Foley Automotive Update

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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Key Developments

• Foley & Lardner announced the 2024 installment of its Auto Trends series—A Year in Review: Updates, Trends and the Road Ahead. This series delves deep into the transformative forces shaping the automotive world by providing weekly insights and analysis tailored to help business leaders navigate a shifting market landscape. The first two articles in the series address the regulatory themes and outlook for the National Highway Traffic Safety Administration, and potential scenarios for a realignment of the EV and EV infrastructure market. Click HERE to subscribe to updates.
• Foley & Lardner partner Andrew Wronski shared insights about the future of U.S. manufacturing under President-elect Donald Trump’s administration in the Pitchbook article, “Manufacturers prep for a new tariff regime.”
• President-elect Donald Trump in a November 25 social media post stated he would impose additional 10% tariffs on goods from China, and 25% tariffs on all products from Mexico and Canada for the nations’ alleged facilitation of illegal immigration and fentanyl abuse in the U.S. In response, officials from Canada and Mexico indicated retaliatory tariffs would be pursued. [News coverage of this development is rapidly evolving.]
• The cost of tariffs on imported vehicles or components would eventually be passed along to consumers in the form of higher vehicle prices, according to commentary from S&P Global Mobility. The New York Times reportedthe effects of U.S. tariffs on Mexico’s auto industry “would be profound, affecting the price in the United States of popular models like Ford Maverick pickups, Chevrolet Equinox sport-utility vehicles and several variations of Ram trucks.”
• A number of provincial leaders in Canada recently called for a bilateral trade agreement between the U.S. and Canada that would exclude Mexico. In response, Prime Minister Justin Trudeau indicated that including Mexico in the U.S.-Mexico-Canada trade agreement is his “first choice,” but he is “leaving all doors open.” Political leaders in the U.S. and Canada have expressed concerns over the potential for Chinese goods to avoid tariffs by entering the North American market through Mexico, a claim Mexican President Claudia Sheinbaum has disputed, as well as the possibility that Chinese companies such as BYD could soon establish manufacturing operations in Mexico.
• As part of a goal to dismantle Biden administration policies that have been described as equivalent to an “EV mandate,” the incoming Trump administration signaled an intent to weaken the National Highway Traffic Safety Administration’s Corporate Average Fuel Economy (CAFE) standards and the Environmental Protection Agency’s tailpipe emissions requirements. The first Trump administration overturned similar Obama-era vehicle fuel economy and emissions regulations.
• The Alliance for Automotive Innovation urged President-elect Donald Trump to maintain the $7,500 consumer tax credit for qualifying EV purchases, and to establish policies to accelerate the deployment of autonomous vehicles. The industry association also suggested revisions to vehicle emissions and fuel-economy regulations, as well as the need to rethink a requirement to equip nearly all new light vehicles with advanced automatic emergency braking systems by 2029.
• Wood Mackenzie analysis indicates a potential revision or repeal of federal EV subsidies, as well as fuel economy and vehicle emissions rules,could lower projected U.S. EV sales by nine percentage points to 23% of new light vehicles by 2030. The analysis also predicts hybrid vehicles could achieve a U.S. market share of 18% by 2030.
• Consultancy AlixPartners predicted that up to $129 billion of EV investments in North America through 2027 are “at risk” due to anticipated Trump administration policiesthat are expected to be unfavorable to EVs, as well as the expectation automakers will delay or cancel BEV models and further reduce electrification expenditures.
• Members of President-elect Donald Trump’s transition team indicated that establishing a federal framework for autonomous vehicles could be among the Transportation Department’s top priorities, according to unnamed sources in Bloomberg.
• Foley & Lardner provided highlights from the MEMA Original Equipment Suppliers Annual Conference held on November 12 and 13 in Novi, Michigan. During the conference, at least one automotive analyst remarked on the risk of excessive inventory levels and underutilized manufacturing capacity.

OEMs/Suppliers

• Automotive News summarized remarks by Ford and GM regarding the automakers’ scenario planning ahead of the incoming Trump administration. Stellantis is exploring potential revisions to its manufacturing and sourcing strategies in the event Trump administration policies affect supply chains, and the automaker indicated it could revisit a plan to expand production and sourcing from lower-cost countries if new tariffs are imposed.
• GM will lay off approximately 1,000 workers worldwide, and a significant portion of the reductions will affect employees at the Global Technical Center in Warren, Michigan. This follows layoffs of over 1,000 software and services employees in August 2024.
• A report in The Detroit News estimates Stellantis has laid off over 3,750 hourly workers in the U.S. in recent months.
• Ford will eliminate 4,000 employees in Europe, equivalent to 14% of the region’s workforce, by the end of 2027 because of economic challenges, increased competition and weaker-than-anticipated EV sales. The majority of the reductions will occur in Germany.
• Volkswagen’s union workersin Germany could begin mass walkouts in December if an agreement is not reached during negotiations over the automaker’s planned cost reductions. VW’s labor costs in Germany are reported to be higher than competitors that include BMW and Mercedes.
• Ford will reallocate 400 hourly workers following reduced Bronco production at the Michigan Assembly Plant in Wayne, MI.

Electric Vehicles and Low EmissionS Technology

• During a panel at the MEMA Original Equipment Suppliers Annual Conference, purchasing executives at three major automakers assured suppliers of transparency for evolving product plans and EV programs.
• Volkswagen increased its potential investment in Rivian by $800 million to $5.8 billion, as part of a joint venture to advance both in-vehicle software capabilities and EV development.  VW previously invested $1 billion in the EV maker as part of a collaboration announced earlier this year.
• S&P Global Market Intelligence estimates global private equity and venture capital deal value in EVs and EV components reached $3.32 billion in the first three quarters of 2024, compared to $4.03 billion raised by non-EV companies in the same period.
• Global private equity deal value in EV charging infrastructure from January through October 18, 2024, reached $1.04 billion, according to data from S&P Global Market Intelligence. This compares to a deal value of $1.11 billion in full-year 2023.
• Swedish battery maker Northvolt AB filed for Chapter 11 bankruptcy protection in the U.S. Separately, Northvolt recently sold certain production assets to Lyten, a California-based lithium-sulfur battery maker.  
• Rivian received approval for a conditional loan of up to $6.6 billion from the Department of Energy to expand EV production. Separately, LG Energy Solution was awarded a five-year battery supply agreement for Rivian’s R2 crossover model. 
• Ford will no longer participate in a joint venture manufacturing plant in Quebec that will produce battery materials for EVs. Construction on the cathode active materials plant is already underway and it is expected to continue, according to a report inLa Presse.
• Workers at the Ford – SK On battery joint venture plant in Kentucky signed union authorization cards to begin a campaign to join the UAW. 
• Stellantis delayed the launch of the 2025 Ram 1500 REV electric pickup truck and its range-extended version to the first half of 2025 from the end of this year. The automaker is also working toward two additional EV launches, the Dodge Charger Daytona muscle car and the Jeep Wagoneer S SUV.
• EVgo hopes to close a U.S. Energy Department $1.05 billion conditional loan guarantee for up to 7,500 fast-charging stalls ahead of the incoming Trump administration. 
• Chinese EV makers delivered 9.75 million EVs to mainland buyers in the first ten months of 2024, reflecting an increase of 34% compared to the same period last year.
• BYD could surpass Ford in worldwide annual shipments this year, and the milestone would establish the Chinese EV maker as a top 10 global automaker measured by unit volumes.
• California Governor Gavin Newsom plans tooffer EV rebates to consumers in the state if the federal tax credit of up to $7,500 for qualifying EV purchases is eliminated.
• Stellantis plans to add a hybrid model to the Jeep lineup sometime next year, according to an announcement at the Los Angeles Auto Show.
• Kia intends to produce the 2025 EV6 compact electric crossover at its plant in Georgia, and the vehicle will begin sales in the first half of next year.
• Hyundai’s 2026 Ioniq 9 electric SUV will have three-row seating and an estimated 300 miles of range.
• Hyundai and Kia will recall over 200,000 EVs in North America over a defect that may cause the loss of drive power.

Automated, Autonomous or Connected Vehicles Technologies

• GM autonomous driving unit Cruise agreed to pay a $500,000 criminal fine to end claims that it made false statements to federal investigators after one of its vehicles struck a pedestrian. This follows a $1.5 million civil penalty for the same incident.
• Autonomous technology developer May Mobility launched robotaxi operations in Ann Arbor, Michigan, without human backup drivers in the vehicles. The company previously established driverless operations in Sun City, Arizona.

Market Trends and Regulatory

• Recent appointments announced by the incoming Trump administration include: former Wisconsin Rep. Sean Duffy to serve as the next secretary of the Department of Transportation; Oregon Rep. Lori Chavez-DeRemer, described as a “pro-union Republican,” to lead the Labor Department; Cantor Fitzgerald CEO Howard Lutnick to head the Commerce Department and have “additional direct responsibility” for the U.S. Trade Representative’s office; and Tesla CEO Elon Musk and entrepreneur Vivek Ramaswamy to lead a new Department of Government Efficiency tasked to “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies.”
• The National Highway Traffic Safety Administration fined Ford $165 million over claims the automaker delayed the recall of more than 600,000 vehicles with defective rearview cameras. This represents the second largest civil penalty in the agency’s history. Less than a week later, NHTSA opened separate investigations into 457,000 Ford Bronco Sport SUVs over the potential for vehicles to lose power, and roughly 113,000 Ford Expeditions due to the possibility of faulty seat belts.
• New passenger car registrations in Europe reached 8.9 million units for the first ten months of 2024, reflecting growth of less than 1% when compared to the same period in 2023.
• In the past decade, venture capitalists have invested approximately $120 billion globally into shared mobility service businesses such as ride-hailing and station-based bike systems.
• The Federal Communications Commission announced final rules governing cellular-vehicle-to-everything technology in the 5.9 GHz band. This is expected to promote the use of 30 megahertz of spectrum previously reserved for dedicated short-range radio communications for in-vehicle and roadside C-V2X units.