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

The most recent article in Foley & Lardner LLP’s Auto Trends 2023 Series shares insights into product liability trends in areas including electric vehicles, fully or partially autonomous vehicles, and cybersecurity and data privacy safety. Click HERE to subscribe to the series.
U.S. new light-vehicle sales are projected to reach 1.31 million units in April, representing a SAAR of 15.5 million units, according to a joint forecast from J.D. Power and LMC Automotive.
Foley & Lardner provided an overview of a recently proposed rule from the National Highway Traffic Safety Administration (NHTSA) which impacts aspects of the Whistleblower Program.
Key findings from Deloitte’s 2023 Automotive Supplier Study include the potential for greater consolidation in the supply base due to factors that include operational challenges resulting from multiple crises over the past three years, the ongoing effects of an inflationary environment, and the industry’s transition to electrification and software-defined vehicles.
Kelley Blue Book estimates over 250,000 electric vehicles were sold in the first quarter of 2023, representing 7.2% of U.S. new-vehicle sales and an increase of nearly 45% from the first quarter of 2022.
Morgan Stanley analysis predicts established global automakers will encounter a “more aggressive push” from Chinese automakers such as BYD to sell competitively priced EVs outside of China.
GM and Samsung SDI will invest over $3 billion to build a new electric vehicle battery plant at an unspecified U.S. location, and the facility is expected to begin operations in 2026.The automaker previously announced plans to operate three battery plants in Michigan, Ohio and Tennessee with LG Energy Solution through its joint venture, Ultium Cells LLC.
The percentage of subprime auto borrowers in the U.S. who were at least 60 days late on their bills recently surpassed levels experienced in 2009 amid the financial crisis, according to data from Fitch Ratings excerpted in Bloomberg.
The Federal Communications Commission approved a waiver which allows certain applicants to deploy cellular vehicle-to-everything (C-V2X) technology on portions of the 5.9 GHz band prior to the adoption of final C-V2X-based rules.

OEMs/Suppliers

GM reported net income of $2.4 billion on revenue of $40 billion for the first quarter of 2023, compared to $2.9 billion and $36 billion, respectively, for the same period last year.GM attributed the Q1 2023 profit decline to the cost of job cuts and reduced demand in China, and noted overall results for the quarter surpassed its expectations.
Toyota reported global sales of 9.61 million units for its fiscal year which ended March 31, 2023, compared to 9.51 vehicles the previous year. The automaker did not provide sales targets for its new fiscal year that started in April.
Reuters reports Ford implemented an intensive quality inspection program at its Kentucky Truck plant in preparation for the launch of the redesigned Super Duty pickup truck. CEO Jim Farley previously expressed the need to improve quality and reduce warranty costs as part of a broader effort to address cost disadvantages with certain competitors. Ford will report first quarter earnings May 2.
Bosch will acquire the assets of California-based chipmaker TSI Semiconductors, and invest another $1.5 billion to expand production of silicon carbide chips (SiC).
The Detroit News reports Stellantis will offer voluntary buyout packages to 31,000 hourly employees and 2,500 salaried workers, amid efforts to control costs and significant investments in vehicle electrification.

Electric Vehicles and Low Emissions Technology

South Korean EV battery maker LG Energy Solution announced its first quarter 2023 profit more than doubled, due to factors that include increasing U.S. battery sales and Inflation Reduction Act subsidies.
The Wall Street Journal reports rising global demand for copper in applications that include electric vehicles will lead to significant supply gaps of the metal within the next decade.
GM intends to stop producing Chevrolet Bolt EVs at the end of this year, amid plans to increase production of higher-margin electric trucks.
An upcoming Hyundai – SK On joint venture battery plant in Bartow County, Georgia will produce enough batteries each year to power 300,000 EVs.Initial plans for the $5 billion plant were announced in December 2022, and operations are expected to begin in 2025.
Volkswagen will invest over $7 billion CAD in an upcoming battery cell plant in St. Thomas, Ontario that will be operated by its subsidiary PowerCo. The site location was previously announced in March 2023, and it is expected to begin operations in 2027. This will represent the second major battery facility in Ontario following the $5 billion CAD Stellantis and LG Energy Solution plant, which is expected to begin operations in 2024.
Canadian EV charging company FLO will manufacture Level 3 fast chargers at its Auburn Hills, Michigan facility, and ship them nationwide.
The University of Michigan and the state have finalized a contract for a $130 million Electric Vehicle Center that was initially announced last year. The Michigan Electric Vehicle Center will focus on accelerating R&D, workforce development, and “establishing advanced campus infrastructure and facilities to support both research and education.”
Stellantis announced an agreement to purchase battery-grade nickel and cobalt sulphate from Australia’s Alliance Nickel Ltd. over an initial five-year period.

Automated, Autonomous or Connected Vehicles Technologies

Autonomous technology developer May Mobility will invest $18 million to expand its headquarters and R&D presence in Ann Arbor, Michigan. The company operates on-demand autonomous shuttle services in several areas, including a retirement community in Arizona.
Autonomous trucking company Kodiak Robotics and truckload carrier C.R. England launched a pilot program in April to ship certain Tyson Food products between Dallas and San Antonio, Texas.

Market Trends and Regulatory

Law360 reports eighteen state attorneys general asked NHTSA to recall certain Hyundai and Kia vehicles which lack standard anti-theft devices that insure car ignitions cannot be started without their keys. The vehicles have experienced elevated levels of theft as users of TikTok and other social media platforms share information to facilitate break-ins.
California regulators voted unanimously to adopt Advanced Clean Fleets, which requires medium- and heavy-duty truck operators in the state to phase in increasing levels of zero-emission vehicles.

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