Michigan, the cradle of the American automotive industry, has made no secret of its desire to remain an industry leader in mobility as the industry continues to evolve. On May 30, 2018, Michigan announced a new $8 Million Michigan Mobility Challenge grant that would be available to fund new mobility projects across the state. The “mobility industry” is a term of art, the exact definition of which often depends on who is being asked. Generally speaking, the term is used to refer to a variety of products and services involved in the business of how people get around, including everything from traditional automotive manufacturers, to ride hailing apps, to autonomous public transportation.
Trade issues have been concerning the automotive industry for some time. Whether it be NAFTA renegotiations (or NAFTA scrapping), Section 232 Tariffs, Exceptions to Section 232 Tariffs, ever since the current administration was elected, the Dashboard has been predicting that trade issues could upend the automotive industry. That day appears to have come as the latest round of tariffs on China include those aimed at autos and parts. China’s retaliation was swift. And, it specifically targeted (among other things) light vehicles from the U.S.
Fully connected and self-driving cars are here. Improvements to alternative energy sources for vehicles continue to advance at a rapid pace. The automotive industry is potentially facing dramatic new legal and regulatory challenges. And the road ahead shows no signs of slowing down.
According to a report by JLT Specialty, the automotive industry “was the most disrupted sector in 2017” with an increase in supply chain disruptions by 30 percent over 2016. The JLT report identified the top five supply chain events as:
- Factory Fires or Explosions
- Mergers and Acquisitions
- Hurricanes, Typhoons, Cyclones
- Business Sales or Spin-offs
- Labor Strike or Disruptions
In 2017, for the first time ever, Norway registered more electric and hybrid vehicles than traditional vehicles with internal combustion engines. Even in the United States, as of May Tesla’s Model 3 became the best selling vehicle in its segment, regardless of powertrain, beating out traditional stalwarts from the traditional German luxury marques. However, with all of the incentives surrounding EVs, it is important to take stock in the externalities driving consumers toward larger-scale EV adoption. The following is a list of some perks (“carrots”) and punishments (“sticks”) being implemented to encourage this shift.