Elm Analytics - Automotive Supply Chain Risk Digest #270 - April 8 - 14, 2022



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Automotive Supply Chain Risk Digest

April 15 · Issue #270 · View online

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

Workers locked in VW’s halted Shanghai plant get scheduled meals, rest times, walks around the factory, and movie nights. The plant was initially to run with staff living onsite during the city’s expansive COVID-19 lockdowns.
Similarly, CATL has begun a closed-loop system for workers at its main battery facility in Ningde, China, due to increasing cases in the city.
While there are still issues to overcome, Nissan seems confident that they will be able to solve the problems with next-gen solid-state EV batteries by 2028.
American Axle is acquiring Tekfor Group, a metal forming company. Tekfor is based in Hausach, Germany, and has eight plants worldwide.
Bosch has purchased autonomous driving startup Five.ai. The company didn’t disclose the purchase price.
GM and Honda are deepening a long-standing partnership to collaborate on EVs and cut costs. Their goal is to produce EVs that cost less than $30k.
Magna opened a new exterior mirror factory in Duncan, South Carolina. The 170k sq ft plant will produce 1.6M mirrors per year for nearby BMW, Mercedes, and Volvo.
Hyundai will build a new EV assembly plant in the US as a part of their $7.4B EV investment plan. They hope to choose a location for the plant this year.
Japanese EV battery maker Envision AESC will build a $2B battery factory in Bowling Green, Kentucky. The plant will employ around 2k people.
In an interview with Bloomberg, Toyota VP Bob Carter said parts shortages would keep automakers 1m vehicles short of the 16.8m vehicle market. He doesn’t expect inventories to begin to normalize until Q3 2023. “So this tight car situation we’re seeing, both new and used, is probably going to be with us for another 12 to 15 months.”
BMW and VW made similar predictions this week.
  • “We are still in the height of the chip shortage,” BMW’s CEO Oliver Zipse said. “I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023.”
  • VW’s finance chief Amo Antlitz believes “supplies of semiconductors will not normalize until 2024, by which time there will still be a structural undersupply…”
Analysts expect South Korean battery manufacturers will increase prices by 30%-40% in the next year due to rising material costs.
Last week, Texas’ Department of Public Safety stepped up vehicle screenings at the border in an attempt to curb illegal immigration. Governor Abbott ordered “enhanced safety inspections” as he was upset with federal policies. Some truckers waited for over 30h in traffic due to long wait times and traffic jams caused by the changes.
In protest, Mexican truckers blocked border crossings near El Paso and Pharr, Texas. The White House stated the delays “are causing significant disruptions to the food and automobile supply chains…” Texas’ screenings are in addition to those conducted by US Customs and Border Patrol.
Analysts believe Asian automakers will backfill Russia’s automotive market due to western sanctions.
3M has halted production at its Zwijndrecht, Belgium, plant that produces semiconductor-grade PFAS. The coolant is utilized during etching while making chips, and 3M’s plant is the industry’s primary provider.
The company is remediating PFOS contamination in soil and groundwater, first discovered in 2018 after production stopped in 2002.
Mitsubishi shuttered its Kaluga, Russia, plant that it co-owns with Stellantis, citing logistical difficulties.
Bosch has idled production at plants in Shanghai and Jilin, China, due to COVID-19 lockdowns. Additionally, its plants in Shanghai and Taicang operate on a “closed-loop” system where workers stay onsite or are ferried to and from secure accommodations.
Toyota South Africa suspended production at its Prospecton plant due to flooding in the region. The automaker also confirmed that some of its suppliers had also shut down due to the flooding.
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