Key Developments

• The National Automobile Dealers Association estimates U.S. new light-vehicle sales reached a SAAR of 15.7 million units in January, representing an increase of approximately 4.5% from January 2022 but remaining lower than pre-pandemic volumes.

• Auto loan rates for new vehicles increased by over three percentage points in 2022, and the average monthly payment is over $700, according to analysis from Cox Automotive.

• Foley & Lardner attorneys summarized major components of the U.S. Environmental Protection Agency’s finalized new emission standards for heavy-duty highway vehicles and engines which begin with the 2027 model year.

• Hydrogen-related patenting recently experienced notable participation from the automotive industry, according to a Foley & Lardner overview of a joint report by the European Patent Office and the International Energy Agency.

• A new law in California regulating consumer notices for partial driving automation features went into effect last month, according to an update from Foley & Lardner.

• The Alliance for Automotive Innovation expressed support for a U.S. Treasury Department decision to update the vehicle classification standard used to determine certain price limitations for clean vehicle tax credits under the Inflation Reduction Act.As a result of the update, more electric crossovers and SUVs are expected to qualify for the tax credit of up to $7,500.

• A report in The Wall Street Journal provides an overview of the supply chain for electric vehicle battery components.

• Automotive News (subscription) indicates suppliers may experience “another rough year” in 2023, amid ongoing market challenges that include volatile commodity pricing and elevated interest rates.

• A new report from the University of California, Davis, and the Climate and Community Project estimates that by 2050, the projected lithium requirements of the U.S. EV market could require up to triple the amount of lithium currently produced for the entire global market.

OEMs/Suppliers

• Toyota was the top-ranked automaker based on unit sales for the third consecutive year in 2022. Incoming CEO Koji Sato is expected to face a number of challenges in maintaining Toyota’s market leadership, including how to position the company for growth amid the industry’s shift to electrification.

• GM reported an annual profit of $9.9 billion on total revenue of $156.7 billion in 2022, compared to $10 billion and $127 billion, respectively, in 2021. The automaker is planning $2 billion in cost savings over the next two years through strategies that include reducing product complexity, limiting hiring, and using attrition to manage headcount.

• Ford posted a $2 billion profit loss in 2022, which CEO Jim Farley attributed to issues including supply chain challenges and the need for the company to improve significantly its management of costs and quality.

• The Associated Press reports Renault and Nissan reached a decision to restructure their alliance of over two decades, with both companies agreeing to equal ownership stakes.

Electric Vehicles and Low Emissions Technology

• Tesla reported an annual profit of $12.6 billion on total revenue of $81.5 billion for 2022, up from $5.5 billion and $53.8 billion, respectively, in 2021.The company is targeting 1.8 million vehicles in 2023, representing growth of approximately 37%. 

• Electric vehicle battery demand for mined graphite could exceed supply by 2030, according to data from Benchmark Mineral Intelligence excerpted in The Wall Street Journal.

• Tesla will invest $3.6 billion into expanding its existing gigafactory in Nevada, and in building two new facilities in the state: a 100-gigawatt-hour battery cell factory and the company’s first high-volume Semi truck factory.

• BMW will invest over $860 million to produce electric vehicles and high-voltage batteries in San Luis Potosí, Mexico. Production is expected to begin in 2027.

• Ford will reduce prices on its electric Mustang Mach-E crossover by 1.2% to 8.8%, depending on the vehicle configuration.

• GM announced a $650 million equity investment in Lithium Americas, and the companies plan to jointly invest in developing the Thacker Pass mine in Nevada. Production is expected to begin in 2026, and the lithium originating from this project could supply up to 1 million EVs per year.

• Electric vehicle battery maker Our Next Energy (ONE) raised $300 million in a Series B funding round, bringing the Michigan-based company’s valuation to more than $1 billion.

• Electrify America and TravelCenters of America announced a partnership to install 1,000 chargers at 200 TravelCenters locations over the next five years.

Automated, Autonomous or Connected Vehicles Technologies

• A recent Consumer Reports assessment of 12 active driving assistance (ADA) systems identified the leading technologies as Ford’s BlueCruise, Cadillac’s Super Cruise and Mercedes-Benz Driver Assistance.

• Lawmakers in California introduced legislation requiring human operators to be present in autonomous vehicles weighing over 10,000 pounds.

Market Trends and Regulatory

• Bloomberg reports the U.S. Customs and Border Protection agency has started detaining imports of certain types of aluminum products due to concerns over the use of forced labor in China’s Xinjiang region.

• Fitch Ratings’ economic forecast for 2023 includes a neutral rating for the auto industry, with the expectation easing supply chain constraints will help offset weaker macroeconomic conditions. [Full report requires subscription]

• Layoffs in the tech sector may result in recruiting opportunities for automakers that are seeking to strengthen capabilities areas related to software, electrification and batteries, according to Business Insider.