Foley Automotive Update

Analysis by Julie Dautermann, Competitive Intelligence Analyst

This update helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. Contact your Foley relationship partner, or Ann Marie Uetz, Vanessa L. Miller, or Nicholas J. Ellis, to follow up.

Key Developments

• Foley & Lardner LLP partner Nicholas Ellis is quoted in the Supply Chain Dive article, “How auto supply chain managers can navigate the Baltimore port stoppages,” discussing the recent tragic collapse of the Francis Scott Key Bridge and what the subsequent stoppage at the Port of Baltimore means for automotive supply chains.
• U.S. new light-vehicle sales are projected to reach a SAAR of 16.4 million units in March, according to a joint forecast from J.D. Power and GlobalData.  First quarter 2024 new-vehicle total sales are expected to reach 3.83 million units, representing an increase of 4.5% compared to the same period last year when adjusted for selling days.
• A report in Automotive News provided a summary of near-term expectations for new-vehicle inventory levels and dealer profitability.
• The U.S. Environmental Protection Agency on March 20 announced final emissions standards for 2027-2032 model year light-duty and medium-duty vehicles.  Once fully adopted, projected fleetwide average emissions levels are expected to decline by 44% for medium-duty vehicles, and by nearly 50% for light-duty vehicles relative to the existing standards for the 2026 model year.  According to the accompanying EPA fact sheet, battery-electric vehicles (BEVs) are expected to represent 30% to 56% of new light-duty vehicle sales in the 2030 to 2032 model years, down from a previous projection of 67% by 2032.
• The EPA on March 29 announced final emissions standards for heavy-duty trucks, buses and other large vehicles. The standards vary according to vehicle type, and average emissions reductions range from 25% to 60% by MY 2032.
• The U.S. Department of Energy on March 19 announced a revision to its petroleum equivalent fuel calculation that is expected to improve the assessment of EV efficiency.
• A study by Boston Consulting Group estimates most automakers lose an average of $6,000 on each EV they sell for $50,000, after accounting for consumer tax credits.
• Tesla delivered 386,810 vehicles in the first quarter of 2024, compared to 422,875 vehicles in the first quarter of 2023.
• China’s BYD sold 300,114 fully electric vehicles in the first quarter of 2024, up from 264,647 during the same period last year.

OEMs/Suppliers  

• Stellantis laid off approximately 400 salaried U.S. employees in its engineering, technology and software units, due to factors that included “heightened competitive pressures.”  The automaker also reached agreements in Italy for voluntary layoffs that will affect over 3,000 union employees.
• UAW membership fell 3.3% in 2023 to just over 370,000, according to a filing with the Department of Labor.  This represents the UAW’s lowest membership level since 2009.
• Plastic Omnium changed its name to OPMobility to reflect the expansion of its client base in sustainable mobility, as well as increased capabilities in areas that include lighting and software.
• Nvidia announced a number of partnerships with Chinese automakers to support increased use of artificial intelligence-enabled in-vehicle technology such as voice assistants and driver-assist features.    
• Two executives departed GM amid a software division reorganization following quality issues that resulted in stop-sales of certain vehicles. 

Electric Vehicles and Low Emissions Technology

• Hyundai and its affiliate Kia will recall over 147,000 EVs in the U.S. due to a possible defect in a charging unit that could cause vehicles to lose power while operating. 
• Beginning this month, Ford will cut two-thirds of the roughly 2,100 hourly workers at its F-150 Lightning EV plant in Dearborn, Michigan. The headcount reductions were first announced in January 2024.
• China filed a World Trade Organization complaint against the U.S. over what it described as discriminatory requirements pertaining to EV subsidies in the Inflation Reduction Act.
• Chinese battery maker Contemporary Amperex Technology Co. (CATL) intends to expand in spite of a slowdown in EV sales in certain markets, according to a report in Bloomberg.  
• A number of EV owners are uninformed about the increased prevalence of tire wear that results from greater vehicle weight and higher torque, according to the J.D. Power 2024 U.S. Original Equipment Tire Customer Satisfaction Study.
• Nissan and Mitsubishi plan to jointly develop EVs for the U.S. market.  Nissan intends to launch 16 new electrified models globally by fiscal year 2026 in support of its new business plan.
• Lucid Motors reached an agreement to raise $1 billion in funding from an affiliate of Saudi Arabia’s sovereign wealth fund.
• Hyundai will invest 68 trillion won ($51 billion) over three years in areas that include EVs, battery technology and software-defined vehicles. Separately, the automaker indicated it may manufacture hybrid or plug-in hybrid EVs at a future $7.5 billion plant in Georgia that was previously expected to exclusively produce all-electric vehicles. 
• U.S. EV and plug-in hybrid owners reported greater satisfaction with home charging, according to the J.D. Power 2024 U.S. Electric Vehicle Experience Home Charging Study.
• EVs represented at least 5% of new car sales in 31 countries at the end 2023; and according to Bloomberg analysis, this is a threshold that marks the start of mass adoption.
• Michigan’s chief mobility officer, Justine Johnson, provided an overview of some of the state’s goals for clean energy transportation and EVs in Automotive News.

Automated, Autonomous or Connected Vehicles Technologies

• Automated driving features and software-defined vehicles are among the agenda topics for SAE International’s WCX conference in Detroit on April 16-18.
• An autonomous vehicle shuttle service will operate this summer in Detroit on a 10-mile route between Michigan Central Station and the city’s east riverfront. The pilot project represents a collaboration with the city, Bedrock, Michigan Central and the State Office of Future Mobility and Electrification.

Market Trends and Regulatory

• The Federal Communications Commission rejected two auto industry groups’ requests to reassess a 2020 revision of FCC rules in the 5.9 gigahertz band that shifted part of the spectrum to unlicensed wireless use.
• According to preliminary estimates from the National Highway Traffic Safety Administration, there were 40,990 traffic fatalities in 2023, representing a 3.6% decline from 2022 but remaining significantly elevated compared to pre-pandemic levels.