Foley Automotive Update

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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Key Developments

• A number of auto suppliers are reducing R&D and engineering budgets in response to cost pressures, according to a report in Crain’s Detroit.
• Declining automotive plant capacity utilization in the U.S. is expected to be a significant industry risk amid the unpredictable transition to EV production, according to analysis from GlobalData featured in Automotive News.
• Ford revised its electrification strategy in areas that include canceling previously planned three-row electric SUVs, postponing a next-generation full-size electric pickup, and reducing annual capital expenditures on battery electric vehicles. These changes will cost the automaker up to $1.9 billion.
• Stellantis will delay a commitment in its 2023 labor agreement to reopen an indefinitely idled assembly plant in Belvidere, Illinois. This follows an announcement that up to 2,450 hourly workers in Michigan could be laid off due to the decision to end production of the Ram 1500 pickup at its Warren Truck Assembly plant.
• Over 1,000 salaried employees, including 600 in Michigan, are reported to have been laid off from GM’s software and services division.
• Bloomberg described Michigan as a “must-win” for either candidate to achieve victory in the 2024 presidential election.
• Former President Donald Trump indicated that if elected, he could take steps to discourage U.S. imports of vehicles manufactured by global automakers in Mexico. Trump also suggested he may eliminate a federal tax credit of up to $7,500 for EV purchases.
• The Department of Transportation announced plans to support implementation of vehicle-to-everything (V2X) technologies in cars and on roadways across the U.S. by 2036.
• Texas Attorney General Ken Paxton filed suit against GM over allegations the automaker collected data about drivers and sold the information to third parties without consent.
• Natron Energy will invest $1.4 billion to produce sodium-ion batteries at a new plant in North Carolina.
• Automotive News provided overviews of solid-state batteries and other emerging EV battery chemistries that could someday be adopted as alternatives to lithium-ion batteries.

OEMs/Suppliers 

• GM plans to reduce its headcount in China in support of operational restructuring in the nation. A number of global automakers have recently lost market share in China amid increased competition from the nation’s domestic automakers.
• Stellantis shut down production for a week at its Trenton Engine Complex in Michigan to “balance engine inventories.”
• Michigan-based driveline supplier Loc Performance will be acquired by Germany’s Rheinmetall Group for approximately $950 million. 
• Rory Harvey, Executive Vice President and President of GM Global Markets, will assume responsibilities for the automaker’s North American market following the departure of Marissa West.
• MG Motor plans to build a manufacturing plant and R&D center in Mexico at an unspecified future date. The automaker is owned by Chinese state-owned SAIC Motor (Shanghai Automobile Industry Corporation).
• Nissan’s tests of automotive “cool paint” showed that roof panel temperatures were reduced by 22 degrees Fahrenheit, and vehicle interiors by nine degrees. The company noted that commercialization will present challenges because the paint is six times thicker than typically used paint.

Electric Vehicles and Low Emissions Technology

• Retail sales of EVs and hybrids in China rose by 37% year-over-year in July and comprised a record-high 51% of the nation’s total passenger-vehicle sales, according to data from the China Passenger Car Association featured in Reuters. Total new-vehicle sales in China fell by 3% in July, while exports rose 20% year-over-year as the nation’s automakers continue to expand EV sales into global markets.
• The growth of EV sales in China could increase the nation’s impact on the earnings of automotive chipmakers, according to an editorial in Bloomberg.
• Registrations of Chinese-made EVs in Europe declined by 45% month-over-month in July 2024, following the EU’s recently implemented provisional import tariffs. 
• Production of the Polestar 3 electric SUV began at Volvo’s Ridgeville, South Carolina plant. Polestar is a subsidiary of Volvo, which is owned by Chinese automaker Geely.
• A new study from EV charger operations and maintenance solutions provider ChargerHelp found 26% of charging stations did not accurately report whether they were offline or available. The report assessed four years of data from 20,000 monitored chargers in the U.S.
• ChargePoint Holdings announced its new Omni Port plug is designed to work with most types of battery electric vehicles, amid efforts to assist automakers in adopting the connector standards used by Tesla.
• UL Solutions invested over $70 million to open its North America Advanced Battery Laboratory in Auburn Hills, Michigan.
• A large fire in a residential parking lot in South Korea that originated with an electric Mercedes-Benz EQE has led to calls for automakers in the nation to voluntarily disclose EVs’ battery brands.
• Electric vertical takeoff and landing (eVTOL) company Archer Aviation Inc. will receive up to $370 million from its largest shareholder, Stellantis, to support production of the Midnight air-taxi.

Automated, Autonomous or Connected Vehicles Technologies

• Free autonomous Ford E-Transit shuttle rides will be offered to the public on a 10.8-mile route from Detroit’s Corktown to East Riverfront neighborhoods. The pilot program involves the city, Bedrock, Michigan Central and the State Office of Future Mobility and Electrification.
• Chinese robotaxi operator WeRide received a permit to test autonomous vehicles with passengers in areas in and near San Jose, California.
• Intel will partner with luxury EV maker Karma Automotive to develop technology for software-defined vehicles.

Market Trends and Regulatory

• Auto credit across all lender types and channels declined for a fourth consecutive month in July, and fell 1.5% compared to the same period last year. 
• A number of younger consumers have less interest in obtaining a driver’s license and vehicle ownership, according to a report in The Wall Street Journal.