Elm Analytics - Automotive Supply Chain Risk Digest #308 - December 30, 2022 - January 5, 2023

CHANGE IN MANAGEMENT

Internal documents reportedly show Tom Zhu, Tesla's VP of Greater China, is now responsible for North American assembly plant oversite and sales operations. The move puts Zhu in a strategic leadership role at a time when investors have raised concerns over Elon Musk's distraction at Twitter.

CLOSING

Stellantis CEO Carlos Tavares said the company might shutter more plants to manage costs associated with the transition to EVs and inflation.

Continental Carbon closed its carbon black manufacturing plant in Phenix City, Alabama. The state's Department of Environmental Management ordered the closure after the plant failed to make emissions-related upgrades. Carbon black is used in tires, plastics, and coatings.

EARNING DIP

BMW sold 100k fewer vehicles in 2022, 2.4M in total. The company has offset the sales dip with higher prices while bringing BEV sales up to 10% of volume.

While UK car sales were at their lowest levels since 1992, EV sales climbed to 17% of total sales.

INDUSTRY DIRECTIONS

Forvia's CEO, Patrick Kollers, noted that Chinese automakers produce EVs at a $10.6k cost advantage over European automakers.

LMC: The changing North America production landscape

LITIGATION

South Korea's antitrust regulator will fine Tesla $2.2M for a failure to inform its customers about shorter driving ranges in colder temperatures.

MERGERS, VENTURES, ACQUISITIONS

Stellantis announced a partnership with Archer Aviation to produce electric air taxis in the US.

The company is also establishing a new business unit, Mobilisights, to expand its data services business.

Taiwan-based FIT Hon Teng entered an agreement to acquire German automotive wire harness maker PRETTL SWH group.

Nvidia announced wide-ranging partnerships with Mercedes-Benz, Foxconn, Hyundai Motor Group, Polestar, and BYD at CES this week.

BYD and Uzavtosanoat JSC (UzAuto) have signed an agreement to establish a JV to produce BYD's EV and hybrid vehicles in Uzbekistan.

OPENING

Hyundai supplier Ecoplastic Corp. is building a $205M plant in Bulloch County, Georgia. The plant will supply plastic parts to Hyundai's new EV plant currently being constructed near Savannah, Georgia.

PRODUCTION INCREASE

Due to pent-up demand, Hyundai / Kia has forecast a 10% jump in global vehicle sales at 7.52M in 2023.

In a tweet, Tesla stated they'd increased production of the newer 4680 EV cells, enough to equip 1k vehicles per week.

Rivian produced 24.3k vehicles in 2022, nearly hitting its target of 25k.

RAW MATERIALS

Analysts believe Tesla's newest lithium agreement with Piedmont will come with higher costs. Tesla typically locks in key materials prices. This latest agreement is tied to lithium market prices, which have been increasing.

Goodyear is demonstrating a new tire made up of 90% sustainable materials at this year's CES. The tire has passed Goodyear's internal testing and all applicable regulatory testing.

RECALLS

Mercedes recalled 324k vehicles from 2012-2020 due to a problem that can cause the engine to stall while driving. Water can accumulate in the spare tire wheel well and damage the fuel pump control unit.

REGULATION

Italy's Prime Minister Giorgia Meloni spoke out against the EU's proposed 2035 ban on ICE vehicles. "That is not reasonable, and I think there is also a certain alignment by other European countries on our position" - Prime Minister Giorgia Meloni