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Elm Analytics - Automotive Supply Chain Risk Digest #269 - April 1 - 7, 2022

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Automotive Supply Chain Risk Digest

April 8 · Issue #269 · View online

Weekly highlights of the events that impact supply chain risk within the automotive industry.


CLOSING
Toyota is closing its Sao Bernardo do Campo plant in Brazil, which opened in 1962. The automaker will shift production and its 550 workers to nearby facilities by the end of 2023.
EXPANDING
GM is expanding its Ingersoll and Oshawa plants in Canada to update technology and capabilities to build EVs. The company is also adding a third shift at Oshawa to compensate for lost production.
Nissan is expanding its Resende plant in Rio de Janeiro, Brazil, to launch new models.
INDUSTRY DIRECTIONS
Volkswagen aims to cut 60% of the ICE vehicles from its lineup by the end of the decade. The shift is part of their goal to sell fewer cars overall and concentrate on making more profitable premium vehicles.
MERGERS, VENTURES, ACQUISITIONS
Spain is planning to invest $12B into developing microchips and semiconductors. The country’s auto industry is the second largest in Europe.
Finnish contract manufacturer Valmet Automotive has been contracted by Sono Motors to build its Sion solar EV at its plant in Uusikaupunki. Valmet will provide the capacity to produce over 257k vehicles over the next seven years.
Vianode intends to build a new graphite production plant in Norway. The investment comes through a new partnership with Elkem, Hydro, and Altor. The plant will hire around 100 employees and produce graphite for over 20k EVs per year.
OPENING
Tesla officially launched its new Gigafactory Texas assembly plant in Austin. The colossal site is Tesla’s corporate headquarters and hosts large base frame die casting and in-house battery production.
Chinese EV battery maker CATL is opening a new battery plant in Thuringia, Germany, by 2022. The plant is in the final stage of construction and machine installation.
Toyoda Gosei is building a new airbag and steering wheel plant in Foshan, China. Production will start in 2023.
BASF plans to build a new cathode active material battery facility in Quebec, opening in 2025.
PRODUCTION DECREASE
German automakers lost an estimated 150k vehicles from their production plans in March due to supply shortages spurred by the war in Ukraine. LMC Automotive says that the German operations of VW, Mercedes-Benz, and BMW have been the most heavily impacted due to their dependence on Ukraine for wire harnesses, cables, and other components.
Most automakers saw sales decline in Q1 2022. Supply chain disruptions and semiconductor shortages continued to eat at production. Bright spots were higher sales of hybrid and electric models.
PRODUCTION INCREASE
In sharp contrast to other carmakers, Tesla’s first three months of 2022 saw a steep increase in sales. The company credits the flexibility of its software to run on substitute semiconductors. By avoiding supply chain issues, the company delivered 310k vehicles in Q1, though it didn’t reach analysts’ expectations.
RAW MATERIALS
Mining focuses on long-term contracts making surplus platinum and palladium impossible to find. Automakers are searching for alternative sources to Russia. South Africa needs five years to ramp up production to replace sanctioned sources.
RECALLS
Ford recalled over 345k vehicles in the US due to a faulty engine oil separator housing that could cause a fire. The automaker also recalled 391k cars due to a potentially flawed hydraulic braking system.
Tesla recalled over 127k Model 3’s in China due to potentially faulty semiconductor components. The recall covers cars made between January 2019 and January 2022.
REGULATION
The US Dept. of Transportation finalized its latest emissions standards late last week, requiring cars and light trucks to reach 49 mpg by 2026.
The UN’s IPCC released a major report on climate change. Reconfiguring transportation to run on clean energy is one of its essential steps. “Humanity now has a much better shot at avoiding some of the worst-case global warming scenarios once widely feared by scientists” thanks to accelerating technological advances.
SHUTDOWN
Covid lockdowns in Shanghai, China, have continued to halt production at automakers and suppliers.
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