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Contents
BANKRUPTCY
German plastics supplier New Albea insolvent
Northvolt secures capital amid crisis
CLOSING
Stellantis closing Arizona Proving Grounds
EXPANDING
Benteler completes Spartanburg expansion
Stellantis expands Saltillo truck plant
HUMAN CAPITAL
GM delays EV motor production, layoffs
Stellantis lays off 1.1k Michigan workers
INDUSTRY DIRECTIONS
IMF highlights EV transition impacts
LITIGATION
Hesai Group challenges US military ties claim
MERGERS, VENTURES, ACQUISITIONS
ZF pulls investment from Wolfspeed chip plant
OPENING
LG opens telematics plant in Mexico
Xiaomi accelerates Beijing EV plant phase two
Mexstamp invests in new Aguascalientes plant
Mercedes opens battery recycling plant
RAW MATERIAL COSTS
Major lithium reserve discovered in Arkansas
REGULATION
IMMEX program changes could disrupt supply chains
RISK ANALYTICS
Mixed regional trends in global vehicle production forecast
Bankruptcy
New Albea, a German plastics technology supplier, filed for insolvency in Seelbach, Baden-Württemberg, with over 200 jobs at risk. The company, which produces automotive heating films, cited declining sales as the cause of its financial distress.
Northvolt, Europe's struggling battery manufacturer, has secured a small amount of capital to meet immediate salary obligations while pursuing a more extensive support package of over $300M to ensure its liquidity for the upcoming year. The company has faced significant challenges, including the cancellation of a major order from BMW and subsequent job cuts, as it navigates its financial crisis.
Closing
Stellantis will close its 4k acre Arizona Proving Grounds by the end of 2024 as part of cost-cutting measures, with operations shifting to a Toyota-owned facility in Arizona.
Expanding
Benteler has completed a $47.9M expansion of its Spartanburg County facility in Duncan, South Carolina, enhancing its manufacturing and assembly capabilities. The investment includes facility upgrades and new machinery to support Benteler's production of automotive components like chassis, structures, and exhaust systems.
Stellantis is expanding its truck plant in Saltillo, Mexico, to act as a "relief valve" for its US truck plant, which is expected to reach capacity, according to Ram brand CEO Christine Feuell.
The decision is not driven by cost-cutting following Stellantis' agreement with the UAW, Feuell clarified, citing Saltillo's existing capability to manage production complexity.
While the future production of Ram 1500 trucks at the Mexico facility remains uncertain, the expansion has raised questions as UAW tensions with Stellantis grow amid claims of unfulfilled contract promises.
Human Capital
General Motors has postponed the production of electric motors $ at its St. Catharines Propulsion Plant in Ontario to early 2027, a delay of about 16 months from the original timeline.
The delay follows the end of two key production programs, leading to layoffs of nearly half the plant's workforce, with only 600 workers remaining from the original 1.1k.
Unifor, the union representing the workers, has opened a labor action center to help 1k affected employees find new jobs. GM attributed the delay to aligning production capacity with EV demand, but Unifor is pushing for faster retooling or alternative production options.
Stellantis has laid off approximately 1.1k workers $ at its Warren Truck Assembly Plant in Michigan following the end of production of the Ram 1500 Classic, a lower-cost alternative to newer models.
The layoffs were expected after the company warned of job cuts in August, though the final number is less than half the anticipated 2,450. Stellantis will continue building the Jeep Wagoneer and Grand Wagoneer at the plant.
Industry Directions
The IMF's latest World Economic Outlook highlights the significant global impact of the transition to EVs on investment, production, trade, and employment. As EV adoption accelerates to meet climate goals, the automotive industry faces a fundamental transformation.
The shift is expected to impact Europe's GDP particularly, with a projected decline of 0.3% in the medium term due to lower employment in the automotive sector.
China's dominance in EV production poses challenges for US and European manufacturers, as both regions have imposed tariffs to counter perceived unfair Chinese subsidies.
Litigation
Hesai Group, a Chinese lidar manufacturer, announced it will continue its legal battle against the US after the Pentagon reinstated the company on its 1260Hlist for alleged ties to Beijing's military.
Originally added to the list in January 2024, Hesai sued the US government in May, asserting that its products are solely for automotive and civilian use and not connected to the Chinese military.
Mergers, Ventures, Acquisitions
ZF is planning to withdraw its $185M investment in a $3B microchip manufacturing plant in Saarland, Germany, due to Wolfspeed's decision to halt the project.
Wolfspeed, the chipmaker, cited lower demand for semiconductors and uncertainty about entering the European market as reasons for pausing the initiative.
ZF has stated that it is not responsible for the delays, emphasizing that Wolfspeed is in charge of the project.
This situation reflects a broader issue in the European semiconductor industry, which is facing difficulties in expanding and competing globally, especially amid challenges in the EV market.
Opening
LG Electronics has opened a new plant in the Santa MarÃa Industrial Park in Ramos Arizpe, Coahuila, Mexico, with an investment exceeding $60.5 million. The facility will add 400 jobs and focus on producing telematics systems and in-vehicle entertainment devices.
Xiaomi is accelerating the construction of the second phase of its EV plant in Beijing, with workers operating double shifts to complete the main structure by the end of 2024. The complete construction is scheduled for completion by June 15, 2025.
This phase will complement the first plant, which started double-shift production earlier this year. Xiaomi's first EV model, the SU7, launched in March 2024, and the company aims to ramp up production to deliver 120k units by the end of 2024. The second phase is part of Xiaomi's plan to produce 300k vehicles annually.
Mexstamp announced a $3.5M investment to construct its second plant in the Chichimeco Industrial Park, Aguascalientes, Mexico. The new facility, covering over 43k sq ft, will boost the company's production capacity by 40%, focusing on stamping and molding auto parts.
Mercedes-Benz has inaugurated a battery recycling plant in Kuppenheim, Germany, using an innovative mechanical-hydrometallurgical process that recovers over 96% of valuable battery materials like lithium, nickel, and cobalt.
This in-house facility is the first in Europe and aims to close the battery recycling loop for future Mercedes EVs. The plant processes all stages, from shredding battery modules to extracting raw materials, operating with low energy consumption and net carbon neutrality. With an annual capacity of 2.5k tonnes, Mercedes plans to expand the facility in the future.
Raw Material Costs
Federal and state researchers have discovered a significant lithium reserve in the Smackover Formation in Arkansas, estimated to hold between 5M and 19M tons.
This discovery could meet the global demand for EV batteries. Exxon Mobil and other companies are developing direct lithium extraction technologies to tap these reserves, though the method is currently more expensive than conventional processes.
Projects like those in Arkansas and California's Salton Sea are part of a broader effort to build a resilient lithium supply chain. The discovery of domestic lithium reserves could significantly reduce US dependence on foreign lithium, strengthening its supply chain resilience for EV battery production.
Regulation
The IMMEX program is a Mexican government initiative that allows companies to temporarily import materials and goods without paying import taxes, provided the finished products are exported.
It is designed to promote export-oriented manufacturing, especially in industries like automotive, electronics, and textiles. The program offers tax benefits but requires companies to comply with specific regulations, such as tracking inventory for foreign trade purposes.
Effective November 15, 2024, recent regulatory changes require IMMEX companies to implement automated inventory control systems that meet specific data reporting standards. This includes providing real-time data to Mexican customs within 48 hours of receiving information.
Companies that fail to comply with these new rules risk losing their IMMEX certification, which could result in additional taxes and operational disruptions.
In the automotive industry, these changes could lead to increased costs, delays in the import of parts, and supply chain disruptions if certification is suspended.
Automotive companies and their suppliers must act quickly to upgrade their systems and avoid interruptions in production and exports.
Risk Analytics
The October 2024 global light vehicle production forecast from S&P Global shows mixed trends across regions, reflecting differing economic and market conditions:
Europe: Production is revised down by 107k units for 2024 and 292k units for 2025 due to lower demand in Central and Western Europe and new EU emissions mandates. However, Eastern Europe sees a slight increase of 35k units in 2025, driven by Russian demand.
China: Production will increase by 73k units in 2024, thanks to solid sales of EVs and government stimulus. However, the 2025 forecast is reduced by 42k units.
Japan/Korea: Japan's production outlook improves by 22k units in 2025 and 128k units in 2026, primarily due to Nissan shifting production to Japan. South Korea's forecast drops by 9k units for 2024 and 16k for 2025, reflecting weaker European sales.
North America: Production is lowered by 12k units for 2024 and 113k units for 2025 due to vehicle program delays and inventory management by major automakers.
South America: The forecast improves by 36k units for 2024 and 35k units for 2025, driven by more robust sales in Brazil and Argentina.
South Asia: Production increases by 25k units for 2024, but the 2025 outlook drops by 73k due to economic challenges and high inventories, especially in India.
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