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2021
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Foley Weekly Automotive Report – July 2021 | Foley & Lardner LLP

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 June reached a SAAR of 15.4 million units, representing a decline of 1.7 million units from May and the lowest SAAR since August 2020.
  • 2021 U.S. new light vehicle sales are forecast in the range of 16.3 million to 16.9 million by the National Automobile Dealers Association, Cox Automotive and LMC Automotive.
  • U.S. fleet sales were up by 5% for January – June, compared to the same period last year, but were 40.5% lower than for the same period in 2019, according to Cox Automotive.
  • New light vehicle inventory fell from an estimated 2.7 million vehicles nationwide in January to 1.4 million in June.
  • IHS Markit estimates that semiconductor capacity will begin to have the ability to adequately meet demand and fill missing backlog starting in the first quarter of 2022.
  • Ford will cut production at eight North American plants over various weeks in July and August as a result of the chip shortage; the automaker has lost production of over 350,000 vehicles this year, according to estimates from LMC Automotive.
  • Toyota’s second quarter sales volume surpassed GM’s for the first time in the U.S. The achievement is described as a short-term event attributed to Toyota’s decision to build a four-month supply of key components such as semiconductors.
  • A COVID-19 Task Force comprised of the UAW, Ford, General Motors and Stellantis announced mask requirements ended July 12 for fully vaccinated union-represented workers in the U.S.
  • A new report from cybersecurity ratings provider Black Kite found that nearly half of 100 automakers and over 17% of suppliers surveyed are at high risk for ransomware attack. Key areas of vulnerability include patch management, with 71% of surveyed companies having “F” or “poor” ratings.
  • Electric vehicles and low emissions technology:
    • Stellantis will invest over 30 billion euros through 2025 in electrification and software, and low emissions vehicles are intended to represent over 70% of sales in Europe and 40% of sales in the U.S. by the end of the decade.
    • According to estimates from the Department of Energy, the U.S. will need 600,000 Level 2 public chargers by 2030 to meet demand, up from the 41,000 available currently. Tesla, EVgo, Chargepoint and Electrify America are among the companies offering Level 3, or DC Fast Charging.
    • As part of its new Alliance Strategic Partner framework, Nissan will compensate a portion of its suppliers’ costs if a jointly developed EV part is not adopted; the decision is intended to strengthen collaborative relationships and share cost burdens.

Market Trends and Regulatory

  • U.S. new light vehicle sales in June reached 1.3 million units, for a seasonally adjusted annualized rate of sales of 15.4 million units. June’s results fell short of expectations for a SAAR of 15.8 million to 16.4 million units. Total sales in June were up