Toyota and Agri SA celebrate farming sector
Toyota South Africa Motors (TSAM) once again took centre stage in celebrating the resilience, determination and innovation within South Africa’s agricultural sector.
- Industry News
- 25 November 2024
Electric-vehicle batteries and other car parts are the latest products under scrutiny as part of Washington's efforts to stamp out US links to forced labour in Chinese supply chains, according to a document seen by Reuters.
Until now, enforcement of a year-old US law that bans the import of goods made in Xinjiang, China, has focused mainly on solar panels, tomatoes and cotton apparel. But now, components that may include lithium-ion batteries, tyres and major automobile raw materials like aluminium and steel are increasingly subject to detentions at the border.
Increased inspection of products destined for auto assembly plants by US Customs and Border Protection (CBP) could signal difficult times ahead for automakers who will need solid proof that their supply chains are free of links to a region where the US believes Chinese authorities have established labour camps for Uyghurs and other Muslim minority groups.
More than a year of enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) has already stymied development of solar energy projects as detained panel shipments languish in US warehouses. The installation of large solar energy facilities for utilities dropped by 31% last year owing to constrained panel supplies, according to the US Solar Energy Industries Association trade group, which has said conditions have improved somewhat this year.
Both solar energy and battery-powered electric vehicles are critical industries in the Biden administration’s push to wean the US from dependence on fossil fuels and to combat climate change.
When shipments are detained, CBP provides the importer with a list of examples of products from previous reviews and the kind of documentation required to prove they are not made with forced labour, CBP told Reuters.
"The timing of these changes does not reflect any specific changes in strategy or operations," a CBP spokesperson said in a statement, adding that the list of eight product types was "not exhaustive".
The agency did not specifically respond to questions about increased scrutiny of automotive imports. It said its focus "is where there are high risks in US supply chains".
In a report to Congress last month on UFLPA enforcement, CBP listed lithium-ion batteries, tyres, "and other automobile components" among the "potential risk areas" it was monitoring.
The expanded focus is reflected in CBP data, which shows 31 automotive and aerospace shipments have been detained under UFLPA since February of this year.
Though the automotive detentions are small compared to the more than $1 billion of solar panel imports that have stalled at the border, they have put the industry on alert, according to attorneys and supply-chain experts.
"It is a very complex supply chain and obviously a detention would be incredibly disruptive to an auto company," said Dan Solomon, an attorney with Miller & Chevalier who advises manufacturers on potential forced-labour risks.
Of the 13 automakers and suppliers contacted by Reuters, four - Mercedes-Benz USA (MBGn.DE), Volkswagen (VOWG_p.DE), Denso (6902.T) and ZF Friedrichshafen AG (ZFF.UL) - said they had not had products detained under the UFLPA.
"Under the UFLPA, we've further increased our due diligence with global media screening, risk analysis and supplier and buyer training on sustainability and human rights," a Volkswagen spokesperson said in an email.
Ford (F.N), Bosch (ROBG.UL), General Motors (GM.N), Honda (7267.T), Toyota (7203.T), Stellantis (STLAM.MI) and Magna (MG.TO) said in written statements that they were committed to ensuring their supply chains were free of forced labour but did not respond to questions about detainments under UFLPA.
Neither Tesla (TSLA.O) nor Continental AG (CONG.DE) responded to requests for comment.
"If you're a car manufacturer and you have not started mapping your supply chains for the critical minerals and the parts of the sub-assemblies that are going through China and where they are getting their goods from, you are running a real risk as we go into the back half of the year," Exiger CEO Brandon Daniels said in an interview.
Volkswagen Group Africa has added an additional 3 megawatt (MW) solar power to its grid, bringing the total output of renewable energy to 5.9MW. This is enough energy to power at least 2 000 two-bedroom houses fitted with geysers and electrical appliances.
Volvo Car South Africa has cemented itself as a leader in the local electric vehicle segment, with combined sales totalling 467 between January and September 2024. With a three-car-strong range of cutting-edge battery-electric vehicles, Volvo is currently leading the premium electric segment, outpacing rivals in the luxury arena.
Kia recently unveiled two all-new customised concept vehicles at the 2024 Specialty Equipment Market Association (SEMA) Show in Las Vegas.