Automotive Supply Chain Risk Digest #416
January 17 - 23, 2025, by Elm Analytics
Contents
BANKRUPTCY
Neta secures $819M for recovery
CHANGE IN MANAGEMENT
Toyota COO Jack Hollis retires
Novonix CEO Chris Burns resigns
DISASTER
Gas explosion kills two at Bosch
TSMC operational after 6.4M Taiwan earthquake
EXPANDING
Stellantis reopens US plant for pickups
Forge Battery receives $100M for growth
MERGERS, VENTURES, ACQUISITIONS
Honda-Nissan merger boosts EV efficiencies
Nissan cancels US EV crossover production
Nissan plans $985M Japan battery factory
CATL plans European EV battery plant
NEO Battery invests $69M in Ontario facility
Schneider Electric partners with Liminal Insights
Aptiv spins off distribution systems business
Hyundai Steel eyes US Southeast plant
Volkswagen and Rivian deepen partnership
OPENING
Skoda completes Vietnam assembly plant
Valeo opens advanced lighting plant in China
BYD plans $1B EV plant in Indonesia
Geely inaugurates mixed-use plant in Egypt
REGULATION
Trump suspends Inflation Reduction Act funds
RISK ANALYTICS
US supply chain remains unstable
Volkswagen faces challenges in 2025
Bankruptcy
China's financially troubled automaker, Neta, has secured $819M in external investments, reportedly involving state-owned assets and CATL, to stabilize operations and focus on doubling its overseas sales in 2025.
The funds were used to pay delayed salaries and resume production at its Tongxiang plant in China, which has an annual capacity of 200k units. Fang Yunzhou, the founder and chairman of Neta, succeeded Zhang Yong as CEO in December 2024.
Having sold just 237 units last month, Neta aims to expand its overseas sales to 60k vehicles, up from 30k last year, leveraging its dealership network across 40 countries, including Southeast Asia and Central/South America.
Change In Management
Toyota Motor North America announced the retirement of Jack Hollis, COO, and executive vice president, after more than 33 years of service. Mark Templin will step in as his successor effective January 27, 2025. Templin, who has been with Toyota since 1990 and has held various leadership roles, will oversee sales, marketing, and other key areas while continuing his responsibilities with Toyota Financial Services.
Chris Burns $, CEO of Novonix Ltd, will resign today after over four years. CFO Robert Long $ will step in as interim CEO while the company searches for a new leader focused on manufacturing expertise. The change comes as the company prepares for commercial-scale synthetic graphite production at its Chattanooga, Tennessee, facility, which is set to open this year and is supported by a $754.8M USDOE loan for a second plant.
Disaster
Two contractors died, and another was injured in a gas cylinder explosion involving silane gas at a Bosch site in Reutlingen, Germany, prompting investigations into the cause of the leak. Bosch's Reutlingen plant in Germany produces ASICs, MEMS sensors, and power semiconductors.
TSMC announced that all its semiconductor manufacturing sites are operational following a 6.4 magnitude earthquake in southern Taiwan, which caused minor damage and injuries.
Expanding
Stellantis NV will reopen its shuttered Belvidere, Illinois, plant to produce a new midsize pickup as part of a broader investment in US operations. The move reverses a decision by former CEO Carlos Tavares, who delayed these plans amid weakening EV demand. The reopening will return approximately 1,500 UAW workers to the facility.
Additionally, Stellantis will build the next-generation Dodge Durango SUV in Detroit, invest in an engine plant in Kokomo, Indiana, and strengthen operations in Toledo, Ohio. These plans follow commitments made during the 2023 UAW negotiations, with the Indiana engine investment being a new addition. The shifts come amid Stellantis' efforts to align with President Donald Trump's manufacturing and trade policies.
Forge Battery has secured $100M in funding from the USDOE to expand its lithium-ion battery gigafactory in Morrisville, North Carolina, to a production capacity of 3 GWh/year. The facility will produce 21700 battery cells, with supplemental cell production trials currently underway at its facility in Colorado.
Mergers, Ventures, Acquisitions
Honda and Nissan's merger is expected to significantly boost the production of hybrid and battery-electric vehicles, with a projected battery-cell demand reaching 1B cells by 2036.
Key developments include Honda's mature battery supply chain in North America, Nissan's cobalt-free battery technology slated for fiscal 2028, and joint ventures in China and Japan focusing on advanced battery production and recycling.
Streamlined supply chains and standardized platforms will benefit Tier-1 suppliers like Denso and Bosch but may challenge regional suppliers lacking the capacity to scale. Despite operational complexities, the merger aligns with the industry's structural changes and rising pressure from Chinese OEMs.
Nissan has decided not to produce its subcompact electric crossover, code-named PZ1L, at the Canton, Mississippi plant, opting to streamline production at its facility in Sunderland, England instead.
This move, influenced by dwindling US EV demand and financial challenges, is part of a broader strategy to cut global manufacturing capacity by 20%, as the subcompact EV market faces significant saturation and profitability issues.
However, Nissan plans to build an EV battery factory in Kitakyushu, Japan. The factory will focus on LFP batteries and is expected to start production by 2028. The $985M facility will have an annual capacity of 5 GWh.
CATL announced plans for a new EV battery plant in Europe, set to launch in 2025 as a joint venture with a local automaker. Details about the automaker haven't been disclosed.
This follows CATL's December 2024 announcement of a $4.3B joint venture with Stellantis for a plant in Spain that will produce 50 GWh of LFP batteries annually. CATL already operates in Germany and Hungary and is focusing on Europe amid uncertainties in the US and a potential slowdown in China's EV market.
NEO Battery Materials Ltd plans to invest $69M to build an 87k sq ft facility in Windsor, Ontario, to produce advanced silicon anode materials for lithium-ion batteries, potentially expanding to $120M over eight years.
Schneider Electric has partnered with Liminal Insights to integrate ultrasound-based metrology with Schneider's automation systems, focusing on inline quality inspection for various battery cell types. This collaboration aims to reduce scrap rates, enhance production efficiency, and improve overall cell quality in battery manufacturing.
Aptiv plans to spin off its electrical distribution systems business $ by March 2026 to improve profit margins and diversify from the volatile automotive industry. The separation will leave Aptiv with two units focused on advanced safety and engineered components, allowing for greater flexibility and strategic focus while maintaining a significant revenue base from non-automotive markets.
Hyundai Steel is considering building a steel plant in the US Southeast to supply car manufacturers with steel plates amid rising protectionist trade policies.
Volkswagen and Rivian are exploring an expansion of their joint venture, which was launched in November. Volkswagen CEO Oliver Blume indicated plans to share modules and bundle purchasing volumes to enhance the partnership.
The collaboration currently focuses on software support, with Rivian leveraging its software expertise to develop a new EV architecture that reduces costs and accelerates production. The ultra-luxury Porsche "K1" SUV and the electric Golf successor will be the first on this platform.
Opening
VW's Skoda is set to complete a $500M vehicle assembly plant in Quảng Ninh province, Vietnam, in Q1-2025. Built in partnership with local distributor Thành Công, the 3.8M sq ft facility will initially produce ICE models like the Slavia sedan and Kushaq SUV, with plans to add BEVs. The plant will have a production capacity of 120k vehicles annually, serving both the local market and exports to neighboring ASEAN countries.
Valeo has opened a new facility in Changshu, China, to produce advanced lighting systems for NEVs. Operated by Valeo New Energy Lighting, the plant will manufacture ambient lighting, headlamps, and other components, supplying automakers like Geely. Initially covering 86k sq ft, the facility is expected to expand to 172k sq ft by 2026. Valeo also has an EV drivetrain R&D and manufacturing site in Changshu.
BYD is set to open a new $1B EV manufacturing plant in Indonesia by the end of 2025, with an annual production capacity of 150k vehicles. The facility will be used for local sales and exports as part of Indonesia's plan to produce 600k EVs domestically by 2030. This plant follows the opening of BYD's first EV plant in Thailand in 2024 and facilities planned for Mexico, Brazil, Hungary, Turkey, and Pakistan.
BYD's investment is evidence of the growing shift of EV manufacturing to Southeast Asia and highlights the company's strategy to dominate both local and global markets while challenging legacy automakers.
Geely has inaugurated its first completely knocked down (CKD) plant in the Middle East and Africa, located in 6th of October City, Giza, Egypt. It is Egypt's first mixed production line for sedans and SUVs, with an annual production capacity of nearly 30k units and plans to expand localized model offerings.
Regulation
President Donald Trump issued an executive order suspending funding disbursements under the Inflation Reduction Act and the Bipartisan Infrastructure Law, pushing back on Biden's 2021 EV focus and withdrawing the US from the Paris Climate Accord.
While some program funding is paused, agency heads can still disburse funds with the Office of Management and Budget's consultation. Before the suspension, significant investments had been secured, including $9.6B for Ford's battery ventures with SK On.
This shift creates uncertainty for clean energy and EV manufacturing projects that depend on federal funding, potentially disrupting supply chains and delaying infrastructure development.
Risk Analytics
2024 trends highlight ongoing US supply chain instability, increasing pressure on manufacturers and logistics providers to adapt to fluctuating costs, volumes, and demand:
US Economic Performance:
Real GDP growth improved, with projected annual growth near 3%, but fell short of pre-2005 levels.
US manufacturing showed a prolonged slump, with the Purchasing Managers Index (PMI) below 50 for 11 of 12 months.
Energy and Freight Costs:
Oil and diesel prices were stable, starting the year at $71.65 per barrel and $3.87 per gallon, respectively, with modest fluctuations throughout.
Freight volumes were mixed. ATA's Freight Tonnage Index fell compared to 2023, while truckload contract rates have dropped year over year since mid-2022.
Modal and Regional Trends:
US rail intermodal traffic rose 9.3%, while carload volumes declined by 2.9%.
Ocean shipping saw rates double mid-year due to geopolitical disruptions, with China-to-US East Coast rates reaching $10k.
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