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Key Legal Insights from Foley’s Automotive Team<\/p>\n Analysis by Julie Dautermann, Competitive Intelligence
Foley is here to help you through all aspects of rethinking your
Key developments<\/p>\n
OEMs\/SUPPLIERS<\/p>\n
MARKET TRENDS AND REGULATORY<\/p>\n
Autonomous Technologies and Vehicle
HYBRID AND Electric Vehicles<\/p>\n
The content of this article is intended to provide a general
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\nFoley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients\u2019 priorities, objectives and challenges. We work hard to understand our clients\u2019 issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses. <\/p>\n
\n Foley is here to help you through all aspects of rethinking your long-term business strategies, investments, partnerships, and technology.
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\n within Coronavirus (COVID-19), Cannabis & Hemp and Insolvency\/Bankruptcy\/Re-Structuring topic(s)
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\nAnalyst<\/p>\n
\nlong-term business strategies, investments, partnerships, and
\ntechnology. Contact the authors, your Foley relationship partner,
\nor our Automotive Team to discuss and learn more.<\/p>\n
\nFoley & Lardner assessed<\/a> the compliance ramifications stemming
\nfrom the U.S. Department of Justice’s first-ever
\nantitrust whistleblower award.
<\/p>\n
\nElevated costs and financial distress could lead to
\nsignificant supplier consolidation in 2026,
\naccording to a report in Automotive News<\/a>.
<\/p>\n
\nU.S. 2026 new light-vehicle sales are
\nprojected to reach 16 million to 16.2 million
\nunits, according to forecasts from Edmunds and GlobalData,
\nrespectively, shared at the Federal Reserve Bank of Chicago’s
\n32nd Annual Automotive Insights
\nSymposium<\/a>.
<\/p>\n
\nA number of automakers urged the U.S. Trade
\nRepresentative to simplify compliance with the
\nU.S.-Mexico-Canada Agreement (USMCA),
\nwhile consistently maintaining large parts of the agreement,
\naccording to excerpted commentary<\/a> from a public docket<\/a> concerning the operation of the
\nUSMCA with respect to trade in automotive
\ngoods.
<\/p>\n
\nPrime Minister Mark Carney expects<\/a> a “robust review” of the
\nUSMCA, noting that President Trump’s recent threat<\/a> to impose 100% tariffs on
\nCanadian goods likely signifies “prepositioning ahead
\nof negotiations.” The president’s threat followed
\nCanada’s agreement to allow tens of thousands of
\nChinese EVs into the Canadian market annually at a
\n6.1% tariff.
<\/p>\n
\nThe Commerce Department issued a notice<\/a> outlining submission
\nprocedures for importers of medium- and heavy-duty
\ntrucks to qualify for preferential tariffs under the
\nUSMCA.
<\/p>\n
\nThree months have passed since the U.S. Supreme
\nCourt heard oral arguments<\/a> regarding the legality of
\nthe Trump administration’s tariffs as imposed under the
\nInternational Emergency Economic Powers Act
\n(IEEPA). Commentary in Bloomberg Law<\/a> and CNN<\/a> indicates the justices are in
\nrecess, and “next scheduled to take the bench and possibly
\nissue opinions on February 20.” While the recess could be
\ninterrupted if a decision was reached, this would be considered
\n“highly unusual.”
<\/p>\n
\nIn a January 29 executive order<\/a>, President Trump threatened to
\nimpose IEEPA-based tariffs on imports from
\nany nation that sells oil to Cuba.
<\/p>\n
\nPresident Trump threatened<\/a> in a social media post to
\nraise tariffs on South Korea to 25% from 15%,
\nciting that the nation has not moved fast enough to implement a
\ntrade agreement reached last year.
<\/p>\n
\nIn a social media post, President Trump announced a framework agreement<\/a> to
\nlower tariffs on India to 18%, from the current
\nrate of 25%.
\n
\nThe National Highway Traffic Safety
\nAdministration announced a notice<\/a> for public comment on potential
\nrequirements within federal safety standards
\n“that no longer serve a functional safety purpose” and
\n“act as barriers to the deployment of new technologies.”
\nThe comment period expires March 24, 2026.
<\/p>\n
\nNHTSA is preparing to roll back<\/a> fuel economy
\nstandards for heavy-duty pickup trucks and
\nvans. This follows a proposed rule<\/a> issued by the agency in December
\n2025 to reset standards for passenger cars and light trucks.
<\/p>\n
\nToyota maintained its position<\/a> as the top
\nglobal automaker in 2025, with sales inclusive of all
\nsubsidiaries up 4.6% year-over-year to a record 11.3
\nmillion units. Toyota and Lexus brand vehicle sales within
\nthe U.S. increased<\/a> 8% YOY in 2025.
<\/p>\n
\nGM reported<\/a> its 2025 net
\nincome declined 55% YOY to $2.7 billion, and revenue fell
\n1.3% YOY to $185 billion. The automaker’s 2026 projected net
\nincome ranges from $10.3 billion to $11.7 billion.
<\/p>\n
\nHyundai reported<\/a> its net profit fell 22% YOY
\nin 2025, despite achieving a 6.3% YOY revenue increase.
\nThe automaker attributed the profit decline to the impact of U.S.
\nimport tariffs and higher sales incentives amid intensified
\ncompetition. Last year Hyundai-Kia ranked fourth<\/a> in U.S. new light-vehicle sales,
\nbehind GM, Toyota, and Ford.
<\/p>\n
\nDetroit-based American Axle & Manufacturing
\nHoldings, Inc. changed its name to Dauch
\nCorporation effective<\/a> January 26, and began trading on the
\nNYSE under ticker symbol “DCH.”
<\/p>\n
\nElectrical equipment maker Eaton expects<\/a> to complete a spin-off of its vehicle
\nand eMobility units by March 2027, as part of a strategy to focus
\non higher growth and higher margin businesses.
<\/p>\n
\nNissan has a goal<\/a> to reach 1 million vehicle sales in the
\nU.S. by 2027.
<\/p>\n
\nThe Michigan Strategic Fund approved<\/a> a $4 million grant to
\nVolkswagen to support the retention of 909 jobs,
\namid efforts by the automaker to consolidate operations for certain
\ntechnical activities in the state. Separately, VW paused plans<\/a> for a new Audi
\nfactory in the U.S. due to market challenges that include the
\nimpact of tariffs.
<\/p>\n
\nThe Canadian government indicated<\/a> it will take steps to
\nrecover “hundreds of millions of
\ndollars” from GM and
\nStellantis for reducing production in the country.
\nMost recently, GM moved forward with a previously
\nannounced plan to eliminate the third shift<\/a> at its
\nOshawa Assembly plant in Ontario. The plant
\nproduces light- and heavy-duty Chevrolet Silverado pickup
\ntrucks.
<\/p>\n
\nStellantis will require<\/a> all U.S. employees to be in the
\noffice five days a week by the end of March.
<\/p>\n
\nThe Environmental Protection Agency determined<\/a> that a California
\nregulation applying heavy-duty emissions inspection and
\nmaintenance requirements to out-of-state trucks is
\nunlawful and will not count toward the state’s emissions
\nreduction targets. The California Air Resources Board
\n(CARB) stated it will continue enforcing<\/a> the Clean Truck
\nCheck program, and claimed the EPA “has no
\nauthority” over the initiative.
\n
\nIn a brief recently filed<\/a> in a California federal court,
\na number of heavy-duty truck manufacturers argued
\nthat CARB has continued to pursue
\nemissions rules and requirements that are
\npreempted by federal law, in spite of a partial preliminary
\ninjunction.
\n
\nAfter 10 crashes resulted in serious injury or death attributed
\nto “substandard and dangerous” replacement air
\nbag inflators, NHTSA issued<\/a> an urgent warning to used car
\nbuyers and owners to understand their vehicles’
\nmaintenance history. The agency indicated the air bag
\ninflators are likely to be illegally imported.
\n
\nMinivan sales rose 21% YOY in 2025 in the U.S.
\nto 393,812 units, according to data<\/a> from Edmunds.
\n
\nChinese-made vehicles accounted for nearly 20%<\/a> of total new car sales in
\nMexico in 2025. Mexico recently imposed<\/a> new tariffs of up to
\n50% on more than 1,400 products \u2013 including
\nfinished passenger vehicles and certain auto parts
\n\u2013 imported from China and other
\nnations with which it does not have a free trade
\nagreement.
\n
\nBYD has a goal<\/a> to increase vehicle sales outside of
\nChina by 24% to 1.3 million units in 2026.
\n
\nUnder rules scheduled to take effect<\/a> in 2027,
\nChina will ban retractable door handles on
\nvehicles and require both internal and external door
\nhandles that can be mechanically opened.
\n
\nNew-car registrations in Europe increased 1.8
\n% YOY in 2025, according to data<\/a> from the European Automobile
\nManufacturers’ Association (ACEA). The combined market share of
\npetrol and diesel cars dropped to 35.5%, down from 45.2% in 2024.
\nHybrid-electric vehicles accounted for 34.5% of
\nthe EU market in 2025, and battery-electric
\nvehicles accounted for 17.4%.
<\/p>\n
\nSoftware<\/p>\n
\nSoftware complexity has caused certain
\nautomakers to rethink the prioritization of in-house
\nsoftware development to instead increase their pursuit<\/a> of software-related
\nstrategic alliances.
\n
\nThe U.S. Senate Committee on Commerce, Science, and
\nTransportation heard testimony this week<\/a> from auto industry
\nexecutives who emphasized the need for a federal
\nframework to support autonomous vehicle
\ndevelopment and deployment.
\n
\nVolkswagen subsidiary Traton will invest up to
\n$25 million in PlusAI’s SuperDrive
\nself-driving software in an expanded partnership<\/a> to accelerate
\ncommercialization of autonomous, on-highway trucking in the U.S.
\nand Europe.
\n
\nMountain View, CA-based startup Gatik announced<\/a> it secured $600 million in
\ncontracted revenue through 2030 to transport goods in Level 4
\ndriverless trucks between distribution centers and certain Fortune
\n50 retailers’ stores. Gatik’s autonomous technology is
\nintegrated in Isuzu’s medium-duty platform and
\noperates in parts of Texas, Arkansas, Arizona, Nebraska, and
\nOntario.
\n
\nToronto-based autonomous trucking developer
\nWaabi raised<\/a> $750 million of Series C
\nventure funding to develop the AI technology that powers
\nself-driving trucks and robotaxis. In addition to the funding
\nround, Uber committed to invest up to $250
\nmillion in Waabi to deploy robotaxis on the ride-hailing
\ncompany’s platform.
<\/p>\n
\nCEO Elon Musk announced Tesla will end production<\/a> of its Model S
\nsedan and Model X SUV later this year, to
\nprioritize AI, autonomy, and producing humanoid robots at its
\nFremont, CA plant.
\n
\nNine models in Consumer Reports’ 2026 list<\/a> of the top ten best new
\nvehicles are hybrids.
\n
\nToyota Motor Manufacturing Canada started producing<\/a> the all-hybrid 2026
\nRAV4 in Ontario following a $1.1 billion investment to
\nsupport the next-generation program.
<\/p>\n
\nguide to the subject matter. Specialist advice should be sought
\nabout your specific circumstances.<\/p>\n
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