This information that follows is taken from sources including The Car Connection, Autoweek, Green Car Reports, and other industry sources.
Our advisors are pleased to assist you or your clients. Please do not hesitate to contact us if you require assistance.
Curb On Rare Earth Exports - More Disruptive Than Microchip Shortage
Restrictions on Chinese exports of rare earth minerals and
magnets used in a variety of automotive parts are threatening to
create the industry's next major crisis. Automakers and
suppliers around the globe are scrambling to mitigate the
restrictions, which could lead to shortages of key components found
in everything from electric vehicle motors to alternators to power
windows. China produces a vast majority of rare earths but curbed
their flow out of the country amid an ongoing trade war with the
U.S. Already, some automakers and suppliers have had to idle
assembly lines because of a lack of parts. Trade groups and
industry executives are sounding the alarm about the potential for
more imminent shutdowns to create bottlenecks even worse than what
the industry grappled with during the microchip shortage.
"You're going to find things at least partially comprised
of rare earth metals in not just vehicles, but almost all consumer
products," Sam Abuelsamid, vice president of market research
at Telemetry, told Automotive News. "So many components rely
on them — solenoids for your engine, solenoids for your power
steering. If we can't get rare earth metals, then we're in
big, big trouble."
Source: Automotive News
Hyundai Motor Has A Rare Earths Stockpile That Can Last About A Year
Hyundai Motor has a rare earths stockpile that can last about a
year, and it does not expect any near-term impact from global
supply chain disruptions caused by China's export curbs, said a
person who attended a company investor call. China's decision
in April to restrict exports of a wide range of rare earths and
related magnets has tripped up the supply chains central to
automakers, aerospace manufacturers, semiconductor companies and
military contractors around the world. The stockpiling by Hyundai,
the world's No.3 automaker along with its affiliate Kia Corp
indicates it is better-placed than many competitors to withstand
restrictions that have already impacted production or the supplier
network of companies including Ford and BMW.
Source: Reuters
China's Rare-earth Export Restrictions Threaten New-car Production
China's restriction on exports of rare earths and magnets
threatens to shut down vehicle and parts assembly in the coming
weeks, industry executives and analysts said. The materials are
crucial for a wide range of automotive components — from
motors and sensors used in electric vehicles to automatic
transmissions and speakers. The auto industry, like other sectors,
is heavily reliant on China for the rare earths and magnets used in
those parts, and companies have said securing the materials has
become exceptionally difficult since China restricted exports in
April in response to U.S. tariffs. The auto industry, already
grappling with other tariff impacts, is now on the brink of its
third major supply chain shock this decade, following the pandemic
and the microchip shortage.
Source: Automotive News
18 To 34 Demographic Challenges
The automotive market is facing a troubling decline in new
vehicle purchases among the highly sought-after 18 to 34 age
demographic. Considered a vital growth segment for original
equipment manufacturers, this group is now facing unprecedented
market conditions that impact their status as key players for new
vehicles. Affordability remains a major concern for young adults,
as new vehicle prices climb, and monthly payments have increased by
30% in the past four years. The share of new vehicle registrations
by adults aged 18-34 has fallen from 12% in Q1 2021 to below 10% in
the past two quarters—a troubling trend.
Source: CBT News/S&P Global
Tariff Impacts Now Appearing
Tariff Impacts Begin as Vehicle Shipping Volume Drops by More Than 70%
The volume of cars getting shipped to the U.S. via sea routes has
plunged as a result of President Donald Trump's tariffs on
imported vehicles. Maritime import volume for motor vehicles
dropped by 72.3 percent in May compared with the same month a year
earlier, according to Descartes Datamyne, a trade database.
Importers shipped about 9,380 fewer 20-foot equivalent units of
vehicles to the U.S. last month. One 20-foot equivalent unit is
about one vehicle depending on its size, according to Descartes.
The precipitous drop indicates that vehicle tariffs are having a
concrete impact on automaker decisions. The 25 percent auto tariffs
that took effect in April may have prompted companies shipping
completed automobiles overseas to hold off, betting that Trump will
eventually pull back the most punishing duties.
Source: Automotive News
Edmunds Data Reveals Tariff Fears Shift Car Buyer Behavior
Tariff speculation is influencing the behavior of American car
shoppers as the renewed push for tariffs under the Trump
administration creates uncertainty for both shoppers and dealers. A
recent survey and market data by Edmunds reveal that consumers are
either accelerating or delaying their vehicle purchases even before
widespread price hikes take effect. So far, the impact of tariffs
hasn't been as significant as expected. Despite concerns, the
average transaction price (ATP) of new vehicles remained stable and
aligned with seasonal norms. In April, ATP reached $48,422,
representing a 2.7% uptick from March and a 2.2% year-over-year
increase. Chief Economist for the National Automobile Dealers
Association (NADA), Patrick Manzi, believes that the actual impact
of the auto tariffs won't be fully felt until 2026.
Source: CBT News
New Hybrid Scorecard Slams Carmakers For Loading On Luxury
It's long been known that hybrid buyers often choose them over luxury cars, and aren't buying them solely for the payback in gasoline savings. But a new Hybrid Scorecard, launched by the Union of Concerned Scientists, slams carmakers for inflating their prices by loading luxury into fuel-efficient hybrids, putting them out of reach to less affluent buyers. The Hybrid Scorecard is a guide to all 31 currently available hybrid vehicles from five carmakers: Toyota, Ford, General Motors, Honda, and Nissan. It includes ratings on different criteria and an explanation of UCS's methodology in calculating its scores.
"Hybrids don't have to be luxury vehicles," said
UCS analyst Don Anair, who supervises the guide. "They should
be within the reach of all Americans." Car buyers
shouldn't be forced," he continued, "to buy high-end
bells and whistles when fuel economy and reducing emissions are
their top priority." Such "unnecessary luxury
features" include, according to UCS, not only DVD players and
keyless entry systems but even leather interiors.
The top-scoring hybrid this year is the 2010 Toyota Prius, followed
by a three-way tie among the 2010 Honda Civic Hybrid, the 2010 Ford
Fusion Hybrid, and its twin the 2010 Mercury Milan Hybrid. One
reason the 2010 Prius outscored the second-place finishers is that
it has fewer "forced features" (roughly $1,600 worth)
than the Civic Hybrid and Fusion/Milan twins, which UCS says
include $3,000 and $4,000 of unnecessary embellishments
respectively.
Not surprisingly, the 2010 Lexus LS 600h L full-size luxury sedan
hybrid is the "worst offender," with $17,000 of
"forced features" over the base non-hybrid LS 460L
model.
Automakers might argue that buyers' willingness to pay higher
margins for added features offsets the cost of $3,000-plus for the
hybrid hardware, improving the affordability of the overall
package. In the end, buyers will decide for themselves. In our
view, the more information, the better.
Source: Green Car Reports
Ford Of Canada CEO Says Ev Mandate Should Be Repealed
Ford Canada CEO Bev Goodman has publicly called for the repeal
of a federal policy that requires 100 percent of new passenger
vehicle sales to be zero-emission by 2035. The mandate also
includes an interim benchmark of 60 percent EV models by 2030, a
pace Goodman describes as unrealistic given conditions. Ford, like
several other legacy automakers, has previously supported
electrification efforts through products like the Mustang Mach-E
and F-150 Lightning, as well as investments in battery and electric
vehicle production. However, according to Goodman, Canada's
mandated electric vehicle targets do not reflect consumer demand or
infrastructure readiness. "The targets on full
battery-electric vehicles need to be aligned with what customers
want, and customers have spoken," Goodman said at the recent
Canada Automotive Summit, per Automotive News. According to the
company CEO, Ford Canada's electric vehicle sales fell
"like a stone" following the end of a $5,000 federal
incentive program earlier this year. Automotive News reports that
nationwide zero-emission vehicle sales fell to 20,878 units in
February and March, a 44-percent decline year-over-year.
As GM Authority covered previously, General Motors electric vehicle
sales have also nosedived in Canada as a result of the end of the
incentive program. "Ultimately, it will have a negative
impact, if these mandates stuck, on the industry," Goodman
said. "It will have downward pressure on vehicle sales, it
will have upward pressure on pricing, and those are real concerns
for consumers and the industry as a whole."
Meanwhile, in the U.S. market, GM has announced that Chevy has
officially overtaken Ford in electric vehicle sales, with Chevrolet
posting over 37,000 electric vehicles sold in the U.S. market for
the 2025 calendar year through May, as compared to Ford's
34,000 units during the same time period. GM has also claimed the
number-two spot among all electric vehicle manufacturers
nationwide, with more than 62,000 electric vehicles sold
year-to-date. Tesla remains the number-one electric vehicle
manufacturer in the U.S. market.
Source: GM Authority
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
