Bankruptcy
Fisker is reportedly exploring the possibility of bankruptcy $ and has engaged FTI Consulting and the law firm Davis Polk for assistance.
In February, the company voiced doubts concerning its ongoing viability, highlighted by a Q4-2023 net loss of $463 million and a decision to reduce its workforce by 15%.
The company, founded by Henrik Fisker, a former designer for BMW and Aston Martin, previously faced a similar situation with Fisker Automotive, which declared bankruptcy in 2013.
Charge Enterprises, a key EV charging station partner for Stellantis, GM, Volvo, and Ford, has filed for bankruptcy amid standardization on Tesla's NACS connector and charging network. The company plans to restructure and transfer operations to senior lender Arena Investors.
With a presence in over 2.6k US dealerships, Charge Enterprises faced financial difficulties compounded by issues with investment adviser Korr Acquisitions Group and its former chairman, Kenneth Orr, leading to unexpected cash flow problems.
This bankruptcy is part of a broader trend of financial instability in the EV infrastructure and manufacturing sector.
Change In Management
GM announced changes in its leadership team $. Gerald Johnson, the executive VP of global manufacturing and sustainability, is retiring, and Mike Abbott, the executive VP of software and services, is stepping down due to health reasons. Jens Peter Clausen, who brings experience from Tesla, Lego, Google, and biotech company Zymergen, will succeed Johnson.
Continental's CFO, Katja Garcia Vila, will not extend her contract and plans to leave the auto supplier she joined nearly three decades ago. The company is going through a significant revamp to improve returns at its struggling auto unit, including more than 7k job cuts and site closures.
Closing
Goodyear will close its Shah Alam tire plant in Malaysia by the end of 2024 as part of a cost-cutting strategy.
(It seems to be a busy week for announcing changes to tire plants. More below…)
Expanding
Bridgestone EMEA will invest $225M in its tire plant in Burgos, Spain, to increase output and emissions.
Human Capital
Germany's Webasto plans to cut a double-digit percentage of jobs company-wide (currently 12k employees) due to a lackluster performance in 2023.
This strategy follows actions such as a global hiring freeze and the sale of its charging solutions business's majority stake. Webasto's move reflects the broader strains the automotive supply sector faces, especially in Germany.
Toyota and Nissan have offered their most significant domestic pay raises in decades, responding to Japan's Prime Minister Fumio Kishida's call for wages to outpace inflation. This move could be a turning point in Japan's fight against deflation and help attract and retain talent in a shrinking labor force.
Ford will increase its EV software development capability by adding 3k employees over the next three years to its tech hub in Chennai, India. Currently, the company has 12k on-site workers working on Ford's global EV platforms.
Industry Directions
NYTimes: BMW Is a Surprise Winner in Electric Vehicles
Mergers, Ventures, Acquisitions
Volkswagen Group China will increase its investment in JAC Motors, its only majority-controlled joint venture, to strengthen its foothold in the world's largest automotive market.
This investment is part of VW’s strategy to catch up in the Chinese market by focusing on local collaborations and accelerating its transition towards EVs.
The company also plans to develop a new platform for entry-level EVs in China. In addition, it will collaborate with Xpeng, leveraging local capabilities to reduce costs and boost its EV lineup.
Nissan is reportedly contemplating partnering with Honda on EVs. The venture could include a shared platform, a common powertrain, and joint procurement/development.
If these preliminary talks pan out, it would signify a strategic move to address the competitive pressures from Chinese EV manufacturers. Japanese automakers have recently accelerated their transition to EVs to enhance competitiveness.
Opening
Honda began automobile production at its new plant in Tema, Ghana. The factory is the company's second production plant in Africa, following one in Nigeria. The plant produces the HR-V with an initial annual production capacity of 500 vehicles.
Japan's UBE Corporation is investing $500M to build the first US factory in New Orleans, Louisiana, to manufacture dimethyl and ethyl methyl carbonate. The company aims to reduce dependency on Chinese imports of these chemical components and expects to commence operations in late 2026.
And our last tire plant update: China's Sailun will build a $250M tire manufacturing facility in Demak City, Indonesia, to increase its capacity.
Production Decrease
Nissan and Honda are reportedly considering dropping production capacities in China. The companies are facing intense competition from BYD and other EV manufacturers.
News outlets believe Nissan is considering a 30% decrease (500k vehicles), while Honda is exploring a 20% cut (1.2M vehicles).
Despite these reports, spokespeople for Nissan and Honda denied or declined to confirm the specific figures. Nissan and Honda's sales in China dropped by 16% and 10%, respectively, last year.
Volkswagen has decided not to begin overflow production of the electric ID.3 model at its main Wolfsburg, Germany, factory. Due to lower-than-expected demand for EVs, it will continue manufacturing the vehicle exclusively in Saxony.
The decision will not affect Dresden's small-scale ID.3 assembly, and the Wolfsburg plant will now focus on combustion and hybrid vehicles like the Golf and Tiguan.
Volkswagen remains committed to transitioning the Wolfsburg plant to electric vehicle production. It plans to launch an electric SUV in 2026 and a new electric Golf in the future.
Production Increase
Tesla's Berlin Gigafactory in Gruenheide, Germany, was reconnected to the power grid on Monday.
A suspected arson attack on a power tower shut the plant down on March 5. With 12.5k workers and a 1k vehicle/day capacity, it is still being determined how long it will take to resume production fully.
After nearly three months, the Chevy Blazer EV stop-sale has ended, bringing significantly reduced prices and full eligibility for a US $7.5k federal tax credit.
The stop-sale, initiated by General Motors in December due to software quality issues, affected a limited number of vehicles and was not safety-related.
China's Xiaomi will launch its first electric vehicle $, the series SU7, on March 28. While it is primarily known as a smartphone manufacturer, it will face tough competition from Tesla and BYD in China's EV market.
Xiaomi plans to leverage its electronics business's technological expertise and customer base to make a significant impact.
Xiaomi's move highlights the growing intersection between technology and automotive industries, as tech companies strive to diversify while meeting changing consumer demands in mobility.
Regulation
Ford has agreed to a $365M settlement with the US Justice Department to resolve allegations that it misclassified imported Transit Connect vans to evade higher tariffs.
The case, stemming from actions between 2009 and 2013, involved Ford importing the vans from Turkey with temporary modifications to classify them as passenger vehicles, thereby subjecting them to a lower 2.5% import tax instead of the 25% duty for cargo vehicles.
Risk Analytics
The steel industry is facing a looming shortage of carbon steel scrap metal.
While we currently have a 9M metric ton surplus, a Boston Consulting Group analysis predicts that there will be a 15M metric ton deficit by 2030.
Steel scrap is increasingly used in steel production to reduce carbon emissions and electric arc furnace-based steelmaking.
Without investments in recycling infrastructure in developing countries, the auto industry will be affected by increased costs and supply chain disruptions.