January 18, 2022

Volume XII, Number 18

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November 9, 2021: Foley Weekly Automotive Report

This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities.

Key Developments

  • U.S. new light-vehicle sales in October reached an estimated SAAR of 13 million units to 13.1 million units, representing an increase from September 2021, but a decline of over 20% year-over-year.

  • U.S. fleet sales reached an estimated 1.39 million units for January – October, 42% lower than for the same period in 2019 and just 1% higher compared to the same period in 2020.

  • New analysis from IHS Markit addresses concerns over the stability of magnesium supplies, which have recently experienced significant price increases.

  • The U.S. House of Representatives approved a bipartisan $1.2 trillion infrastructure bill that is expected to be signed by President Biden.

  • The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) released the Emergency Temporary Standard (ETS) pertaining to COVID-19 vaccination requirements for large private employers. Subsequently, a federal appeals court in New Orleans temporarily stayed the regulation in order to pursue additional briefing on the matter [This topic continues to evolve].

  • Ford will require the majority of its U.S. salaried workforce to be fully vaccinated against COVID-19 by December 8.

  • Autonomous truck companies EinrideGatik and TuSimplerecently announced updates involving collaborations with GE AppliancesWalmart, and UPS, respectively.

  • Electric vehicles and low emissions technology:

    • Rivian raised its IPO price range according to an updated filing, and it now reflects a potential valuation of approximately $65 billion.

    • GM will stop production of the Chevrolet Bolt at its Orion Assembly Plant in Michigan for three weeks beginning November 15.

    • The U.S. Department of Energy provided $128 million to Daimler Trucks North America, Ford Motor Co., General Motors, Paccar Inc. and Volvo Group North America as part of its SuperTruck 3 initiative to advance electrified truck technologies.

    • The Illinois legislature recently passed a number of tax incentives for EV manufacturers as part of House Bill 1769.

Market Trends and Regulatory

  • The Michigan Department of Environment, Great Lakes and Energy issued a third air quality violation notice for Stellantis’ new Jeep assembly plant in Detroit. The automaker intends to install new equipment to repair the violation by year-end.

  • U.S. borders have reopened to fully vaccinated noncitizen travelers; more detail on requirements can be found via the State Department.

OEMs/Suppliers

  • Toyota reported a 33% increase to net income for the July – September period, and raised its full-year operating profit forecast by approximately 12% to 2.8 trillion yen for the fiscal year ending March 31, 2022.

  • Honda reported a 31% drop in its fiscal second quarter profit, and lowered its full-year profit forecast from $5.9 billion to $4.9 billion for its fiscal year ending March 31, 2022.The revision is due to the effects of the ongoing chip shortage, as well as rising material costs.

  • GM will invest over $46 million to upgrade its metal stamping plant in Parma, Ohio in order to support future vehicle programs.

  • DuPont plans to acquire engineering materials maker Rogers Corp. for approximately $5.2 billion, to assist with growth opportunities in advanced auto electronics and electric vehicles.

Connected/Autonomous Vehicles and Mobility Services

  • Autonomous delivery vehicle developer Nuro raised $600 million in a Series D funding round from investors including Tiger Global Management and Kroger.

  • Alphabet’s self-driving unit, Waymo, will use lidar-equipped vehicles to start mapping New York City. Waymo has not announced plans to test or launch autonomous vehicles commercially in the city.

  • Waymo named Arezoo Riahi as its first director of diversity, equity and inclusion. Riahi was most recently with Autodesk.

Electric Vehicles and Low Emissions Technology

  • Tesla and Hertz are reported to be discussing the timetable for fulfilling the rental car company’s recent bulk order of 100,000 Tesla Model 3 sedans, which CEO Elon Musk indicated were not part of a formal deal.

  • Nikola Corp. has set aside $125 million, and may seek reimbursement from its founder, for a potential settlement with the U.S. Securities and Exchange Commission over fraud allegations.

  • The Department of Justice has opened an investigation into EV startup Workhorse, according to The Wall Street Journal. The company was previously reported to be under investigation by the Securities and Exchange Commission.

  • Fisker Incformed a battery supply deal with Chinese battery maker Contemporary Amperex Technology Co. Ltd (CATL) for its flagship model, the Fisker Ocean SUV.

  • Tesla issued a recall affecting nearly 12,000 vehicles to address false collision warnings resulting in unnecessary automated emergency braking in vehicles operating its Full Self-Driving Beta software.

Prepared by Julie Dautermann, Competitive Intelligence Analyst

© 2022 Foley & Lardner LLPNational Law Review, Volume XI, Number 313
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About this Author

John R. Trentacosta, Foley Lardner, Automotive Industry Attorney, Supply Chain Lawyer
Partner

John R. Trentacosta is a partner and transactional lawyer with Foley & Lardner LLP. Mr. Trentacosta is actively involved in drafting contracts commonly used in the automotive industry. He frequently represents clients in supply chain disputes, particularly automotive and supplier-manufacturer disputes. He is the chair of the firm’s Complex Supply Chain Litigation Group, former chair of the Detroit Litigation Department and founder and member of the firm’s Automotive and Manufacturing Industry Teams. He also is a member of the Commercial Transactions & Business...

313-234-7124
Ann Marie Uetz Foley Lardner Debtor Representation Bankruptcy Lawyer Foley Lardner Detroit
Partner

Ann Marie Uetz is a partner and trial attorney with Foley & Lardner LLP, where she represents clients in a variety of industries in all aspects of their contracts and business disputes. She also represents debtors, creditors and secured and unsecured lenders in all facets of restructuring. Ms. Uetz focuses her practice on business litigation and bankruptcy, two of Foley’s practice areas recently ranked by U.S. News—Best Lawyers® as “national First-Tier” practices in recognition of excellence in client service.

Ann Marie heads Foley’s Coronavirus Task Force and...

313-234-7114
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