Foley Automotive Report – July 2022 – 2 | Foley & Lardner LLP

Analysis by Julie Dautermann, Competitive Intelligence Analyst

This report helps automotive suppliers inform their legal and operational decisions to help them address challenges and seize opportunities.

Key developments

  • Foley & Lardner Cover federal legislative and regulatory developments impacting autonomous and electric vehicles, as well as semiconductors and other supply chain challenges, at OESA Mobility Providers Forum on August 25, 2022 at SRI International in Silicon Valley. OESA members and guests can register HERE to participate.
  • S&P Global Mobility projects Global production of light vehicles in 2022 will reach 80.8 million unitswhile noting that a near-term pickup in demand in Greater China is being offset by broader indications of “deteriorating economic conditions.”
  • Inventory of new light vehicles in the United States was estimated at 1.12 million units at the end of June, representing a 38-day supply, according to the analysis of Cox Automotive.
  • As part of an effort to mitigate costs, Reuters reports Toyota will postpone plans to unilaterally demand lower prices from suppliers this year.
  • Volkswagen Group announcement the departure of CEO Herbert Diess following a vote by the supervisory board. Diess will be replaced by Porsche CEO Oliver Blume.
  • Bosch intends to invest 3 billion euros in its semiconductor business by 2026, in areas such as testing, research and production.
  • The US Senate can vote this week on legislation to fund the semiconductor industryas part of a larger package designed to increase the country’s competitiveness with China.
  • Electric vehicles and low-emission technologies:
    • A Foley & Lardner blog post shares key takeaways regarding the upward trend in hydrogen fuel cell patent applications.
    • Ford could cut 4,000 to 8,000 employees to position the company for the transition to electric vehicles, according to unconfirmed reports in The Wall Street Journal and Bloomberg.
    • According analysis speak Automotive Research Centercar manufacturers have announced $24 billion in electric vehicle investments in the first five months of 2022nearly double the amount for the same period last year.
    • Ford announcement details of his battery capacity plannotably that it has secured 100% of the battery cell capacity needed to achieve a production target of 600,000 EVs in 2023, and 70% of the capacity required to produce 2 million EVs by 2026.
    • BloombergNEF predicts world battery prices will increase this year for the first time in over a decadeincreasing slightly to an average of $135/kWh from $132/kWh in 2021, according to data taken from Utility diving. The increase is the result of supply chain challenges, as well as inflation and rising commodity prices.

Market trends and regulations

  • GM and Ford petitioned NHTSA obtain temporary waivers for the inclusion of certain types of controls in vehicles equipped with an automated driving system intended for limited uses such as carpooling and delivery services.

OEMs/suppliers

  • Continental will invest more than $40 million to build a hydraulic hose plant in San Luis Potosi, Mexico, with plans to begin production in 2024.
  • The global shortage of semiconductors is described as “more acute” in China because the nation is “almost entirely” dependent on chips imported from Taiwan, Europe and the United States, according to a report published in Reuters.
  • Stellantide will end a joint venture with the Chinese automaker GAC (which produced Jeep vehicles) due to a decision to pursue an “asset-light” approach in the country, as well as “lack of progress” with previous plans to secure a majority stake in the business.
  • Semiconductor manufacturer SkyWater Technology Inc. announcement plans to invest $1.8 billion in a chip research and manufacturing facility in Indiana. SkyWater serves a range of markets, including the automotive industry.

Connected/Autonomous Vehicles and Mobility Services

  • ABI research projects last mile delivery revenue will rise from $70 million in 2022 to $670 million in 2030, according to estimates taken from Handling and logistics. Growth opportunities are expected for autonomous delivery vehicles as companies increase in size amid growing customer interest in fast, contactless delivery.

Electric vehicles and low-emission technologies

  • The US Postal Service announcement at least 40% of its new Next Generation Delivery Vehicles (NGDV) and commercial off-the-shelf (COTS) vehicles will be BEVwhich is a significant increase from previous targets set out in its multi-billion dollar initiative to replace its fleet.
  • Amazon started deliveries using custom electric vans of Rivian in more than a dozen cities, with the goal of using the vehicles in more than 100 cities by the end of the year.
  • walmart signed an agreement purchase 4,500 electric delivery vans from Canou, with the possibility of purchasing up to 10,000 units. Walmart is expected to receive the first deliveries of Canoo’s Lifestyle delivery vehicle in 2023.
  • panasonic will invest up to $4 billion to build a new electric vehicle battery plant in De Soto, Kansas that will employ up to 4,000 workers. The company received a total incentive package valued at $829.2 million.
  • redwood materials plans to invest $3.5 billion in a new battery materials plant outside of Reno, Nevada. The company has EV battery partnerships with automakers including volkswagen and Toyota.
  • GM is partnership with EVgo and Pilot to install 2,000 fast chargers in up to 500 Pilot and Flying J locations, and the first chargers will be operational early next year.
  • Federal Highway Administration officials and emergency responders cited in Transportation topics highlighted the need for increased training to effectively extinguish EV battery ignites.
  • The Wall Street Journal reports that warehouse developers know more requests for the installation of charging stations in distribution centerssignaling growing interest in electrification among logistics companies.
  • The New York Times featured a number of companies that are beginning to ramp up production to expand the testing process for next generation battery cells designed to improve charging speed and vehicle range.
  • The US Department of Energy intends to provide a $2.5 billion conditional loan to a joint venture between GM and LG Energy Solutions to help fund upcoming battery cell manufacturing facilities in Ohio, Tennessee and Michigan.
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