Elm Analytics - Automotive Supply Chain Risk Digest #237 - August 20 - 26, 2021
CHANGE IN MANAGEMENT
Lordstown Motors has named Daniel Ninivaggi as its new CEO. Ninivaggi also serves as chairman for Garrett Motion Inc.
EXPANDING
Chinese EV manufacturer XPeng is doubling the production capacity at its facilities in Zhaoqing.
Toyota Motor Manufacturing Kentucky will dedicate a line to produce hydrogen fuel cells. The heavy-duty commercial truck fuel cells will begin production in 2023.
MERGERS, VENTURES, ACQUISITIONS
Great Wall Motor (GWM) has purchased Daimler's Iracemápolis plant in Brazil. GWM plans to update the factory and estimates the annual production of 100k vehicles.
Mazda is forming a new venture with two Chinese partners: Changan Mazda Automobile Co. Mazda and Chongqing Changan Automobile will each hold a 47.5% stake, with FAW holding 5%. Mazda sold 214k vehicles to the Chinese market in 2020, while Toyota, Honda, and Nissan all sold over 1M.
This week, Samsung announced a massive $205B investment into semiconductors, bio, telecommunication, and information technology. Over the next three years, the company plans to hire 40k people directly.
BorgWarner is investing $10M into plastic waste recycler Enexor BioEnergy as part of its plan to achieve carbon neutrality by 2035.
Semiconductor maker Onsemi is spending $415M to buy silicon carbide maker GT Advanced Technologies. Automakers are switching to chips made from silicon carbide versus standard silicon because they are more energy-efficient.
OPENING
Auto parts maker Sungwoo Hitech is investing $8.75M into a new 375k sf plant in Telford, Tennessee. The plant will supply parts to GM.
This week, Magna opened a new plant in Sunderland, England, employing 300 when it reaches planned capacity. The facility will provide components such as body and chassis parts.
Hyundai Mobis is investing $1.13B into building two new hydrogen fuel cell plants in Korea by 2025. Construction will begin in 2023.
PRODUCTION DECREASE
UK car production for July fell to its lowest rate since 1956, falling by 37.6% compared to July 2020.
RECALLS
GM recalled its Chevy Bolt EVs for the third time in nine months, but will they pick up the tab or its battery supplier, LG?
REGULATION
Mexico is seeking trade talks with the US over different interpretations of the USMCA North American content requirements.
Despite being approved by voters via ballot measure last November, a California judge this week ruled that the state's "gig worker" law is unconstitutional. The judge commented that the rule "limits the power of a...legislature to define app-based drivers as workers subject to workers' compensation law."
India's revenue secretary, Tarun Bajaj, indicated the country was open to discussing the tax rate on automobiles. Automakers have pushed for lower rates which are as high as 28%.
RISK ANALYTICS
Automation, tooling, and factory equipment manufacturers are swimming in EV-fueled demand. Already at capacity, they are hesitant to expand. "We ran out of capacity for any additional work about a year and a half ago," said Mike LaRose, CEO of Kuka (Americas). "Everyone's so busy, there's no floor space."
In an interview on CNBC this week, Bosch board member Harald Kroeger outlined problems with the current semiconductor supply chain. "...some of these semiconductors need six months to be produced, You cannot run on a system [where] every two weeks you get an order. That doesn't work".
SHUTDOWN
Next week, Volvo is halting production at its plant in Torslanda, Sweden, due to the semiconductor shortage.
SUPPLY CHAIN
Supply Chain Dive published an overview of how automakers are working to increase semiconductor supply chain transparency.
Los Angeles Times: The world's supply chain problem keeps getting worse