Elm Analytics - Automotive Supply Chain Risk Digest #307 - December 23 - 29, 2022
HL Mando is investing $11.1M to upgrade its plant in Opelika, Alabama. Another Opelika auto supplier, CarTech, is investing $18.3M into expanding its plant by 85.8k sq ft.
Sion Power will expand its Tuscon, Arizona, large-format EV battery manufacturing facility, doubling its footprint.
2022 marked a pivot in the Chinese automotive market. Strong EV sales pushed Chinese brands to outsell global brands for the first time ever in September. The China Passenger Car Association forecasts that EV sales will climb 30% in 2023, while ICE sales will drop 10%.
Chinese EV exports rose to record highs, with Belgium and England importing more than 70% of the shipments.
Workers at Audi's Puebla, Mexico plant plan to strike on January 1 if they can't reach an agreement with the company. They voted down two offers negotiated by its union, SITAUDI and Audi.
In January, the UAW will begin negotiations for workers at the Ultium Cell plant in Warren, Ohio. The union is looking to unionize the Spring Hill, Tennessee, and Delta Township, Michigan Ultium plants.
Canoo filed a lawsuit alleging several former employees stole intellectual property and trade secrets, violating separating agreements. The filing states the EV startup "Harbinger strategically recruited at least 33 of Canoo's employees."
NHTSA is investigating Tesla for two more accidents that may have been caused by vehicles operating in Full Self-Driving mode. There are now 41 NHTSA investigations into Tesla and its Autopilot or Full Self-Driving modes.
MERGERS, VENTURES, ACQUISITIONS
Stellantis is in talks to purchase a stake in hydrogen fuel cell maker Symbio. Symbio is a joint venture between Faurecia and Michelin.
ABC Technologies will acquire WMG Technologies for $165M, closing the deal in the first quarter of 2023.
SK Innovation has signed a letter of intent with SungEel HiTech to start a battery recycling joint venture in South Korea.
Aptiv completed its acquisition of cloud software provider Wind River with the price dropping from $4.3B to $3.5B. Aptiv is pivoting to provide software-defined vehicles and architectures.
In addition to suspending production there for the rest of this month, Tesla will run a reduced production schedule at its plant in Shangai, China, during January. The automaker will produce EVs from January 3 → 19 and stop all output from January 20 → 31 for an extended break for the Chinese New Year.
Toyota's global production rose 1.5% to a record 833k vehicles in November. US production slid 3.3% (266k), while elsewhere output gained 3.8% (567k).
The US Treasury issued guidance enabling IRA tax credits for leased vehicles. The decision allows for vehicles assembled outside of North America to qualify. The move prompted Senator Joe Manchin to call on the Treasury to pause implementation, stating they had made changes based on "the desires of the companies looking for loopholes."
Nio's CEO, William Li, warns that a drop in EV subsidies and global economic decline will impact sales next year. China's subsidies are expected to be phased out before the end of the year.
JD Power and LMC analysts expect annual global auto sales to finish the year with a 1% drop from 2021.
As for 2023?
"We expect 2023 to carry a high level of risk and uncertainty as several markets could be dealing with a recession. Nonetheless, we forecast a 6% increase to 85.7 million units. This is up slightly from last month, as the current pullback in China is sooner than initially expected, raising the outlook for next year slightly. There remains a high level of risk related to a weaker global economy and affordability concerns in many markets. Factoring risk could bring the forecast down by as much as 2 million units to 83.5 million units for the year." - Jeff Schuster, president, global forecasts, LMC Automotive
As supply chain uncertainty continues, companies are making a concerted effort to cut their reliance on Chinese suppliers.