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 provided an overview of recent state and federal vehicle emissions regulations, as well as a summary of certain legal challenges that were filed concerning these standards. 
• Recent developments in a notable pricing dispute between a supplier and Stellantis were covered in a report by Crain’s Detroit.
• A joint forecast from J.D. Power and GlobalData predicts U.S. new light-vehicle sales will reach a SAAR of 15.6 million units in April. This would be a decline of 0.9% from April 2023 on a selling day adjusted basis.
• New light-vehicle inventory reached 2.8 million units at the beginning of April, representing a 72 days’ supply industrywide, according to estimates from Cox Automotive.
• Volkswagen’s Chattanooga factory will be the first foreign-owned auto plant in the South to unionize after 73% of employees voted to join the UAW. Mercedes-Benz workers in Alabama are expected to vote in May on whether to join the union.
• Honda plans to invest C$15 billion ($11 billion) in new EV and battery production plants in Ontario, Canada. The project will receive an estimated C$2.5 billion in direct and indirect incentives.
• Toyota will invest $1.4 billion in its Princeton, Indiana plant to support battery pack assembly and production of a new three-row all-electric SUV.
• A study from AlixPartners indicates Chinese battery EV manufacturers are “laying groundwork for international expansion,” amid rising consumer awareness of their lower-priced brands.
• The U.S. is pressuring Mexico’s federal government to refuse to provide certain types of incentives for Chinese automakers to establish production plants in the nation, according to unnamed sources in Reuters. 
• A proposed class action suit filed in Georgia against a major automaker and other parties alleged that in-vehicle apps were used to illegally share driver data with consumer reporting agencies and insurance carriers.

OEMs/Suppliers

• GM reported first quarter 2024 net income of $2.9 billion on revenue of $43 billion, representing year-over-year increases of 24% and 7.6%, respectively. First quarter performance was attributed to cost improvements and resilient consumer demand.
• Ford’s first quarter net income fell 24% YOY to $1.3 billion and total revenue increased 3% to $42.8 billion. First quarter results were impacted by unspecified vehicle quality issues, as well as a $1.3 billion loss in the company’s EV unit.
• Stellantis reported its first quarter revenue declined 12% to $44.7 billion, due to lower sales volumes, foreign exchange effects, and the transition to its next-generation vehicles built on new platforms.
• The UAW and Daimler Truck Holding AG reached a tentative four-year labor agreement last week and averted a potential strike.
• Stellantis laid off nearly 200 full-time workers at its Ram pickup truck plant in Sterling Heights, Michigan. This follows a series of recent layoffs that have affected hourly, salaried and supplemental workers. The automaker intends to pursue an unspecified number of additional layoffs in the months ahead.

Electric Vehicles and Low Emissions Technology

• Supplier executives discussed certain strategies to mitigate automakers’ unpredictable EV production plans during a panel discussion at SAE International’s WCX conference in Detroit this month.
• The Environmental Protection Agency on April 24 announced plans to offer approximately $1 billion in grants to fund the electrification of school buses, delivery trucks and other heavy-duty commercial vehicles. The EPA’s Clean Heavy-Duty Vehicles Grant Program is funded through the Inflation Reduction Act.
• Bloomberg Green estimates 600 public fast-charging stations came online in the U.S. in the first three months of 2024, bringing the nationwide total to over 8,000 stations.  The analysis indicates there is a national average of one fast-charging station for every 15 gas stations.
• Honda expects to begin producing its first U.S.-manufactured EVs in Ohio next year.
• BMW will invest an additional $2.8 billion in its Shenyang manufacturing site in China to support the production of all-electric models.  The automaker has reduced EV production costs in certain markets with strategies that included sourcing batteries from suppliers instead of building them in-house, and producing EVs on the same factory lines as hybrid and gasoline-powered vehicles.
• Nissan plans to reduce EV manufacturing costs by using the gigacasting manufacturing process favored by Tesla.
• GM deployed its first vehicle-to-home charging products to residential customers. The first vehicle compatible with GM Energy’s bidirectional charging technology is the 2024 Chevrolet Silverado EV First-Edition.
• Vietnam-based EV manufacturer VinFast will pause construction on a planned $4 billion plant in North Carolina.
• U.S. House Representative Carol Miller (R-WV) on April 15 introduced the End Chinese Dominance of Electric Vehicles in America Act of 2024, (H.R. 7980), to exclude vehicles with components sourced from foreign entities of concern from eligibility for the 30D EV tax credit.
• Toyota’s 2025 Camry will offered only as a hybrid vehicle, and it is expected to arrive in dealerships later this spring.

Automated, Autonomous or Connected Vehicles Technologies

• The National Highway Traffic Safety Administration (NHTSA) will investigate two fatal crashes after a preliminary inquiry revealed Ford’s BlueCruise partially automated driving system was in-use prior to the vehicle collisions.
• U.S. House lawmakers urged the Department of Defense to ban internet-connected vehicles that contain Chinese technology from entering U.S. military bases.
• The Wall Street Journal reports Tesla received tentative approval to launch its “Full Self-Driving” software feature in China.

Market Trends and Regulatory

• NHTSA announced a final rule that would require all passenger cars and light trucks to be equipped with automatic emergency braking (AEB) systems beginning in 2029.