Automotive Supply Chain Risk Digest #430
April 25 - May 1, 2025, by Elm Analytics
Contents
BANKRUPTCY
Li-Cycle seeks buyers amid insolvency
CHANGE IN MANAGEMENT
Continental names new CFO
CLOSING
Nissan exits Wuhan plant operations
DISASTER
Power outage halts Iberian factories
EXPANDING
Mercedes expands US production line
LITIGATION
Canceled EV sparks supplier lawsuit
MERGERS, VENTURES, ACQUISITIONS
Waymo, Toyota target personal autonomy
Toyota eyes partial buyout investment
Uber partners with May Mobility
OPENING
Aptiv grows China EV supply footprint
BYD builds Cambodia NEV plant
REGULATION
Trump order eases tariff burdens
USMCA parts exempt from 25% tariffs
New offsets, caps on import duties
Higher vehicle costs remain
RISK ANALYTICS
Suppliers diversify to reduce exposure
SHUTDOWN
Stellantis Windsor plant temporarily halts
BMW delays German EV production
Bankruptcy
Li-Cycle Holdings Corp, a Canadian battery recycling firm with ties to General Motors, is seeking buyers after its acquisition by Glencore fell through. Facing urgent financing needs and potential insolvency, the situation highlights the fragility of EV recycling infrastructure essential for North America's electrification goals.
Change In Management
Continental AG will appoint Roland Welzbacher to its Executive Board on August 1, transitioning to CFO on October 1 after Olaf Schick's departure due to the Automotive group spin-off. Welzbacher will also oversee finances for the Tires division as the company refocuses its business structure.
Closing
Nissan will halt production at its underperforming Wuhan plant by March 31, 2026, due to low output and pressure from Chinese EV competitors, marking its second closure in China after the Changzhou plant.
This decision comes as Nissan anticipates a record loss of up to $5.3B and a 35.6% decline in production in the region, leading to a shift towards exporting 100K China-made vehicles annually despite potential tariff challenges.
Disaster
A widespread power outage across Spain and Portugal on April 28 disrupted operations at five automotive plants operated by Renault and Stellantis.
Renault entirely halted production at its Valladolid and Palencia factories, with both sites now resuming operations progressively under force majeure conditions.
Stellantis reported only minor disruptions at its Vigo, Zaragoza, and Madrid plants, with all three returning to near-normal output by the morning of April 29.
Localized grid instability can differentially affect OEM operations, potentially delaying vehicle output and disrupting downstream supply commitments in key European manufacturing corridors.
Expanding
Mercedes-Benz is investing in a new vehicle production line at its Tuscaloosa, Alabama, facility, set to begin by 2027, as part of its strategy to localize manufacturing in response to US import tariffs. This expansion reflects a broader trend among automakers like Hyundai and GM to protect domestic operations from tariff fluctuations and rising supply chain costs.
Litigation
In Michigan court, Valeo is suing American Axle & Manufacturing for $25M, alleging unpaid development costs tied to a now-canceled EV program for Stellantis' Ram heavy-duty trucks.
Valeo claims it invested tens of millions into electric motors and inverters for American Axle e-beams under a 2023 agreement before the program was terminated in April 2024.
American Axle has moved to dismiss the case, arguing that no binding contract existed.
Stellantis' previously undisclosed plan to electrify its heavy-duty Ram lineup—likely targeting the 2500 and 3500 series—was quietly abandoned amid broader EV demand softness, exposing suppliers to sunk costs.
The lawsuit underscores rising financial risk for suppliers tied to delayed or canceled OEM EV programs, particularly in capital-intensive segments like heavy-duty trucks.
Mergers, Ventures, Acquisitions
Waymo and Toyota have reached a preliminary agreement to jointly develop autonomous technology for personally owned vehicles, challenging Tesla in the consumer self-driving market.
Supported by Toyota's Woven software division, the collaboration aims to integrate Waymo's autonomous system into Toyota's retail vehicle platforms. This partnership marks a strategic shift towards consumer-facing autonomy, contrasting with Tesla's stalled licensing efforts and in-house hardware focus.
Toyota Motor Corp is also reportedly considering a partial investment in a $42B privatization of Toyota Industries Corp, a key supplier of components like hybrid batteries and inverters, and assembler of the RAV4.
This move aims to consolidate control over an essential affiliate amid a broader reorganization of Toyota Group's shareholdings.
Though no decisions have been made, this proposal aligns with Toyota's and its affiliates' shift towards capital efficiency and electrification investments, potentially enhancing vertical integration in the EV supply chain.
Uber is partnering with May Mobility to introduce thousands of self-driving vehicles on its ride-hailing platform across US cities, starting with Arlington, Texas, by late 2025.`
Opening
Aptiv is expanding its operations in China, establishing its new Wuhan plant as its largest global facility for high-voltage connectors and a new Shanghai automation plant for producing copper and aluminum busbars essential for EV platforms.
This expansion aims to localize supply chains and focus on intelligent vehicle systems for the Chinese market while reducing risks associated with US tariffs and foreign intellectual property constraints.
BYD has started constructing a $32M CKD (completely knocked down) passenger car plant in Sihanoukville, Cambodia, which will be the country's first NEV production facility, with plans to assemble BEVs and PHEVs by Q4 2025.
Regulation
US President Trump has issued executive orders granting temporary tariff relief to automakers assembling vehicles in the United States, including a short-term offset worth 15% of the vehicle's MSRP in 2025, dropping to 10% in 2026, to partially compensate for imported component costs.
The policy also eliminates cumulative tariffs on vehicle imports by exempting automakers from stacked duties on steel, aluminum, and goods from Canada and Mexico, though these exemptions do not extend to supplier-level material tariffs, which will continue to raise input costs.
Tariffs remain in full effect on parts sourced from non-regional suppliers, especially in Asia, impacting components such as electronics, battery systems, and wiring harnesses.
Automakers and Tier 1 suppliers globally now face a two-year window to reassess sourcing and reconfigure supply chains to comply with increasingly protectionist US trade policies.
While easing some immediate cost pressure slightly for US automakers, the policy intensifies long-term supply chain restructuring demands for multinational OEMs and suppliers exposed to non-US content.
US Customs and Border Protection confirmed that USMCA/CUSMA-compliant automobile parts will be exempt from the 25% import tariffs set to take effect on Saturday.
Initially, the tariff was broadly applied to all vehicle and component imports, with no distinction between domestic and trade-compliant goods. Manufacturers voiced concern due to the complexity of tracing non-American content in parts that cross the Canada-US border multiple times during production.
Under the new guidance, only knock-down kits and non-USMCA/CUSMA parts compilations will face the full tariff, while qualifying parts integrated under the trade agreement are excluded.
Tariffs on items like steel-intensive components, such as bumper stampings, will no longer be combined with duties on finished auto parts; only one of the applicable tariffs will apply per article, retroactive to March 4.
Automakers assembling vehicles in the US can claim a temporary offset on imported parts tariffs—3.75% of MSRP in the first year (based on 15% parts value) and 2.5% in the second year (based on 10% parts value)—but only up to their total tariff liability.
However, reimbursement is based on MSRP, while tariffs are applied to transaction values, creating reconciliation issues $. Companies must now submit detailed documentation on US assembly plans and tariff projections to access relief.
Despite new tariff relief measures, US automakers may still face up to $12k in tariff-related costs per imported vehicle, with domestic models like the Honda Civic and Ford Explorer absorbing $2k–$3k impacts.
Luxury imports and EVs assembled in Europe and Asia, like the Mercedes G-Wagon and Ford Mach-E, could incur the highest costs, while GM projects a total hit of $5B.
Risk Analytics
Suppliers emphasized risk reduction $ at the 2025 ACT Expo through strategic partnerships, localization, and diversified tech investment amid tariff pressures and lagging EV demand.
Forvia announced a hydrogen storage collaboration with BayoTech, while Amplify Cell Technologies highlighted its Mississippi battery JV as a catalyst for regional supplier clustering.
Firms like Schaeffler also maintain internal combustion engine R&D alongside zero-emission programs, reflecting a dual-track approach to hedge against shifting policy and market conditions.
Shutdown
Stellantis will halt production at its Windsor, Ontario, assembly plant for the week of May 5, marking its second shutdown in under a month. The pause is for preparations for the launch of 2026 models, including the Chrysler Pacifica and Dodge Charger Daytona. Unifor, representing over 4.5k workers at the plant, confirmed the temporary closure.
BMW has notified US dealers that it will postpone electric vehicle production in May, affecting its EV lineup manufactured in Germany. Though the memo did not specify the reasons, the decision follows escalating import tariffs and a saturated EV market. All four of BMW's US-market EVs are built in Germany, and the production pause suggests a shift in response to cost pressures and evolving demand dynamics.
