Editor’s Note
The Elm Analytics team will be attending the AIAG Supply Chain Conference on June 17, 2025, in Detroit, Michigan.
If you're planning to be there, we'd love to connect and hear what you're seeing in the field.
Whether it's a quick hello or a deeper conversation about supply chain resilience, come find us—we're always eager to learn from fellow industry leaders.
Hope to see you there!
Nick Gaydos
Contents
CLOSING
Goodyear closes South Africa plant
DISASTER
EV cargo ship fire off Alaska
HUMAN CAPITAL
VW considers Wolfsburg four-day week
OPENING
Halms opens aluminum plant in Hungary
AESC opens battery plant in France
Yongsheng building Moroccan tire plant
TYW opens auto parts plant Mexico
RAW MATERIAL DISRUPTION
Carmakers plan China workaround strategy
Rare earth curbs threaten auto output
Export permits bottleneck global supply
Suzuki halts Swift over part shortage
REGULATION
China urges end to EV price war
RISK ANALYTICS
Court decisions strike IEEPA tariffs
Trump tariff proposals June 2025
Likely Trump tariff landing spot
SHUTDOWN
Stamp failure halts Stellantis Sochaux plant
Closing
Goodyear will shutter $ its Kariega, South Africa, tire plant as part of its EMEA transformation plan, impacting 1k jobs and eliminating a 10k unit/day capacity. The closure underscores global consolidation efforts amid broader divestitures under the Goodyear Forward strategy.
Disaster
A fire aboard the EV-laden Morning Midas cargo ship off Alaska prompted the entire crew to evacuate and remains uncontained due to battery explosion risks. The incident highlights escalating maritime transport risks linked to surging Chinese EV exports to Latin America and lithium-ion battery hazards.
Human Capital
Volkswagen is considering a four-day workweek at its Wolfsburg plant by 2027 as it transitions to full EV production and reduces capacity. The shift reflects broader restructuring efforts to ease labor costs while preserving employment amid declining returns on EVs.
Opening
Chinese automotive parts manufacturer Halms, part of Huashou Group, is establishing its EU headquarters and a new plant in Miskolc, Hungary.
The $227M investment will eventually employ 1k to produce 1M–2M recycled aluminum parts annually for OEMs like Volvo and Tesla using high-pressure casting, machining, and assembly.
This expansion follows a processing site opening in Debrecen and is likely connected to a nearby Volvo EV plant in Košice, Slovakia.
AESC, majority-owned by China's Envision Group, opened a 10GWh battery plant in Douai, France, to supply Renault, supported by $54M in French state aid. The facility expands local EV capacity and reflects strategic battery localization by Chinese-owned firms.
Shandong Yongsheng Rubber will build a tire plant in Morocco $ with a 6M unit annual capacity, becoming the second Chinese producer to locate in the country. This follows a similar JV move in Saudi Arabia, positioning the firm closer to EMEA markets amid rising supply chain localization.
Chinese supplier TYW Manufacturing has opened a $50M plant in Irapuato, Mexico, to produce instrument panels for Kia and Stellantis, with an anticipated workforce of 1k. The move deepens China's growing role in Mexico's auto supply base in the area and supports electronics exports to the US and Korea.
Raw Material Disruption
Facing severe disruption from China's export restrictions on rare-earth magnets, automakers and suppliers are considering extraordinary workarounds $, including relocating motor production to China or shipping US-made motors there to install magnets.
These contingency plans stem from China's April decision to require export licenses for magnets made with rare-earth materials like dysprosium and terbium, materials it dominates globally.
The shortage has already led to plant shutdowns, including Ford's week-long halt at its Chicago Explorer plant, and industry leaders warn that further closures in Europe, Japan, and India are imminent as inventories dwindle.
Manufacturers are also exploring alternatives such as non-rare-earth motor designs and downgrading components like seats and speakers, but none offer near-term relief.
Industry analysts and suppliers warn that China's restrictions on rare earth magnet exports may trigger a more profound and prolonged disruption to global automotive production than the 2021–2023 microchip crisis.
ZF, a supplier of EV drivetrains and chassis systems, anticipates lower vehicle output in the second half of 2025 due to rare earth availability, citing the statistical certainty that missing even one magnet-dependent part can halt final assembly.
While automakers work to manage rare earth magnet shortages, few realize that export approvals are controlled by a small office in China's Ministry of Commerce, where only three senior officials initially had the authority to approve permits.
Despite a recent staffing increase to 60, suppliers say the approval process remains slow, complex, and invasive, requiring technical documentation, facility photos, and sometimes sensitive IP.
Industry analysts and US officials suggest the bottleneck may be a "strategic excuse" rather than a bureaucratic backlog, pointing to the controls as possible retaliation for US semiconductor export restrictions.
With only a fraction of applications approved and long delays common, this licensing process has become a hidden but potent chokepoint in the global auto supply chain.
Suzuki Motor has become the first Japanese automaker confirmed to suspend vehicle production due to China's rare earth export restrictions, halting its flagship Swift subcompact line on May 26.
The company cited a component shortage and now anticipates a partial restart by June 13, with full production resuming after June 16.
Though Suzuki declined to publicly attribute the stoppage to rare earths, sources familiar with the matter reportedly confirmed the disruption stems from China's April decision to curb exports of rare earth elements and related magnets.
The suspension highlights how deeply rare earth materials are integrated across compact vehicle platforms, not just EVs.
Regulation
China's industry ministry and auto association have called for a stop to price wars after deep EV discounts led by BYD triggered industry-wide undercutting. Officials warn the tactic threatens industry sustainability and may prompt enforcement actions against below-cost dumping.
Risk Analytics
Foley: What Every Multinational Company Should Know About:
Shutdown
Stellantis' Sochaux plant in eastern France, which produces the Peugeot 3008 and 5008 SUVs, will resume operations after a $37M Chinese-made stamping press failure halted production for several days.
The outage began on Monday and resulted in a loss of about 1k vehicles daily at the facility with 3k employees.
The press, installed in 2020, is crucial for flexible body part production and failed amid supply issues due to China's rare earth export restrictions. Production is expected to restart on June 6, pending equipment tests.
A lot to be concerned about, globally.
The 'Likely landing spot for Trump tariffs' article in the links is an eye opener to how complex US vehicle manufacturing has become, in a very short space of time, and the obvious cinsequence of impacts to global trade. It suggests the ultimate risk appears to be on-shoring of US manufacturing, will result in ever-increasing price hikes for vehicles initially.
In turn, this will possibly end up in huge job losses globally, including the US, creating greater numbers of poverty. Greater poverty tends to result in more disorder.
Maybe not the greatest of times ahead of us...!!!
And yes, if you're thinking this is a sour note to post, it is, these are sour days, that will last a long period of time.