Elm Analytics - Automotive Supply Chain Risk Digest #265 - March 4 - 10, 2022
LMC Blog: Nearshoring: The solution to North America's chip woes?
This week, the Michigan Court of Appeals published an opinion on an ongoing lawsuit between the Piston Group and the Michigan Minority Supplier Development Council over MBE certification. The Michigan Bar summarizes the case in their latest journal under Business Law.
MERGERS, VENTURES, ACQUISITIONS
Sony has signed a memorandum of understanding with Honda to explore developing EVs together. Honda would build the cars while Sony would provide the mobility service platform.
GM is investing $393M into a new EV battery material plant in Becancour, Quebec, Canada. The plant will be a JV with Posco Chemical and supply cathode active material for GM's Ultium cells plants in the US.
Continental is forming a new JV with Nisshinbo in India to produce valve blocks for electronic brake systems. Nisshinbo would machine the valve blocks and then send them to Continental's plant in Gurgaon for assembly.
Germany gave Tesla's new Berlin facility the go-ahead after construction began nearly two years ago. Setbacks have plagued the project, from environmental impacts to filling available positions. The plant aims to produce a vehicle within 10 hours of production time.
VW will build a new EV factory near its existing Wolfsburg-Warmenau plant in Germany. The announcement comes the same week as Tesla's approval to move forward at its new Berlin plant. Like Tesla, VW plans on a 10-hour production window for its flagship Trinity EV project.
Panasonic is looking to invest billions into a new EV battery plant in Oklahoma or Kansas. The plant would build a new type of EV battery for Tesla vehicles.
Toyota will cut domestic production from April through June. The company will reduce output by up to 20% to lessen the strain on suppliers impacted by parts shortages.
The impact of the Ukrainian crisis continues to affect the European auto industry. Suppliers like Forschner, Kromberg & Schubert, Prettl, SEBN, and Yazaki produced almost 7% of the EU's imported wire harnesses in Ukraine.
AvtoVAZ, Russia's largest OEM, will partially resume production at its Togliatti and Izhevsk plants on March 16. Despite ongoing component shortages, the company is ramping back up to reduce the financial impact on its staff. Renault, AvtoVAZ's parent company, makes 8% of its revenue in Russia. According to Citibank, Renault is one of the most exposed Western companies operating in the country.
The price of nickel, a crucial element in EV batteries, has doubled following Russia's invasion of Ukraine. Uncertainty over metal supplies has also pushed up the cost of aluminum and palladium.
BMW recalled over 1M vehicles worldwide due to engine ventilation issues that can start a fire. The automaker said a remedy is still being developed and will likely be ready by mid-2022.
US regulators dropped rules (pdf) for fully autonomous vehicles to require manual driving controls.
The ongoing Russian invasion has forced Bosch to suspend production in Kyiv, Ukraine.
Jeep Cherokee production stopped this week due to a semiconductor-related parts shortage at Stellantis' assembly plant in Belvidere, Illinois.
Stellantis' Vigo plant in Spain was closed this week due to a chip supply disruption.
Russia's invasion of Ukraine could exacerbate the semiconductor shortage due to both countries' heavy contributions to the supply of semiconductor materials. Not only does 70% of the global supply of neon (a gas used in lasers that manufacture chips) come from Russia and Ukraine, but automakers also source aluminum, nickel, palladium, and pig iron from them for use in chips.