Automotive Supply Chain Risk Digest #433
May 16 - 22, 2025, by Elm Analytics
Contents
BANKRUPTCY
Northvolt to end battery production
CLOSING
Nissan considers global plant closures
DISASTER
Kumho Tire fire halts operations
EXPANDING
Xiaomi expands EV plant capacity
Nidec India adds new factory building
LITIGATION
Stellantis wins supplier contract case
MERGERS, VENTURES, ACQUISITIONS
Ford, Nissan share Kentucky battery plant
Lumax Auto fully acquires IAC India
OPENING
CATL launches battery base in Shandong
Yasa opens UK electric motor plant
Hyundai starts factory in Saudi Arabia
BYD to open HQ in Budapest
REGULATION
US-UK trade deal impacts tariffs
Customs, claims risks for multinationals
RELOCATING
Mercedes moves Michigan HQ to Georgia
SUPPLY CHAIN
Toyota upgrades supply chain platform
Bankruptcy
Bankrupt Swedish battery maker Northvolt will end production at its Skellefteå plant by June 30 after failing to secure a buyer. The collapse severs a major European EV battery supply chain link, with partial asset sales still under negotiation.
Closing
Nissan may shutter plants in Japan and overseas—including in Mexico, India, and Argentina—as part of a sweeping plan to cut its global footprint to 10 factories and reduce its workforce by 15%. The plan includes the possible closure of its historic Oppama plant and a shift in pickup production to Mexico.
Disaster
A major fire at Kumho Tire's plant in Gwangju, South Korea, was extinguished on May 20 after burning for 76 hours, prompting plans to demolish the remaining factory structure to prevent re-ignition.
The plant, which employs 2.3k workers, has halted operations indefinitely, with recovery and dismantling expected to take months. Over 1.2k damage claims have already been submitted by affected nearby residents.
Expanding
Xiaomi will complete Phase 2 of its EV plant in Beijing, China, by mid-June, just as it prepares to launch the YU7, its second model. With Phase 3 already under construction, Xiaomi is racing to expand beyond the 300k unit capacity of its first two phases to meet a 350k unit delivery target for 2025.
Nidec India has begun construction on 298k sq ft third building at its Neemrana, Rajasthan facility to expand production of electronic power steering systems, park lock actuators, and electric water pumps.
Litigation
The Michigan Court of Appeals ruled that Stellantis' contracts using quantity ranges are enforceable, bolstering the automaker's position in ongoing supplier disputes. This ruling strengthens buyers' leverage in contract law disputes.
It could have far-reaching implications for supply chain agreements in the automotive industry, especially amid growing pricing conflicts and contractual ambiguity, pending any intervention by the Michigan Supreme Court.
Mergers, Ventures, Acquisitions
Ford will share one of its two BlueOval SK battery factories in Glendale, Kentucky, with Nissan due to soft EV demand and high production costs. Although both plants are complete, only part of one produces batteries for Ford, while the other remains idle.
Nissan, facing $4.5B in Q1 losses and halted battery plant construction in Japan, will now utilize the facility to source US-made batteries and sidestep tariff risks. Ford's shift reflects broader industry pullbacks: Ford's Model e division lost $850M last quarter and abandoned a new E/E architecture project.
Lumax Auto Technologies will fully acquire IAC India by taking over the remaining 25% stake, reinforcing its Tier-1 status in automotive plastics and EV interiors. The deal secures IAC India's design and production capabilities across five plants and a 330-member engineering hub in Pune, India, while strengthening ties with major OEM customers, including Mahindra, Maruti Suzuki, and Volkswagen.
Opening
CATL has opened its first northern China battery base in Jining, Shandong, starting with 60 GWh of capacity over an immense 5.7M sq ft footprint; the company aims to bolster regional supply and reduce logistics risk.
Yasa has opened a $15.2M axial-flux electric motor factory in Yarnton, UK, capable of producing over 25k units annually. The advanced facility supports Mercedes-Benz Group programs and OEM clients like Ferrari and Lamborghini.
Hyundai and Saudi Arabia's Public Investment Fund have broken ground on building a $500M factory in Saudi Arabia to produce 50k vehicles a year, localizing EV and ICE production by Q4-2026.
BYD will officially open its European HQ and R&D center in Budapest, Hungary, advancing its localized EV production and design capabilities alongside its expanding Szeged EV factory.
Regulation
The Trump administration's trade deal with the UK reduces US tariffs on British vehicle imports to 10%, benefiting UK automakers but drawing criticism from US manufacturers who face 25% tariffs on Canadian and Mexican imports unless strict USMCA content thresholds are met.
The American Automotive Policy Council argues that this places North American OEMs at a competitive disadvantage and expresses disappointment in prioritizing the UK. Automakers are now seeking similar tariff relief for Canada and Mexico ahead of the 2026 USMCA review, which will likely involve stricter origin rules.
Relocating
Mercedes-Benz will shutter its Farmington Hills, Michigan, financial HQ and relocate 400 roles to Georgia, consolidating operations in a new R&D hub near Atlanta. Despite opening the Michigan site in 2022, underuse and strategic focus on tech talent in Atlanta are driving the move.
Supply Chain
Toyota Motor North America has replaced 75 legacy spreadsheets with a unified, cloud-based supply chain forecasting platform that now offers suppliers 52-week production outlooks—four times longer than the previous 13-week window.
The change consolidates manufacturing, service, and stock forecasts into a single, transparent system, improving supplier collaboration and operational planning. Designed in response to pandemic-era supply disruptions, the upgrade will initially reach 100 Tier 1 suppliers and expand to 700 by year-end.
