ARC Automotive Wants To Do This The Hard Way And Rejects NHTSA Probe

Good morning! It’s Wednesday, June 21, 2023 and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

The Rimac Nevera Is the World’s Fastest Electric Car

1st Gear: ARC Ain’t Playing Ball

At the end of May, the National Highway Traffic Safety Administration ordered ARC Automotive to answer questions about airbag inflators that the regulatory body concluded were “tentatively defective.” ARC was supposed to respond to this request by June 14. The company, in essence, told the NHTSA to go pound sand. Courtesy Automotive News:

The company stated that it “strongly disagrees with the agency’s ‘tentative conclusion’ that a safety defect exists” in the subject driver and passenger inflators — 11 million of which were manufactured by Autoliv-acquired Delphi under a licensing agreement with ARC, which made the remainder.

At least nine incidents globally — seven in the U.S. — of ruptured airbag inflators have been identified in NHTSA’s still-open investigation of ARC. Of those, dating from 2009 to as recently as March, seven injuries and two deaths have been reported.

According to Auto News’ story, ARC’s position is that the injurious airbags in those specific accidents were defective due to welding-related “one-off manufacturing anomalies” that have long since been corrected in subsequent manufacturer recalls. Naturally, the NHTSA wanted to know how many affected units are out in the public that ARC believes could rupture. The company answered that its fix for the aforementioned “anomalies” may not be perfect, and that no production process can be:

In its response, ARC said it “did not design and manufacture its inflators with an expectation that some would occasionally experience a field rupture. ARC recognizes, however, that even with appropriate industry standards … and efforts by manufacturers to minimize the risks of failures, the manufacturing processes may not completely eliminate the risk of occasional or isolated failures.”

Additionally, the supplier said its customers, automakers and NHTSA “have been informed that there have been unexplained field ruptures, and, as the case law recognizes and all manufacturers are aware, the risk of manufacturing anomalies cannot be completely ruled out in any mass production process.”

Fair enough; but that is, of course, what recalls are for. ARC believes it shouldn’t be subjected to those either. The company seems willing to drag this one out as long as possible, which it is able to do because the NHTSA, like so many government entities, only has authority if the negligent actor in question believes it should. We still don’t know precisely which makes and models sounded alarm bells for the NHTSA, which hampers owners’ ability to replace their potentially unsafe cars as well. It’s an awful situation all around. An NHTSA spokesperson said the company’s latest communication is currently being processed for sensitive information, and a public version will eventually be released after that’s done.

2nd Gear: Tesla Gets Texas’ Support In Charging Subsidies

Tesla is quite fond of Texas, given the company’s recent construction and move there, and the same is true the other way around. Texas has demonstrated this with a recent decision in the state that it will only give allotted federal dollars to subsidize charging stations that include Tesla’s proprietary port, also known as the North American Charging Standard. You know, the one that General Motors, Ford, and Rivian have adopted, and it’s likely also Hyundai and Stellantis will too. From Reuters:

Tesla scored a series of victories for its charging technology on Tuesday, capped by Texas saying it would require electric vehicle charging companies to include both Tesla’s standard as well as the nationally recognized CCS if they want to be part of a state program to electrify highways using federal dollars. […]

Texas – home to Tesla’s headquarters and a new car factory complex – is the first state that will mandate Tesla’s charging technology, giving a boost to CEO Elon Musk’s hope of making it the national charging standard.

“The decision by Ford, GM, and now Rivian to adopt NACS changed requirements for Phase 1″ of the rollout, the Texas Department of Transportation said in an email to Reuters on Tuesday, adding that it would require direct current fast chargers to have one CCS and one North American Charging Standard (NACS) connector.

Texas’s decision will put a ton of pressure on other states to adopt Tesla’s NACS, said Lew Cox, director of business development at MD7, which helps companies deploy chargers.

“It’ll effectively make an NACS the new charging standard,” Cox said.

NACS has of course picked up a ton of momentum in recent weeks, convincing many analysts and enthusiasts that the dominoes will only continue to fall and it’s merely a matter of time before Tesla’s becomes the new charging standard on this side of the pond. And yet, this is all still happening so damn fast.

3rd Gear: Mazda And Panasonic

Mazda, a company that’s started to dip its toes in EV production, wants to turn to Panasonic to supply its vehicles with batteries in the coming years. The two firms aren’t strangers to each other — they collaborated on a Japanese-market Demio 11 years ago. But that was a very limited-production trial, and Mazda’s got bigger ambitions now. From Reuters:

Japanese automaker Mazda Motor and the energy unit of Panasonic Holdings will start talks to set up a battery supply partnership for electric vehicles (EVs), the companies said on Wednesday.

Such an effort on lithium-ion batteries is likely to carry Mazda a step closer to ramping up production of EVs, in a 1.5-trillion-yen ($10.6-billion) spending plan it unveiled in November to drive electrification of vehicles.

In the partnership, Panasonic Energy would supply Mazda with automotive cylindrical lithium-ion batteries made in Japan and North America for Mazda EVs expected to be rolled out in the latter half of this decade, the companies said in a statement.

A Mazda spokesperson declined to say exactly what battery cells the Hiroshima-based automaker was planning to use in its EVs, adding that it would hold talks with an eye to secure supply from 2025-2027 onwards or later.

As such, we won’t see this potential partnership bear out for a few more years. Panasonic made a killing on its early work with Tesla and can now spread its wings to help the rest of the industry electrify its fleets.

4th Gear: German Automakers Slammed For Business In Xinjiang

China has detained more than a million Uyghurs and other Muslim ethnic minorities in its Xinjiang province, which happens to be where several German auto brands — BMW, Mercedes-Benz and Volkswagen — either run plants or work with suppliers that do. All three have now been challenged by the European Center for Constitutional and Human Rights for failing to carry out due diligence in their dealings there, to ensure forced labor isn’t happening at any facilities they’re associated with. One last time, per Reuters:

Volkswagen said it was surprised by the allegations and was examining the complaint.

Mercedes-Benz said it has not yet received the complaint and has no direct operations in the region. “We are in contact with our suppliers and whenever concerns are raised, we push suppliers for clarification,” it added.

BMW said it had not received the complaint, but that it holds its suppliers to social and environmental standards, including requiring they take preventative measures as required by law.

Since January 1, 2023, companies in Germany above a certain size must establish due diligence procedures, including an annual risk analysis, that prevent human rights and environmental abuses within their global supply chains. […]

While BMW and Mercedes-Benz do not have their own plants in Xinjiang, researchers at Sheffield Hallam University and others have documented links between the carmakers’ suppliers and companies with operations in or near the region.

Volkswagen has a plant in Xinjiang’s capital which does not produce vehicles but runs quality checks on cars for sale in the region.

VW used to build cars at the facility, but stopped doing that in March. It was around that time that Ralf Brandstätter, CEO of the marque’s passenger cars, toured the factory and famously declared everything was chill because he asked a few floor workers questions.

Reverse: The Original One Was Also Called The ‘Chicago Wheel’

It was on this day in 1893 — 130 years ago — that George Washington Gale Ferris Jr. debuted his wheel at the World’s Columbian Exposition in Chicago.

Neutral: It’s Good To Be Back

It’s been a minute. How’s it going? Last weekend I helped my brother move house. Today I’m drinking liters of water for impending bloodwork. I feel vigorous! This weekend I’m flying to Wisconsin for a wedding.