Automotive Supply Chain Risk Digest #438
June 20 - 26, 2025, by Elm Analytics
Dear Reader,
Just like a well-tuned assembly line, sometimes even the best need a quick retooling.
The Automotive Supply Chain Risk Digest will take a short pause and shift gears back into your inbox on Friday, July 18th, right on schedule for your Friday morning routine.
Thanks for riding along with us! We’ll see you soon with more risk insights to keep your supply chain revved and resilient!
Warmly,
Nick Gaydos
Contents
BANKRUPTCY
Hozon enters bankruptcy amid EV slump
Northvolt gets foreign bid amid closure
DISASTER
Car carrier sinks of Alaska with EVs
EXPANDING
Advanced Composites expands Mexico plant
Sekisui expands molding in India
HUMAN CAPITAL
US suppliers lay off over 22k
LABOR DISPUTE
GM Mexico workers vote on union
MERGERS, VENTURES, ACQUISITIONS
Superior Industries delisted, seeks loan
OPENING
SL MEX nears Mexico plant launch
GAC opens EV plant in Indonesia
PRODUCTION DECREASE
Audi China plant faces software delays
BYD cuts shifts, delays new lines
PRODUCTION INCREASE
BYD stable production, rising market share
Sharda Motor starts Chakan production
RAW MATERIAL DISRUPTION
Rare-earth delays disrupt US production
RECALLS
France recalls 2.5M Takata-affected cars
REGULATION
China boosts exports via used zero-mileage loophole
Bankruptcy
Hozon, the parent company of Neta, has officially entered bankruptcy proceedings after failing to raise funds and facing falling sales in China's crowded NEV market. The case highlights growing financial pressure on smaller EV players amid industry consolidation in China.
Swedish battery maker Northvolt, which filed for bankruptcy in March 2025, has received an initial offer from a foreign company for its Swedish operations.
The proposal includes their factory in Skellefteå and their research and development center in Västerås. While the offer is being reviewed, it's anticipated that operations at the Skellefteå plant will wrap up by the end of June.
Disaster
The Morning Midas, a car carrier chartered by SAIC Anji Logistics, sank 360 nautical miles off Alaska on June 23 after a fire broke out on June 3.
It was transporting over 3k vehicles—including SAIC, Chery, and Great Wall models, many of which were electric—from Yantai, China, to Lázaro Cárdenas, Mexico.
All 22 crew members were safely evacuated in an incident that highlights the rising risks of shipping electric vehicles by sea.
Expanding
Japan's Advanced Composites has invested $10.5M to expand its Aguascalientes, Mexico, plant, boosting annual output to 9k tons of automotive plastic compounds.
The upgrade enhances logistics capacity and supports supply to OEMs such as Nissan, GM, and Toyota.
Sekisui Chemical will expand its injection molding capacity in Pune, India, by 15%. The new plant is set to open in January 2026, serving the growing regional OEM demand.
Human Capital
US auto suppliers are laying off workers and canceling expansion plans as tariffs and policy shifts delay OEM investments and squeeze cash flow.
Smaller firms, such as SMT Automation in Southfield, Michigan, and larger players, including Magna and Marelli, are feeling the effects, with over 22k jobs lost in the sector over the past year.
Labor
Workers at GM's San Luis Potosí plant in Mexico are voting on union representation, with independent union SINTTIA seeking to raise wages well above the current $3/hour level.
The outcome may influence labor costs and compliance as the 2026 USMCA wage review nears, which stipulates a $16/hour wage goal for auto workers—a target still far from current rates.
Mergers, Ventures, Acquisitions
Superior Industries, an aluminum wheel supplier based in Southfield, Michigan, was delisted from the NYSE on June 25 after its share price fell below $1 and its market capitalization dropped below $15M due to lost OEM contracts.
Now trading on the OTC Pink Open Market, the company is facing operational challenges and US aluminum tariffs.
Discussions with Oaktree Capital Management regarding a potential acquisition and access to up to $70M in loans are ongoing.
Opening
South Korea's SL MEX is nearing the launch of its $45M new headlight module plant in San Luis Potosí, Mexico. The 958k ft² facility will supply BMW, GM, Hyundai, and Kia.
The plant, already built and nearing launch, will host 12 lines with a capacity for 1M million units annually, reflecting a broader trend of Asian suppliers nearshoring to Mexico.
GAC Group has opened an assembly plant in Jakarta, Indonesia, with an annual capacity for 50k vehicles, starting with BEVs and later adding hybrids.
Production Decrease
Audi is facing production delays at its new $2.8B EV plant in Changchun, China, which was launched in late 2024 to build the Q6L and A6L e-tron.
Despite high levels of automation, output is slower than planned due to issues with VW Group's E3 1.2 software and unresolved battery control glitches, with some vehicles parked awaiting stable updates.
As Audi's first majority-owned JV in China and key to its electrification push, the plant is designed to produce up to 150k EVs annually.
With EVs accounting for less than 5% of Audi's China sales in 2023, these setbacks could hinder its efforts to regain ground in the world's largest EV market.
Two reports released on June 25–26 paint conflicting pictures of BYD's production and inventory status in China.
Reuters, citing unnamed sources, reports that BYD has cut night shifts, reduced output by at least one-third at several factories, and delayed new production lines due to weak domestic sales and high dealer inventory, reportedly more than twice the industry average.
It also notes a 29% drop in output from Q4 2024 to April and May. continued ⤵
Production Increase
Meanwhile, CnEVPost, quoting a source close to BYD, claims production remains stable, dealer inventory is under control, and market share has risen from 15% to 17%.
It also highlights dealer support measures, such as rebates and an "inventory meltdown" system that pauses shipments when stock levels are too high.
The contrast highlights uncertainty in China's EV market and raises questions about demand, transparency, and the pace of BYD's growth.
Sharda Motor was cleared to begin producing exhaust, suspension, and seating components at its new Chakan, Maharashtra plant in India on June 23, 2025.
Raw Material Disruption
Despite President Trump’s June 11 trade deal announcement with China, US firms are still waiting on rare-earth magnet shipments amid ongoing permit delays. China’s export licensing remains slow and opaque, leaving automakers and defense contractors uncertain about supply.
The shortage has already halted production at some auto plants, with Ford and Toyota reporting disruptions, while GM has partially offset risk through alternative sourcing.
Tensions remain high as US export restrictions on chip software and other goods stay in place pending Chinese compliance. The unreliable flow of rare-earths is straining supply chains and accelerating efforts to localize magnet production.
Recalls
France has recalled 2.5M vehicles equipped with defective Takata airbags after a fatal incident involving a Citroën C3, with a "do not drive" order issued in hot-climate regions.
The recall expands a long-standing global safety issue, now gaining urgency in Europe due to an accelerating rate of airbag-related fatalities.
Regulation
China's auto sector is reportedly exploiting regulatory loopholes to boost sales by exporting unsold new cars as "used," with support from local governments eager to meet Beijing's growth targets.
Despite national criticism, at least 20 regions, including Guangdong, Sichuan, and Shenzhen, offer incentives such as tax rebates and fast-track licensing to promote the practice.
As a result, over 90% of China's used car exports in 2024 are "zero-mileage" vehicles, which masks domestic oversupply and intensifies price wars.
The trend is drawing global pushback, with countries like Russia and Jordan tightening import rules to curb perceived dumping, raising concerns about trade distortions and potential retaliation.
