Bankruptcy
Arrival is facing severe financial distress, leading to its removal from the Nasdaq stock exchange, as it struggles to stay afloat and approaches dissolution.
Once valued at $13B, the EV startup failed to maintain Nasdaq's listing requirements due to delayed financial reporting and a lack of a remediation plan.
This downfall follows Arrival's unsuccessful attempts to revolutionize EV production with micro-factories.
After a series of layoffs, leadership changes, and failed funding strategies, the company's valuation has plummeted to about $20M. Despite securing a $50M lifeline recently, Arrival has yet to produce a fully functional vehicle for crucial clients like UPS or Uber.
Change In Management
Teresa Gutiérrez has been appointed as Tesla Mexico's new CEO. She brings over 20 years of experience from her roles at transnational companies, including McKinsey, Nestlé, Mattel, and Rappi.
DJ Novotney, with 25 years at Apple and significant contributions to products like the iPod, iPhone, Apple Watch, and Project Titan, is leaving to join Rivian as SVP of Vehicle Programs.
Closing
Henniges Automotive will close its Burlington, Ontario plant, which specializes in vehicle sealing systems, by the end of the year, affecting 220 employees. The company plans to consolidate operations into existing facilities to optimize its footprint, ensuring no disruption in supplying current or future programs.
Disaster
A fire at General Motors' Factory Zero in Detroit in December resulted in over $1M in damages, raising concerns about battery fire protocols $ at the automaker's premier EV plant.
Nearly 100 firefighters responded to the blaze, which was the eighth visit to the plant since summer. GM attributes the fire to a forklift accident, emphasizing ongoing efforts to improve internal protocols and employee safety.
The incident highlights the challenges the EV industry faces, including the need for better safety measures and emergency response protocols as production increases. The risks associated with battery technology make it imperative to address these issues to ensure production is scaled safely.
Earning Dip
Analysts project German EV sales will fall by 14% to 451k units in 2024, marking the first decline in eight years. The VDA lobby attributes this expected drop in consumer behavior to inflation, high car prices, and inadequate charging locations.
Additionally, the abrupt discontinuation of EV subsidies by Chancellor Olaf Scholz's coalition government in December, a year earlier than planned, is seen as a significant factor impacting demand.
This downturn in EV sales in Germany, previously a leading market for EV adoption in Europe, underscores the sensitivity of EV demand to policy changes, economic pressures, and infrastructure development.
Expanding
Tesla is reportedly expanding its battery production in Sparks, Nevada. The company will set up a new facility with idle equipment purchased from CATL that Tesla owns and runs.
The strategy differs from Ford's licensing of CATL technology for a new plant in Michigan, aiming to sidestep the criticisms and scrutiny associated with US/China tech partnerships. The new plant will produce 10GWh/y of lithium-iron-phosphate cells for Tesla's Megapack.
AESC is constructing a second battery factory near the Nissan plant in Sunderland, England. The facility is now expected to have a capacity of nearly 16GWh and will open in 2025.
Xpeng will pause production and spend $13.9M to upgrade its plant in Zhaoqing, Guangdong, China, to prepare for a new model and enhance its capacity. The upgrade, set to be completed by the end of February, involves updates to production lines, including stamping, welding, painting, and final assembly.
Industry Directions
The recent slowdown in EV sales growth, leading to cutbacks in some automakers' EV production plans, presents a mixed scenario for suppliers $.
"A supplier makes a substantial investment when they make a quote for new business. And when the volumes don't materialize like they're planning for, it causes real financial difficulty for the supplier."
- Daniel Rustmann, Butzel, Global Automotive Industry Group
According to Tom Manganello, co-chair of Warner Norcross + Judd's Automotive Industry Group, this situation offers an opportunity for suppliers heavily involved in EV and gasoline-powered vehicle components to potentially boost their more profitable gasoline vehicle business.
Additionally, suppliers lagging in EV parts production may find a chance to catch up through new investments.
However, the uncertainty in EV sales growth prompts suppliers to negotiate for "plus-minus" provisions in contracts to adjust prices based on actual production volumes despite facing resistance from automakers in implementing such clauses.
Mergers, Ventures, Acquisitions
Volvo has decided to halt its financial support for Polestar, transferring responsibility for the struggling luxury car brand to Geely, Volvo's largest shareholder.
With Volvo holding a significant 48% stake in Polestar, this transition aims to alleviate the financial strain on Volvo and allows Geely to extend full operational and financial backing to Polestar.
Amid challenging market conditions, Polestar plans to reduce its global workforce by approximately 450 jobs, representing 15% of its employees.
Opening
Redwood Materials has begun construction of a $3.5B battery materials facility in South Carolina, marking the company's second such venture. Originally expected to start in Q1 2023, this plant outside Charleston will focus on recycling, refining, and manufacturing anode and cathode components for EV batteries.
ThyssenKrupp Materials Mexico cut the ribbon on a $37M center in San Luis PotosÃ, Mexico, with a specialized cutting line for aluminum parts. The facility is starting operations this month and aims to support OEMs like BMW and GM.
Production Decrease
China's BAIC's Arcfox, Changan, Chery, and Seres are facing delivery delays for their flagship models due to production issues with Huawei's MDC 810 computing unit.
These premium EV models use the MDC 810 for autonomous technology, and a shortage of a component within the unit has pushed back vehicle delivery.
This setback occurs as Huawei aims to divest its Intelligent Automotive Solution business unit, with Changan planning to acquire a 40% stake.
Toyota has stopped global shipments of 10 vehicle models due to mishandled diesel engine testing by an affiliate using software that artificially smoothed horsepower values.
The pause affects popular models like the Hilux and Land Cruiser 300 despite the engines meeting output standards.
This incident, which involves around 43k diesel engines monthly, follows a series of recalls and production issues late last year.
Volvo has delayed deliveries of its EX30 due to a software issue $, marking the second Volvo EV to face such troubles after the EX90.
Despite initial statements suggesting minor delays, correspondence to dealers indicates multiple delays lasting about two weeks.
The software update, essential for delivery, requires dealership intervention rather than an over-the-air fix.
The EX30 is considered the cornerstone of Volvo's goal of significantly boosting global sales by 2025.
Raw Material Disruption
Human Rights Watch (HRW) has raised concerns that car manufacturers like Toyota, Volkswagen, Tesla, General Motors, and BYD may be incorporating aluminum produced by Uyghur forced labor into their supply chains.
The NGO's investigation suggests these companies might need to apply stringent human rights standards within China, particularly concerning joint ventures and operations.
HRW's report links aluminum smelters in Xinjiang with Chinese government-backed labor transfer programs, implicating them in potential human rights abuses.
Despite the challenges in conducting credible investigations due to high levels of repression in Xinjiang, HRW highlights the difficulty in tracing the origins of aluminum once it enters the global supply chain.