Foley Automotive Update

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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Key Developments

• Foley & Lardner will provide podcast commentary on key trends impacting the automotive supply industry as part of the firm’s participation in the MEMA Original Equipment Suppliers Annual Conference on November 12-13, 2024. To learn more about the conference and to register click here.
• Foley & Lardner partner Andrew Wronski shared insight on the interest the manufacturing sector will receive following the results of the 2024 U.S. presidential election in the American City Business Journals article, “From taxes to tariffs, here’s how Trump’s victory could affect businesses.”
• GlobalData released an initial assessment on November 7 of the impact of the U.S. election on the auto industry. Key themes: tariffs may raise vehicle prices and affect volume growth; autonomous vehicle development could be “fast-tracked under Trump;” projected U.S. EV market share in 2030 is expected to be down 15-20% from GlobalData’s previous baseline forecast; and fewer or delayed EV launches are expected between 2026 and 2028.  
• Reports in Reuters and Bloomberg indicate Trump’s second term is expected to create uncertainty in the auto industry in areas that include revisions to tailpipe emissions standards, the potential repeal of certain EV incentives, and whether adjustments to trade agreements and additional tariffs on foreign component manufacturers could lead to higher vehicle costs.
• The Trump administration could present challenges to the UAW that include appointments to the National Labor Relations Board that affect the union’s ability to win grievances against employers.
• Analysis from the National Automobile Dealers Association estimates U.S. new light-vehicle sales between January and October 2024 totaled 13 million units, up 1.6% year-over-year, and new-vehicle sales in October reached a SAAR of 16 million units.  Through the first ten months of this year, conventional hybrid vehicles represented 9.8% of all new vehicles sold, up 34% YOY, while battery electric vehicle sales in the same period rose 7.9% YOY for a market share of 7.8%.
• NADA predicts total new light-vehicle sales in 2024 will reach 15.7 million units.
• Cox Automotive estimates the average price of a new vehicle in 2024 is $48,205, up 21% from five years ago, and monthly payments on new-car loans average $767, up 17% from four years ago.
• A recent survey from Edmunds found that 73% of respondents were delaying the purchase of a new vehicle due to the cost, and over 62% were waiting because of high interest rates.
• Upcoming artificial intelligence advancements for software-defined vehicles could shift computing away from the cloud to directly onboard the vehicle, according to commentary during Qualcomm’s Snapdragon Symposium excerpted in Wards Intelligence.
• The European Union reaffirmed plans to tighten CO2 limits in 2025 and allow only zero-emissions new cars to be sold in the bloc from 2035, amid pushback from a number of entities to revise the targets.

OEMs/Suppliers

• Toyota’s net profit fell 55% and sales volume fell 20% YOY for the three months ended September 30. The automaker expects vehicle sales to drop 2.2% to 10.85 million units for its current fiscal year, from a previous projection of a 1.3% decline.
• Stellantis reported its global revenue fell 27% year-over-year in the third quarter of 2024, North American vehicle sales dropped 47%, and global vehicle sales fell 20%. The automaker temporarily halted production of the Jeep Grand Cherokee and Dodge Durango SUVs at its Detroit Assembly Complex for one week “to align production with sales” and reduce high inventory levels. In addition, Stellantis will indefinitely lay off 1,100 workers at its Toledo Assembly Complex in response to underperforming sales of the Jeep Wrangler SUVs and Jeep Gladiator pickups.
• Nissan will cut 9,000 jobs and 20% of its global manufacturing capacity to reduce costs by $2.6 billion in its current fiscal year, in response to weak sales in China and the U.S.
• Joseph Fadool was named Chief Executive Officer of BorgWarner, effective February 2025, following the retirement of Frederic Lissalde. Fadool joined BorgWarner in 2010 and he currently serves as the company’s Chief Operating Officer.
• Siemens will acquire Troy, Michigan-based automotive software developer Altair Engineering Inc. for a deal value of approximately $10 billion.
• Aptiv acquired a stake in Chinese autonomous driving technology developer Maxieye Automotive Technology.
• Automotive News provided an update on automakers that are pursuing the testing and deployment of humanoid robots.
• UAW Local 2209 voted in favor of authorizing a strike over staffing issues at GM’s Fort Wayne Assembly truck plant in Indiana. Negotiations between the union and the automaker are ongoing.  

Electric Vehicles and Low Emissions Technology

• Toyota’s North American chief operating officer described U.S. policies to promote accelerated EV adoption as “de facto mandates” that are “not in alignment with consumer demand.”
• Ford will idle the Dearborn, Michigan plant that produces all-electric F-150 Lightning pickup trucks from mid-November until January 6, 2025.
• BYD will delay plans to enter the Canadian EV market following that nation’s implementation of a 100% tariff on imports of Chinese-made EVs.
• Chinese brands represented 8.5% of EV deliveries in Europe in September 2024, compared to 9.6% in the same period one year ago. This represented the third consecutive month of sales declines, following the bloc’s implementation of import tariffs for Chinese-made EVs.
• The Wall Street Journal reports Brazil is the largest overseas market for BYD amid efforts by Chinese EV makers to expand in Latin America.
• GM will recall just over 100 model year 2020-2022 Chevrolet Bolt EVs due to a software issue that may increase the risk of battery fires. Three years ago the automaker recalled over 140,000 Bolts due to fire risks.
• Bloomberg estimates 600 public fast-charging stations began operating across the U.S. in the third quarter of 2024, and there are approximately 9,000 public fast-charging sites nationwide. Year-to-date, the number of public fast-charging sites has risen by 35% compared to the same period in 2023.
• Automotive News provided an overview of potential market benefits and challenges with the European Union Battery Regulation, which was announced last year. As part of the regulation’s phase-in period, certain EV battery carbon footprint disclosures will be required beginning in February 2025, and EVs in the bloc will need a digital battery passport by early 2027 to enable supply chain tracking and to convey certain sustainability and lifecycle performance measures.
• The U.S. Department of Energy announced $44.8 million in funding from the Bipartisan Infrastructure Law for eight projects that support EV battery and battery component recycling.

Automated, Autonomous or Connected Vehicles Technologies

• Lyft announced three new partnerships with autonomous technology providers Mobileye, May Mobility, and Nexar, intended to “connect the Lyft community with future AV rides in the Lyft app.”
• Toyota and Japanese telecommunications company NTT will partner to invest $3.3 billion between now and 2030 to develop artificial intelligence applications for autonomous driving.
• Daimler Truck subsidiary Torc Robotics is testing its autonomous driving technology on a closed-course multilane test track in Texas, in preparation for launching the commercial operation of fully autonomous trucks by 2027.
• Automated driving system developer Plus is working with Traton Group to test autonomous heavy-duty trucks in Texas and Sweden ahead of a potential commercial launch in 2027.
• Autonomous technology company Aurora Innovation could begin commercial service of driverless semis on a route between Dallas and Houston in April 2025.

Market Trends and Regulatory

• The National Highway Traffic Safety Administration closed an investigation into over 400,000 Ford vehicles that had the risk of engine failures after the automaker replaced engines or extended the warranty on certain vehicles.
• NHTSA opened an investigation into 1.4 million Honda and Acura vehicles in response to reports of potential engine failures.
• The California Air Resources Board on November 8 approved stricter targets for the state’s Low Carbon Fuel Standards (LCFS) that could increase prices at the pump by up to 65 cents a gallon. The initiative increases the state’s emission reduction targets, and it is expected to help fund charging infrastructure for zero-emission vehicles in the state.
• Passenger car retail sales in China rose 11.3% YOY in October, due to government subsidies and steady demand, according to data from the China Passenger Car Association excerpted in The Wall Street Journal.