Automotive Supply Chain Risk Digest #420
February 14 - 20, 2025, by Elm Analytics
Contents
CLOSING
BorgWarner closing Michigan EV battery plants
Aspen Aerogels cancels Georgia factory project
GM shutting down China plant amid restructuring
HUMAN CAPITAL
Continental cutting 3k R&D jobs by 2026
MERGERS, VENTURES, ACQUISITIONS
CATL, VW China partnering on battery R&D
Toyota shifts $1.5B battery order to LG
ZF considering electric drivetrain spinoff
Stellantis shifting focus to hybrid transmissions
BYD secures lithium mining rights in Brazil
OPENING
Imperial Auto opens first Latin America plant
GAC begins construction on digital factory
TMWB Foam opens plant in Pune, India
PRODUCTION DECREASE
Stellantis delays Brampton retooling to 2026
Ford pushes next-gen F-150 to 2028
REGULATION
Trump tariffs threaten auto industry
Auto sector braces for Trump trade policies
Trump’s tariffs could slow European economy
Closing
BorgWarner is closing two plants in Hazel Park and Warren and reducing its EV battery operations due to lower demand. As part of a cost-saving strategy, production will be consolidated at a facility in Seneca, South Carolina. This move highlights broader industry challenges in the EV supply chain.
Aspen Aerogels has canceled its $325M manufacturing facility in Bulloch County, Georgia, due to slower-than-expected demand for electric vehicles and a shift in strategy. Instead, the company plans to expand production at its existing East Providence, Rhode Island plant.
General Motors is closing its plant in Shenyang, China, this month as part of a restructuring effort due to increasing competition from domestic manufacturers. The facility currently produces Buick GL8 minivans and Chevrolet Tracker SUVs for the local market. GM's CEO, Mary Barra, indicated that the company will shift its focus in China towards the Cadillac and Buick brands and its premium import business.
Human Capital
Continental will cut an additional 3k jobs in its automotive research and development division by 2026, adding to the 7k layoffs already announced as part of its restructuring plan to reduce R&D costs. Most new job losses will occur in Germany, particularly at the Babenhausen and Frankfurt sites, due to challenges in Europe's auto sector, including weak demand and increased competition from Chinese automakers.
Mergers, Ventures, Acquisitions
CATL and Volkswagen Group China have signed a memorandum to collaborate on lithium battery R&D and develop new materials and NEV components, focusing on advanced battery technologies and improved supply chain resilience.
After General Motors exited the project, Toyota agreed to shift a $1.5B battery order $ to LG Energy Solution's Lansing, Michigan plant. GM's December decision to sell its $1B stake left LG seeking new customers, leading Toyota to transfer an existing order from another LG facility once LG fully acquires the Lansing site this spring.
The deal helps stabilize operations at the plant, which was initially part of GM's $35B EV investment strategy. Toyota's investment helps sustain US battery production amid shifting automaker strategies and policy uncertainty, securing critical supply chain stability.
German automotive supplier ZF is considering spinning off its electric drive train division due to challenges in profitability amid delayed e-mobility ramp-up and the associated high costs.
Stellantis will start producing electrified dual-clutch transmissions (eDCTs) for hybrid vehicles at its Termoli, Italy plant in 2026, with a target of 300k units per year. The site was initially designated for an EV battery gigafactory under the Stellantis-led JV ACC, but those plans remain uncertain as ACC evaluates investments in Italy and Germany.
While ACC's gigafactory in France is operational, its projects in Italy and Germany were paused last year due to shifting battery strategies and slowing EV demand. Stellantis is also expanding eDCT production capacity at its Metz, France, and Sint Truiden, Belgium facilities.
The shift toward hybrid component production underscores automakers' increasing focus on hybrids amid cooling EV demand, while uncertainty remains over Stellantis' battery investment strategy in Europe.
BYD has acquired lithium mining rights in Brazil, marking its first significant mining venture outside China. Documents reveal that BYD's subsidiary, Exploração Mineral do Brasil, secured rights to two sites in late 2023, including an 8.5 sq km area in Coronel Murta, within "Brazil's Lithium Valley." The move aligns with BYD's strategy to secure critical EV minerals in the Western Hemisphere as it expands its global footprint.
While BYD has stakes in several Chinese mining companies, this development strengthens its supply chain for EV battery materials near its upcoming Brazilian manufacturing plant. Mining operations, however, could take 8 to 15 years to become fully operational.
Opening
India-based Imperial Auto Fluid Transmission Products has inaugurated its first Latin American plant in Ramos Arizpe, Coahuila, Mexico, with a $1.9M investment. The facility will manufacture fluid transmission components and high-pressure tubing.
GAC Group has commenced construction on its GAOG Digital New Factory in Guangzhou, China. The facility will include an integrated die-casting facility capable of producing battery housings, subframes, and other body components.
TMWB Foam Private Limited, a joint venture between Woodbridge and TM Automotive Seating Systems, has opened a new plant in Pune, Maharashtra, India. The 45k sq ft facility produces seating systems, molded foam, interior components, and vacuum-formed parts.
Production Decrease
Stellantis has delayed retooling at its Brampton, Ontario plant, pushing back the production of the next-generation Jeep Compass from 2025 to Q1 2026. The plant, which was initially closed for retooling in 2024, was set to build the small SUV on a flexible architecture that supported EV and hybrid powertrains.
The delay comes amid uncertainty driven by the Trump administration's proposed 25% tariffs on Canadian and Mexican auto imports and shifting EV policies. Unifor, representing Stellantis' Canadian workforce, called the decision "a matter of grave concern." While Stellantis cited an ongoing reassessment of its North American product strategy, analysts suggest the pause reflects a broader shift in balancing gas and electrified vehicle production.
The automaker has been making strategic changes following a turbulent 2024, including advancing the launch of a new hybrid Ram pickup over its all-electric counterpart. The delay underscores the growing uncertainty in North America's auto industry as automakers navigate shifting trade policies and evolving powertrain strategies.
Ford has delayed production of the next-generation F-150 gasoline and hybrid trucks by one year, extending the current model's production until April 2028. The decision is attributed mainly to the prevailing economic uncertainty and potential regulatory shifts under the Trump administration, which could increase production costs.
Despite Ford's lower exposure to imported parts compared to some competitors, the delay allows the company to reassess its investment areas. Ford's delay reflects growing industry caution as automakers navigate potential tariffs and economic uncertainty, which affect supply chains and pricing strategies.
Regulation
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