2,400 zero-emission vehicles.
• Energy Information Administration analysis published this month indicates 70.7% of new BEVs sold in the U.S. in the third quarter of 2024 were luxury vehicles, compared with 10.3% of hybrid vehicles sold. Cox Automotive estimated the average transaction price for a new BEV in 3Q24 before accounting for potential incentives was $56,351, which is roughly 16% higher than the average new-vehicle transaction price. 
• A number of automakers expect to achieve cost savings by producing electric drives in-house instead of outsourcing to suppliers.
• The California Energy Commission on December 11 approved a $1.4 billion investment plan to support the installation of almost 17,000 new EV charging stations and hydrogen refueling infrastructure in the state over the next four years. The funding is part of the $48 billion California Climate Commitment, which includes more than $10 billion for zero-emissions vehicles and ZEV infrastructure. California currently has approximately 152,000 public and shared private chargers, and it expects to reach 250,000 chargers in the coming years.
• BloombergNEF analysis indicates the average price of lithium-ion battery packs fell by 20% to $115 per kilowatt-hour in 2024. The decline was attributed to overcapacity in cell production, lower component prices and the continued shift to using cheaper lithium iron phosphate batteries.
• Hyundai and BAIC Motor Corp. plan to invest $1.1 billion in their China joint venture to support increased EV production and exports, in an effort to improve their sales in the world’s top auto market.
• Reuters provided an update of planned, operating and postponed EV battery projects in Europe.
• Stellantis and China’s CATL will invest up to $4.3 billion in a joint venture to establish an EV battery plant in Spain.
• Chinese automakers may encounter challenges pursuing expansion in Brazil, the world’s sixth largest auto market, due to increased competition from domestic automakers and slowing EV growth rates in the nation.

Automated, Autonomous or Connected Vehicles Technologies

• A number of auto industry executives and industry analysts shared their expectations for artificial intelligence policies under the second Trump administration.
• Nvidia has increased headcount in China to support the development of autonomous driving technologies.

Market Trends and Regulatory

• A coalition of 267 trade associations urged the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) to resume negotiations ahead of a contract set to expire on January 15, 2025. While President-elect Trump recently expressed support for the ILA, there is no indication of actions he may pursue in the event of a prolonged strike.
• The National Highway Traffic Safety Administration announced a final rule that will require enhanced front seat belt warning systems on new vehicles beginning September 1, 2026, and rear seat reminder systems beginning September 1, 2027.
• The New York Times reports certain automakers are struggling with profitability and underutilized plants because “the industry has reverted to its pre-pandemic state, with too many carmakers chasing too few buyers.”
• Pitchbook analysis published on December 11 indicates third-quarter 2024 global venture capital investment in mobility tech declined 21% YOY to 177 deals, while transaction value fell 46% YOY to $4.6 billion. The declines resulted from factors that included uncertainty over mobility-related government policies and initiatives, as well as a significant drop in the autonomous driving segment.
• The Federal Reserve Bank of Chicago will hold its 31^st Annual Automotive Insights Symposium February 4-6, 2025.
• The Center for Automotive Research announced its annual Management Briefing Seminars (MBS) will be held September 15-17, 2025, at the newly-renovated Michigan Central Station in Detroit’s Corktown neighborhood. The event was previously held at the Grand Traverse Resort near Traverse City, Michigan.
• Online car shopping site Amazon Autos is available in 48 cities across the U.S., beginning with launch partner Hyundai. Additional brands are expected on the platform in 2025.

Analysis by Julie Dautermann, Competitive Intelligence Analyst