Automotive Supply Chain Risk Digest # 389
Automotive Supply Chain Risk Digest # 389
July 12 - 18, 2024, by Elm Analytics
Contents
Mercedes-Benz appoints new VP of Sales
BCS to close Winona, MN plant
CATL raising $1.5B for expansion
U.S. EV registrations up 9.6%
Tesla Cybertruck outsells Ford
Minimal changes in auto footprint
MERGERS, VENTURES, ACQUISITIONS
Serbia offers lithium to EU automakers
VinFast building $200M Indonesia plant
Ford considers $400M Kentucky plant
GM's 2025 EV goal uncertain
ProLogium ramps up French factory
Kentucky allows self-driving vehicles
US to limit Chinese vehicle software
Crash avoidance vs. partial automation
Change In Management
Mercedes-Benz has appointed Bart Herring as VP of sales and product at Mercedes-Benz USA, effective August 1. Herring, a 25-year company veteran, will focus on driving new- and used-vehicle sales and leading the product team, including EVs, PHEVs, and ICE vehicles. This move $ aims to recover market share lost to BMW and Lexus.
Closing
BCS Access Business System U.S. will permanently close its auto parts manufacturing plant in Winona, Minnesota. The layoffs will affect 117 employees and occur in phases starting July 26, affecting both hourly and salaried workers. The plant produces components such as suspension parts and steering systems.
Expanding
Chinese EV battery maker CATL is looking to raise $1.5 billion to enhance its global supply chain, focusing on expanding operations in Europe and driving innovation in EV and energy storage technologies. The fund, managed by Hong Kong-based Lochpine Capital, seeks investment from sovereign wealth funds and key customers, including Mercedes-Benz Group AG. Despite a cash reserve of $40 billion, CATL faces challenges due to China’s strict overseas investment rules.
Industry Directions
New analysis from the Federal Reserve Bank of Chicago forecasts minimal changes $ in North America's auto manufacturing footprint through 2029, despite a $250B investment in the EV and battery supply chain since 2021. Existing factories will continue to support both EV and ICE production to meet varying demand, maintaining a stable geographic distribution of light-vehicle assembly plants with only minor adjustments as the industry shifts towards electrification.
Despite facing issues like safety concerns and performance failures, Tesla's Cybertruck has become the best-selling electric truck in America, surpassing Ford's F-150 Lightning. In May, the Cybertruck registered 3,907 units, compared to the F-150's 2,353 units. This marks a significant milestone for Tesla, with the Cybertruck starting at just over $100,000 and being recognized as the best-selling vehicle over $100,000 last week.
In May, new U.S. EV registrations increased $ by 9.6%, totaling 104,916 vehicles, driven by generous sales promotions and lease deals, according to S&P Global Mobility data. EVs captured 7.5% of the light-vehicle market, up from 6.8% the previous year, despite the broader market falling by 0.7%. Tesla's registrations fell 15% to 48,587, reducing its market share from 60% to 46%.
Mergers, Ventures, Acquisitions
Serbia plans to offer Mercedes-Benz, Volkswagen, and Stellantis the opportunity to purchase lithium for car batteries, prioritizing European automakers over Chinese ones. President Aleksandar Vucic emphasized strengthening ties with the EU, stating that Serbia aims to produce 58,000 tonnes of lithium annually, sufficient for 1.1M EVs or about 17% of the European market.
The deals will require most of the lithium processing and battery production to occur within Serbia. This announcement follows Serbia's reinstatement of a license for Rio Tinto to develop Europe's largest lithium mine.
Opening
Vietnamese EV maker VinFast is building a new $200M assembly plant in Subang, Indonesia. The plant is set to open in Q4 2025 with plans to produce 50k vehicles annually. VinFast Indonesia CEO Temmy Wiradjaja emphasized the strategic importance of this expansion in establishing VinFast as a major player in Southeast Asia's EV market.
Ford is considering Shelbyville, Kentucky, for a new $400 million high-tech manufacturing facility to produce EV parts, potentially creating 260 jobs. This potential investment follows the Kentucky Economic Development Finance Authority’s preliminary approval of an $8 million tax incentive.
Production Decrease
General Motors' target of producing 1 million EVs in North America by the end of 2025 is uncertain following recent comments from CEO Mary Barra. Barra acknowledged that market demand for EVs has not developed as expected, leading to a potential shortfall in reaching the production capacity goal.
While GM had maintained this target amidst other revisions, a spokesman clarified that the target pertained to production capacity, not actual production, and stated that the company would no longer reiterate the 2025 capacity plans, emphasizing flexibility to meet demand.
Production Increase
ProLogium Technology Co., a Taiwanese battery maker backed by Mercedes-Benz, plans to gradually scale up its $5.7B factory in Dunkirk, France, responding to a slowdown in EV sales and aiming for efficiency. CEO Vincent Yang stated that the plant's production, starting in 2027, will initially be 2-4 GWh, increasing to 8-16 GWh by 2030, with full capacity of 48 GWh expected by 2032.
Regulation
The U.S. Department of Commerce will propose new regulations in August to restrict certain vehicle software made in China and other adversarial countries, focusing on key driver components. Alan Estevez, export controls chief, emphasized the security threat posed by the extensive data collected by modern vehicles.
Commerce Secretary Gina Raimondo had previously indicated that these measures could lead to severe restrictions or bans on Chinese-connected vehicles following an investigation into national security risks. The proposed rules are part of broader efforts to enhance data security in connected vehicles.
Kentucky has joined 24 other states this week in permitting self-driving vehicles on public roads. The bill, which went into effect Monday, establishes a framework for autonomous vehicles, requiring a human backup driver for heavy trucks over 62,000 pounds until July 2026, and mandates a $1 million insurance policy for AV owners. Gov. Andy Beshear, who vetoed the bill citing safety concerns and the need for extensive testing, was overridden by the legislature.
Risk Analytics
A new study from IIHS suggests that crash avoidance technology, such as automatic emergency braking and lane departure prevention, significantly reduces crash rates, while partial-automation features, like adaptive cruise control, do not have a comparable safety benefit.
The study, focusing on BMW and Nissan models, found notable reductions in property damage claims for vehicles equipped with crash avoidance tech. However, the study highlights limitations, including the default engagement of crash avoidance systems versus the discretionary use of partial automation features
