Elm Analytics - Automotive Supply Chain Risk Digest #198 - November 20 - 26, 2020

BANKRUPTCY

China's Huachen has defaulted on almost $1b in debt obligations. Huachen is the parent company of Brilliance, BMW's Chinese joint venture partner. Reuters digs into how its management squandered opportunities and made poor decisions.

CHANGE IN MANAGEMENT

Ford has named former eBay marketing head Suzy Deering as its new CMO.

HUMAN CAPITAL

Renault's unions have approved the automaker's plan to cut 2,500 white-collar jobs. Renault is hoping to cut an additional 2,100 blue-collar jobs at a later date.

INDUSTRY DIRECTIONS

Economists believe the auto industry will continue its upturn in 2021 through 2022.

IEEE Spectrum: GM Opens Up a New Front in Its Battle With Tesla: Batteries

Analysts believe that China and other emerging markets' EV sales will mark the end of the "Oil Era."

LABOR DISPUTE

Toyota has halted operations at its assembly plant in Bidadi, India, due to an ongoing worker strike. The union has demanded the withdrawal of the suspension of a worker.

LITIGATION

Tesla is issuing two recalls covering around 9.5k vehicles. The first covers Model X cars from 2016 with roof trim that may separate, while the second covers Model Y cars from 2020 that may have improperly tightened bolts.

Despite their petition to avoid a recall, the NHTSA says that GM must recall 5.9M trucks and SUVs from 2007-2014 due to faulty Takata airbag inflators.

MERGERS, VENTURES, ACQUISITIONS

Chemical company Ineos is partnering with Hyundai to increase the volume of hydrogen fuel cell vehicles they can make.

PLANT CLOSING

During his keynote speech at the European Battery Conference, Elon Musk revealed Tesla's plan to build the world's largest EV battery plant in Brandenburg, Germany. The plant would have an initial production capacity of 100gWH with the potential to expand to 200-250gWH.

PLANT RELOCATION

Sweden's Autoliv will relocate production and inflator-related engineering from Vargarda, Sweden, to existing Romania and France locations.

PRODUCTION DECREASE

Plants in Chihuahua, Mexico, have returned to the red light, allowing them to only operate Monday - Friday at 60% capacity.

REGULATION

GM is reversing course and will no longer back the Trump administration's efforts to restrict California's ability to set its own emissions rules. The automaker is now going to work with President-elect Joe Biden.

In an effort to prevent "greenwashing," the EU is considering changes to auto emissions limits to qualify as "sustainable" investment finance rules.

Analysts predict a no-deal Brexit would cost the UK automotive sector $73B.

Despite their plan to ban new gas and diesel-powered cars starting in 2030, the British government will allow hybrids to be sold until 2035.

The UK signed an interim trade deal with Canada late last week in preparation for Brexit. The UK says the agreement paves the way for future negotiations on a new tailor-made agreement between them.

RISK ANALYTICS

Analytics firm LMC Automotive says new coronavirus lockdowns in Europe will lead to the loss of around 300k new car sales.

SUPPLY CHAIN

The EU believes it will be self-sufficient in the production of EV batteries by 2025. Currently, 80% of lithium-ion cell production occurs in China.