Welcome to today's edition of the Daily 5.
Bosch, the world's largest auto supplier, took Rivian to court in July over an ugly dispute concerning the e-motors in the electric vehicle maker's pickups and SUVs, as Kurt Nagl reports today for our affiliate, Crain's Detroit Business.
These kinds of disputes happen often in the supply chain, but rarely lead to litigation because neither side is angry enough to air its dirty laundry in public.
This fight is unusual. In most cases, it's David vs. Goliath. The supplier is David taking on the big mean Goliath automaker who isn't paying enough for components.
But in Bosch vs. Rivian, it's the other way around.
Bosch is a massive corporation with $55 billion in annual worldwide business with automakers, according to the Automotive News list of the top 100 global suppliers. With roots dating back to Germany in 1886, Bosch's global operations employ about 429,000 people. It reported profits after taxes of $2.8 billion in 2023.
Rivian, on the other hand, dates all the way back to 2009 and, if lucky this year, it might generate $5 billion in revenue. It employs an estimated 15,000 people and isn't close to profitability — it hemorrhaged $2.9 billion in the first half of 2024.
Despite the math, Rivian refused to reimburse Bosch $204 million after it ceased using the supplier's e-motors and brought the work in-house, according to the lawsuit.
Rivian countersued, accusing Bosch of "reckless failures" in performing the contract.
"At the very heart of Rivian's vehicle design were four electric motors," the countersuit said. "To supply these mission-critical, custom motors, Rivian turned to the largest and most established supplier of automotive parts in the world: Bosch … That was a mistake."
Perhaps it was a mistake, but when you consider Rivian is the little guy in this fight, is the nascent automaker making a bigger mistake letting it fester into a court fight?
We'll likely find out no later than Feb. 3, when the judge in Wayne County Circuit Court in Detroit has scheduled a status conference. It wouldn't be a stretch to bet this case settles out of court.
In other news today, Tesla's Full Self-Driving software is under new scrutiny from U.S. safety regulators at NHTSA. Some 2.4 million Teslas are involved. NHTSA is looking at four crashes, including one pedestrian fatality. No response yet from Tesla or CEO Elon Musk.
If you've been following our terrific series of stories on how the auto industry is using artificial intelligence, you'll want to read this commentary from my longtime colleague Jamie Butters, the executive editor of Automotive News. He summarizes all the reasons why AI could revolutionize automaking.
Meanwhile, third-quarter earnings reports are starting to come out this week. The key reports in the auto sector today came from financier Ally Financial and Swedish safety products supplier Autoliv. Automotive News, unlike many of our competitors, takes the time to monitor and cover these reports.
Looking ahead, we'll be covering several more key third-quarter reports next week, including General Motors on Tuesday followed by several suppliers and dealership groups.
That's it for now. Have a great weekend!
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— Philip Nussel, online editor
