Analysis by Julie Dautermann, Competitive Intelligence Analyst

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

Key Developments

• Global sales of fully electric vehicles reached approximately 7.8 million units in 2022 and a market share of roughly 10%, according to estimates from LMC Automotive and EV-Volumes.com excerpted in The Wall Street Journal.

• Over 800,000 fully electric vehicles were sold in the U.S. last year, representing a market share of 5.8%, according to analysis by Kelley Blue Book.

• More than 5.6 million new-energy vehicles were sold in China in 2022, according to data from the China Passenger Car Association excerpted in Bloomberg. The category of NEVs includes fully electric and hybrid vehicles.

• Automotive OEMs’ profit margins were nearly 3 percentage points higher than that of automotive suppliers on average in the third quarter of 2022, according to analysis by Bain & Company published January 13.The analysis predicts margin declines in 2023 will likely be due to issues that include a potential recession and the “worsening global economic situation.”

• Significant issues impacting U.S. electric vehicle adoption in the near-term include the implementation of federal incentives, progress in establishing a national charging network and developing solutions for utility interconnection delays, according to a report in Utility Dive.

• Five groups including the UAW sent a letter urging President Biden to implement the Inflation Reduction Act “as intended, without delays or technical changes,” amid concerns by nations which raised the possibility of trade disputes over certain incentives for electric vehicles. U.S. Trade Representative Katherine Tai indicated the administration is working with various nations to address EV subsidy concerns.

• An arbitration trade panel ruled in favor of Mexico and Canada in a dispute with the U.S. pertaining to the interpretation of automotive rules of origin in the USMCA.

OEMs/Suppliers

• Bosch plans to invest approximately $1 billion in a new R&D and assembly center in Suzhou to develop components for new-energy vehicles in China. The first phase of the project is expected to be completed by mid-2024.

• Toyota set a production target of approximately 10.6 million vehicles in 2023, compared to guidance of 9.2 million vehicles for its fiscal year through March. The automaker noted downward risk of approximately 10% in 2023 production due to potential market challenges including parts shortages and disruptions from COVID-19.

• GM announced plans to invest $918 million at four facilities in Michigan, Ohio and New York for production of V-8 engines and electric vehicle parts. The bulk of the investment is focused on the automaker’s sixth generation Small Block V-8 engine.

• Ford plans to cut up to 3,200 positions in Europe in product development and administrative roles, with the majority of the eliminations affecting locations in Germany.

Electric Vehicles and Low Emissions Technology

• The U.S. Department of Energy awarded $42 million in funding for 12 projects intended to further the development of advanced electric vehicle batteries. The selected projects are part of the Electric Vehicles for American Low-Carbon Living (EVs4ALL) program, and include 24M Technologies, Ohio State University, Solid Power, the University of Maryland and Zeta Energy.

• CNBC reports Michigan, Georgia and Kentucky are expected to “dominate electric vehicle battery manufacturing in the U.S. by 2030. According to the article, each state will be capable of producing between 97 and 136 gigawatt hours’ worth of EV batteries per year by the end of the decade. Kansas, North Carolina, Ohio and Tennessee are also anticipated to be key players, with planned capacity for between 46 and 97 gigawatt hours’ worth of EV battery production annually by 2030.

• GM announced the 2024 Chevrolet Corvette E-Ray hybrid will be available later this year at a starting price of more than $104,000.

• National Transportation Safety Board Chair Jennifer Homendy expressed concerns that “heavier curb weights and increasing size, power and performance” of vehicles including EVs could contribute to the risk of severe injury and death for road users. Homendy also noted certain EV models were several thousand pounds heavier than equivalent combustion models.

• Tesla’s recent price cuts are expected to make certain vehicles such as the Model Y eligible for a U.S. federal EV tax credit of up to $7,500.

• Reuters reports China’s BYD delivered 1.86 million battery-electric and plug-in hybrid vehicles in 2022 (mostly to customers in mainland China).The article notes BYD was the top-ranked automaker in 2022 measured by unit sales of the combined category of BEVs and hybrids.

• Stellantis announced a five-year agreement with Finland-based Terrafame Ltd. to secure nickel sulphate for electric vehicle batteries beginning in 2025.

• Shell will acquire U.S. electric vehicle charging company Volta Inc., in a deal that is expected to include approximately 3,000 charging points.

• Lucid Group produced 7,180 electric vehicles in 2022, and delivered 4,369 vehicles. The company’s production guidance was in the range of 6,000 to 7,000 vehicles.

• Hertz announced the launch of a new public-private initiative, Hertz Electrifies, beginning in Denver, Colorado. The program will bring up to 5,200 EV rentals to the city, as well as installations of Level 2 and fast-charging stations at Denver International Airport and Hertz locations.

• The Wall Street Journal reports Uber is working with certain automakers to develop lower-cost EVs intended for its ride-sharing and delivery businesses.

Automated, Autonomous or Connected Vehicles Technology

• Volvo Group invested an undisclosed amount in Canadian autonomous trucking technology company Waabi Innovation.

Market Trends and Regulatory

• The U.S. Environmental Protection Agency argued it acted within its authority in restoring California’s ability to set its own greenhouse gas standards, according to a brief filed amid a suit involving a challenge to the decision by over a dozen states.