The auto industry is highly globalized. The Toyota, Tesla, Honda, Ford, Chevy or Hyundai you drive daily likely has parts manufactured across continents. This diverse supply chain helps automakers reduce costs and access expertise. But it's also vulnerable to any form of disruption, like tariffs, geopolitical tensions and what we're seeing this week: the dockworkers strike.
Welcome back to Critical Materials, your daily round-up of news and events shaping up the world of electric cars, software defined vehicles and autonomous tech.
In other news, Kia plans to sell its futuristic-looking electric vans in Japan, where Hyundai Motor Group has struggled to capture even a tiny fraction of a market long dominated by homegrown behemoths. Meanwhile, Chinese automaker Xpeng has several options to tackle the European Union tariffs.
30%: European Automakers Most At Risk From Dockworkers Strike
Automakers selling cars in the U.S. rely heavily on shipments arriving at the East and Gulf Coast ports. But the workers at these shipping ports are now on strike. It's their first big strike in nearly half a century, and Reuters has broken down how that could be detrimental to the economy and particularly to the auto industry.
The 45,000 port workers who went on strike this week are part of the International Longshoremen's Association union that is negotiating with the United States Maritime Alliance employer group for better wages and some assurance against automation impacting human jobs.
Experts say a few days of striking won't have huge impacts on the auto industry. But if it stretches up to a week or beyond, then automakers could feel the squeeze. That means fewer cars arriving at dealerships, fewer parts getting delivered for repair and maintenance and longer waiting times for consumers.
The strike could impact European carmakers for both exports and imports. Some experts went as far as calling this strike a "tragedy."
Here's more from Reuters:
"If (the strike) turns into weeks, it's going to be a tragedy," said Steve Hughes, CEO of HCS International, which advises the auto sector on shipping issues.
European automakers, many of which use the ports on strike, would be the most affected, Levy said in a research note.
"The European (automakers) lean heavily on Baltimore for imports and Southeastern ports (i.e. Charleston) for exports, as most of their U.S. production exposure is in this region," he said.
The news wire reported on Wednesday that BMW, Volkswagen and Volvo are all closely monitoring the situation as those premium brands rely heavily on shipments arriving from Europe. The strike might affect General Motors and Ford too, but less so compared to their European rivals.
In fact, GM and Ford vehicle imports are mostly routed through rail and truck from Canada and Mexico. So they may even stand to benefit from the strike as it can ease the pricing pressure if supply doesn't match demand and if more buyers looking at European EVs turn towards American carmakers.
Either way, if the strike continues, it would impact the record EV sales projection for 2024. Some automakers like GM and Hyundai Motor Group already reported a banger third quarter for EV sales. A prolonged strike could skew their production and sales targets for the remainder of the year.
60%: Kia Commercial EVs To Enter Japan
Hyundai Motor Group has struggled for decades to penetrate the Japanese car market, which is dominated by Japanese giants like Toyota and Honda. According to Automotive News, Kia hasn't sold cars in Japan since 1990. Hyundai only reentered that market in 2022 after an unsuccessful stint in the aughts that forced it to pull out in 2009.
But remember the super cool commercial EVs that Kia revealed at the Consumer Electronics Show in January? Kia calls them Platform Beyond Vehicle (PBV) models and those EVs, according to the brand, might be successful in Japan.
Kia will start its Japanese onslaught with the PV5 in 2026, followed by PV7 and more models later in the decade. It will partner with Tokyo-based trading company Sojitz Corporation for distribution.
They won't ride on the E-GMP platform that HMG's passenger EVs use. They will ride on a dedicated commercial EV platform instead that allows bidirectional charging, DC fast charging at up to 150 kilowatts for a 10 to 80% charge in 30 minutes and an estimated battery capacity of 80-100 kilowatt-hours.
Whoever purchases the Kia PBVs will have access to a high degree of customization, like various seating layouts, luggage compartment shapes, door options, battery capacities and more.
Rivian proved with its Amazon EDVs that delivery drivers deserve to have a better day at work with spacious, feature-rich cabins and also look cool while doing so. Other automakers seem to agree and are now offering their versions of what they think are cool, modern and futuristic electric vans.
90%: Xpeng Won't Back Down In Europe
Just like BYD, Geely and SAIC, Xpeng has big plans to expand its electric car business in Europe. Despite the looming tariffs on Chinese-made electric car imports, Xpeng won't back down.
The Guangzhou-based automaker that Volkswagen has a 5% stake in, plans to have several options on the table to sidestep the EU tariffs.
Here's more from Bloomberg:
“We’re looking at multiple options, ranging from contract manufacturing to working with existing plants, or even thinking about [new] plants,” Vice Chairman and Co-President Brian Gu said in a Bloomberg TV interview from Berlin on Wednesday. “But those are still very preliminary.”
EU members will vote on Friday to finalize the definitive tariffs on Chinese EVs—as high as 45%. The only way the tariffs don't come into effect is if 65% of the member states, or about 15 countries, vote against the tariffs.
The price war in China is forcing many local players to expand overseas. While that puts automakers at risk as geopolitical tensions remain high, it can ultimately be good news for consumers. If Chinese automakers do expand with European or North American plans, the increased competition should ultimately benefit consumers.
100%: Is The Strike A Wake-Up Call To Localize Production?
If the dockworkers' strike goes on for a while, it could be a real test of the resilience of America's auto industry, which is already undergoing a massive disruption amid the bumpy rise of electric cars.
Is this another major sign for U.S. automakers to bring production home and localize supply chains even further to develop flexibility and immunity to sudden disruptions? Leave your thoughts in the comments.
Contact the author: suvrat.kothari@insideevs.com
