Electric car rules could cost carmakers billions
The European Automobile Manufacturers Association (ACEA) has warned that new Brexit trade rules related to electric vehicles (EVs) could cost European manufacturers £3.75 billion over the next three years and reduce EU factory output by 480,000 vehicles. These rules, known as “rules of origin,” are set to come into force in January and are intended to ensure that EU-produced electric cars predominantly use locally sourced parts. However, the main issue is that EVs will need to have batteries produced in either the UK or the EU to meet these criteria, or face 10% tariffs during cross-Channel transportation. As battery production in Europe has not scaled up as rapidly as expected, carmakers are unprepared to meet these requirements, creating challenges for manufacturers on both sides of the Channel.
The impact of these rules extends to the cost and pricing of EVs. The potential imposition of steep tariffs could make electric cars more expensive to produce, subsequently raising prices for consumers. The ACEA is advocating for a three-year delay in implementing these rules and is urging the European Commission to take action. Manufacturers are particularly concerned because the UK is their largest export market, with a significant number of vehicles arriving at UK ports last year, and many cars built in the UK being transported to the EU.
The outcome hinges on an agreement between the UK and the EU, but while the UK’s Business Secretary expressed optimism, the EU’s internal market commissioner suggested reluctance to reopen the Brexit deal for the automotive industry. Trade officials from both sides are scheduled to meet, though it’s uncertain if the EV rules will be on the agenda. The situation underscores the challenges posed by complex regulatory changes in an already intricate global supply chain, with potential repercussions for EV affordability and availability.
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Chinese and Russian Aluminum Groups Sign Trade Deal
China and Russia are looking to strengthen cooperation across the aluminum supply chain as their economic ties deepen following Russia’s invasion of Ukraine. The China Nonferrous Metals Industry Association (CNIA) signed a memorandum of understanding with the Russian Aluminium Association to collaborate more closely on alumina, aluminum fabrication, and aluminum products. Although Western nations have not imposed direct sanctions on buying Russian aluminum, some buyers and banks have avoided the trade due to ethical concerns and logistical complexities. This has resulted in increased volumes of Russian aluminum heading to China.
Russia has increasingly turned to China as a market for its energy and commodities, including alumina. Russian aluminum producer United Co. Rusal International PJSC has been inviting Chinese firms to invest in an aluminum industrial park in eastern Russia. Rusal reported that it generated 33% of its revenues from Asia in the first half of 2023, up from 26% in the same period in 2021, prior to the Ukraine conflict.
Chinese imports of Russian aluminum reached a record 131,000 tons in August, steadily increasing since Russia’s invasion of Ukraine in 2022. While these flows are growing, they are still relatively small compared to China’s massive domestic aluminum production of around 3 million tons per month. This memorandum of understanding reflects the evolving dynamics in global supply chains as nations seek to secure resources and trading partners in a changing geopolitical landscape.
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Walmart partners with SmartKargo for faster transit times
Walmart GoLocal, the retailer’s delivery-as-a-service platform, is partnering with air cargo technology and logistics solutions company SmartKargo to expand its delivery capabilities for retailers and e-commerce companies. SmartKargo’s cloud-based platform offers air cargo services that enable fast deliveries, with over 2,500 daily flights across the U.S. to move packages coast-to-coast in two days or even next-day delivery without the need for multiple distribution centers.
SmartKargo’s technology platform is integrated with Walmart’s GoLocal delivery network. This partnership allows organizations to provide next- and two-day time and transit across the country, leveraging Walmart GoLocal’s local delivery solutions and retail and logistics expertise. Walmart GoLocal was initially launched in 2021 as a white-label delivery service to diversify Walmart’s revenue streams and expand its fulfillment capabilities and supply chain offerings. Since then, it has made over 1 million deliveries, added thousands of new service pick-up points, and attracted retail clients like The Home Depot.
By partnering with SmartKargo and other companies like Books-A-Million, Walmart GoLocal aims to scale up its delivery capacity and plans to involve more employees in last-mile deliveries, as most of its deliveries are currently handled by independent contractors. This expansion represents Walmart’s efforts to strengthen its e-commerce and delivery capabilities, potentially impacting the broader supply chain as it seeks to compete in the growing e-commerce market.
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- Source: https://www.allthingssupplychain.com/supply-chain-weekly-wrap-up-09-22-2023-09-28-2023/?utm_source=rss&utm_medium=rss&utm_campaign=supply-chain-weekly-wrap-up-09-22-2023-09-28-2023
