GM to invests over $1B in EV battery production
General Motors (GM) and POSCO are expanding the production of cathode active materials at their joint venture facility in Quebec to support the automaker’s Ultium electric vehicle (EV) platform. This move aims to establish a more secure and sustainable supply chain for GM’s growing EV production needs. The joint venture will also integrate precursor materials production for CAM. By producing these materials locally, GM reduces its reliance on overseas suppliers, particularly in Asia where most CAM processing currently takes place.
GM plans to have 160GWh of EV battery capacity across four North American plants by 2025. The company is also investing $2.3 billion in its Spring Hill factory in Tennessee for battery production. These initiatives align with the US goal of achieving energy independence, supported by the Bipartisan Infrastructure Law’s $7 billion funding to help domestic automakers secure critical EV battery components.
The expansion of CAM production and the establishment of a larger raw material supply chain in the US will positively impact the EV supply chain. It will enhance availability, reduce dependence on overseas suppliers, and contribute to the growth of domestic EV manufacturing capabilities. By localizing production, GM aims to create a more resilient and efficient supply chain to meet the increasing demand for electric vehicles.
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UK & USA announce green funding agreement
UK firms may gain access to US green funding as part of an effort to strengthen economic ties between the UK and the US. The Atlantic Declaration, announced by Rishi Sunak and Joe Biden, aims to boost collaboration on various fronts, including easing trade barriers, closer defense industry ties, data protection, and AI cooperation. As part of the agreement, UK electric car firms may gain access to US green tax credits and subsidies. The declaration also includes plans to mitigate the impact of the US Inflation Reduction Act (IRA) on the UK economy, particularly related to trade in electric vehicle batteries.
The UK and US will work on a new critical minerals agreement that would allow UK companies using critical minerals processed or mined in the UK to access tax credits. Additionally, a “UK-US Data Bridge” will facilitate the transfer of data between certified UK and US organizations without a levy. The Atlantic Declaration will have implications for the supply chain as it aims to enhance economic cooperation and address specific challenges and opportunities. Access to US green funding and tax credits can support the growth of UK electric car firms and contribute to the development of the green economy.
Mitigating barriers related to the IRA can benefit the UK’s export of raw materials for EV batteries and promote the growth of the EV industry. The agreement also signals a commitment to improving supply chain resilience and addressing geopolitical concerns, such as reducing Russia’s involvement in the global civil nuclear market. Overall, the declaration aims to foster a stronger economic future for both countries, create jobs, and drive economic growth.
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China Exports Drop More Than Expected
Chinese exports declined for the first time in three months in May, signaling risks for the world’s second-largest economy amid weakening global demand. Overseas shipments fell by 7.5% compared to the previous year, worse than expected, with significant declines in exports to various destinations including the US, Japan, Southeast Asia, France, and Italy. Imports also contracted by 4.5%. The drop in exports reflects the impact of a slowing global economy on China and raises concerns about growth.
The weak trade data suggests the need for more policy support, such as a potential interest rate cut or reserve requirement ratio reduction for banks. The decline in exports underscores the challenging reality of weakening demand both domestically and internationally. In terms of the supply chain, the decrease in Chinese exports can have significant implications. As global demand weakens, it can disrupt supply chains that rely on Chinese manufacturers and suppliers.
Companies that depend on Chinese exports may face challenges in sourcing products and components, potentially leading to delays or shortages. It also highlights the vulnerability of China’s export-driven economy and the need to diversify supply chains to mitigate risks. The situation emphasizes the importance of resilience and adaptability in supply chain strategies, as well as the potential need for alternative sourcing options and contingency plans.
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