Elm Analytics - Automotive Supply Chain Risk Digest #236 - August 13 - 19, 2021

CHANGE IN MANAGEMENT

Nexteer appointed Robin Milavec as President. He will also retain his current role of Global Chief Technology Officer, Chief Strategy Officer, and Executive Board Director.

EXPANDING

Honda will expand its Guangzhou, China, factory. It will add an additional production capacity of 120k EVs annually.

INDUSTRY DIRECTIONS

Bloomberg: Waymo Is 99% of the Way to Self-Driving Cars. The Last 1% Is the Hardest

US EV registrations more than doubled in the first half of this year compared to the first half of 2020. Tesla's Model Y accounted for 38% of all EVs registered in the first half.

Sumitomo Metal developed a new recycling technology that allows it to reclaim nickel and cobalt from used rechargeable batteries. The recycled materials can be reused in new batteries.

LABOR DISPUTE

Workers at GM's Silao, Mexico plant voted to terminate their contract through their union. The union was allegedly caught destroying ballots in a vote in May. The US government filed a complaint under the USMCA, prompting the revote in August.

LITIGATION

A federal judge sentenced FCA to pay $30M after pleading guilty to one count of conspiracy to violate the Labor Management Relations Act in March.

MERGERS, VENTURES, ACQUISITIONS

Faurecia has acquired a majority stake in German auto light maker Hella. The $7.9B deal will close early next year.

Chinese battery maker CATL is investing $9B into boosting its production of lithium-ion batteries. The investment will see several new factories built in the Fujian, Zhejiang, and Guandong provinces in China.

OPENING

AKASOL officially opened its Gigafactory 1 in Darmstadt, Germany. The facility launched with an annual capacity of 1 GWh and has plans to grow to 2.5 GWh in the coming year.

KORE Power will build a 12 GWh battery plant in Maricopa County, Arizona. It plans to begin production in Q2 2023.

FREYR Battery is building its first of five plants in Rana, Norway. Launching in the second half of 2022, the company plans to scale to produce 35 GWh annually.

Ford has begun reworking its German Niehl Assembly Plant into the Cologne Electrification Center. Production will start in 2023.

PRODUCTION DECREASE

Toyota will reduce production by 40% in September, affecting 14 plants. Previously, the company's planning had left it operating normally, unlike most automakers. However, Covid-19 outbreaks in Asia are causing supply disruptions.

VW expects a tight supply of semiconductors in Q3 and may need to cut production even further.

RAW MATERIALS

The price of palladium has tripled since 2018. Suppliers are finding ways to substitute, now cheaper, platinum in new catalytic converters.

RECALLS

GM recalled around 68k Bolt EVs globally to replace all battery modules and reduce fire risk. GM had originally only planned to replace defective modules.

REGULATION

NHTSA may raise penalties for automakers that have failed to meet fuel efficiency requirements in recent years. In 2016, the Trump administration delayed a rule to double penalties starting with the 2019 model year.

With little domestic mining or production capacity, the US DOE will invest significant amounts of money in materials projects.

SHUTDOWN

Ford will stop the assembly of its F-150 next week at its Kansas City Assembly Plant. GM will shut down Chevrolet Bolt production at its Lake Orion, Michigan plant. Both closures are due to the ongoing chip shortage.

Mazda shut down its Japanese plants in Hiroshima and Yamaguchi Prefecture due to torrential rains.