Automotive Supply Chain Risk Digest #436
June 6 - 12, 2025, by Elm Analytics
Editor’s Note
The countdown is on: Elm Analytics will be attending the AIAG Supply Chain Conference this coming Tuesday, June 17, in Detroit.
If you're going, we'd love to meet. Whether it’s a quick chat or a deeper dive into supply chain challenges, connecting with industry peers is always a highlight for us.
Stop by and say hi!
Nick Gaydos
Contents
BANKRUPTCY
Marelli bankruptcy highlights supplier vulnerabilities
DISASTER
Hyundai plant safety incidents raise alarms
EXPANDING
GM shifts production, invests $4 billion
Valmet expands Poland plant for EVs
INDUSTRY DIRECTIONS
China automakers under payment regulation pressure
BYD pledges faster supplier payments
MERGERS, VENTURES, ACQUISITIONS
Geely halts expansion citing overcapacity
Minda, Toyodenso form India JV
Toyota partners with Chinese tech firms
OPENING
Cyclic opens Ontario recycling facility
Nidec opens India EV parts plant
Hodek opens third Indian facility
RAW MATERIAL DISRUPTION
China to resume rare earth exports
Hyundai 1Y stockpile of rare earth materials
Stellantis reports rare earth supply risks
REGULATION
New tariffs impact auto trade volumes
Trump may hike auto tariffs
SHUTDOWN
EcoPro halts Quebec battery plant
Envision pauses BMW battery facility
Stellantis cancels Illinois battery hub
Bankruptcy
Marelli filed for Chapter 11 bankruptcy on June 10 due to liquidity issues, supply chain challenges, and tariffs.
The company owes $767M in unsecured debts to major customers Stellantis ($454M) and Nissan ($313M), along with debts to Bosch ($45M), Mazda ($30M), and Tesla ($22M).
Marelli secured $1.1B in bankruptcy financing to sustain operations during the reorganization.
This situation highlights the financial strain on its major customers and the risks faced by Tier-1 suppliers amid increasing global tariffs and liquidity constraints.
Disaster
Hyundai's Georgia EV Metaplant has seen three construction deaths $ and over 15 serious injuries since 2023, raising alarms over safety culture and oversight amid the site's accelerated build schedule.
Expanding
General Motors will invest $4 billion across three US facilities to shift production from Mexico and reconfigure domestic operations in response to new tariffs and evolving industrial policy. The investment will reshape the company's manufacturing footprint as follows:
Orion Assembly (Michigan):
Canceled EV plans; will now produce gas-powered full-size SUVs and light-duty pickups by early 2027.
Fairfax Assembly (Kansas):
Will produce gas-powered Chevrolet Equinox in mid-2027 and begin Chevrolet Bolt EV production by end of 2025.
Spring Hill Manufacturing (Tennessee):
Will absorb Chevrolet Blazer production from Mexico and continue producing Cadillac Lyriq, Vistiq, and XT5.
The realignment utilizes underused US capacity without reducing North American production, while EV manufacturing will be consolidated at Factory Zero in Detroit.
Valmet Automotive expanded its Zary, Poland, plant by 94.7k ft² to increase the output of convertible roof systems and kinematic EV components like charging flaps and active spoilers.
Industry Directions
Amid intensifying price competition, several Chinese automakers—including Dongfeng, GAC, China FAW, and EV leader BYD—have pledged to comply with new regulations mandating supplier payments within 60 days.
Effective June 2025, the rules aim to stabilize capital flows and protect smaller suppliers from deferred payments and non-cash instruments like promissory notes, which BYD has widely used via its Dilian platform.
BYD alone took an average of 275 days to pay suppliers in 2023, a practice that contributed to a much higher effective debt load than reported, according to GMT Research.
Delayed supplier payments to offset financial strain from China's EV price war have exposed deep vulnerabilities in the automotive supply chain.
pandaily: Why BYD's 60-Day Supplier Payment Pledge Could Reshape China's Auto Industry
Mergers, Ventures, Acquisitions
Geely's Chairman, Li Shufu, declared that the auto industry faces "serious overcapacity" and that the company will not build or expand factories, citing excess production and global price pressure.
The decision comes amid an intense EV price war in China, pushing OEMs to curb investment and redirect focus to overseas markets using existing capacity.
Minda and Toyodenso will launch a Noida, Uttar Pradesh, India, JV to localize the production of automotive switches for India's growing vehicle electronics market.
Toyota is partnering with Huawei, Xiaomi, and Momenta to localize AI-driven cockpit, connectivity, and driving assistance systems for its Chinese-market EVs under the "China R&D 2.0" initiative.
This deep regional integration signals a strategic shift to region-led innovation, which is especially important for China, where market differentiation is exceptionally competitive.
Opening
Cyclic Materials plans to spend $25M to open a 140k ft² rare earth recycling facility in Kingston, Ontario, to supply recycled inputs for EV motors.
Nidec's new $55M Orchard Hub plant in Karnataka, India, will produce EV motor components to support India-based and export automotive supply chains.
Hodek Vibration Technologies opened a third plant in Dharwad, India, to manufacture torsional vibration dampers, focusing on emerging EV and hydrogen vehicle platforms as demand for internal combustion engines shifts.
Raw Material Disruption
China has agreed in principle to resume nonmilitary rare earth magnet exports to the US, Europe, and Southeast Asia, with companies like JL Mag Rare-Earth receiving licenses under a complex protocol.
While this may relieve short-term pressure on US automakers reliant on Chinese rare earths, it highlights Beijing's strategy to maintain market leverage without driving a Western supply chain exodus.
Exporters must comply with strict end-user documentation, creating uncertainty for OEMs. This balancing act prolongs vulnerabilities in EV magnet sourcing, exposing automakers to policy shifts and licensing constraints.
Hyundai Motor has stockpiled enough rare earths and magnets to shield EV and hybrid production from China-related disruptions for about a year.
Stellantis reports stable rare earth supply for June but admits past struggles, highlighting continued sourcing risks tied to China's export restrictions.
Regulation
New US tariffs on vehicles and parts are already affecting trade, with steep drops in ocean imports during May. The shift signals early supply chain disruption and strategic delays, especially for overseas automakers.
Auto parts imports fell 14.7% year-over-year in May (≈119,100 fewer metric tons).
Finished vehicle imports dropped 8.9% (≈52,911 fewer metric tons).
Reuters: Trump says he may soon hike auto tariffs to get more US production
Shutdown
EcoPro BM has suspended construction of its Bécancour, Quebec battery plant project due to US tariffs and weakening EV demand. The delay follows earlier setbacks, including Ford's exit, and no restart timeline has been announced.
Envision AESC halted further work on its $1.6B South Carolina battery plant, intended to supply BMW's Neue Klasse EVs, citing uncertainty around federal EV incentives and clean energy funding. The move deepens concerns that political risk is undermining investment confidence in the US battery supply chain.
Stellantis has canceled its planned Illinois EV battery plant and parts hub despite previously securing federal funding and union agreements to support the project.
While the Belvidere Assembly Plant will reopen in 2027, the decision signals shifting investment priorities and creates instability for suppliers counting on future battery demand and regional production scale-up.
