Foley Automotive Update

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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Key developments

Foley & Lardner’s 2025 Auto Trends Series, Driving the Future: Innovations, Regulations, and Strategies, delivers actionable insights on critical topics, including regulatory changes, resilient supply chains, global competition, connected vehicle data, and talent strategies. The most recent article in the series is Connected Vehicle AI: Goldmine or Compliance Minefield? Subscribe here to receive updates when new articles in this series are published.
Foley & Lardner provided considerations for multinational companies regarding the possibility of recovering refunds of tariffs imposed in accordance with the International Emergency Economic Powers Act(IEEPA).
The U.S. Department of Commerce will seek feedback from stakeholders between January 1, 2026 and 11:59 p.m. ET on January 14, 2026 on including new auto parts and components within the scope of sectoral tariffs, according to a notice published this week.
Business and industry stakeholders that testified during a U.S.-Mexico-Canada Agreement (USMCA) public hearing on December 3-5, 2025, urged caution against destroying the benefits of the agreement while noting there is room for improvement. The Office of the U.S. Trade Representative (USTR) is expected to provide a report to Congress regarding its USMCA position by early January, in preparation for ongoing negotiations ahead of the July 1, 2026 deadline to conclude the review.
In a statement on the USTR review of the USMCA, the American Automotive Policy Council (AAPC) urged the administration to “preserve the core structure of the USMCA while pursuing targeted refinements, adequate transition periods, and measures that further incentivize North American supply chain resilience.”
The National Association of Manufacturers (NAM) stated the “U.S. should preserve and strengthen the USMCA during the agreement’s six-year review,” but seek targeted revisions in areas that include reducing red tape at the border, promoting greater use of USMCA preferences, addressing unfair competition, and working with North American partners on “regional economic security issues instead of levying Section 232 tariffs.”
In recent remarks to The Wall Street Journal and POLITICO, USTR Jamieson Greer suggested the USMCA could be split into separate deals, and commented that withdrawal from the USMCA is “always a scenario.” Greer also stated, “The president’s view is he only wants deals that are a good deal. The reason why we built a review period into USMCA was in case we needed to revise it, review it or exit it.” According to the Center for Strategic and International Studies, “any party can invoke USMCA Article 34.6 and exit the agreement with six months’ notice, regardless of the review process.”
The National Automobile Dealers Association (NADA) predicts 2025 U.S. new light-vehicle sales will “finish the year at 16 million-plus units, given the strong sales performance earlier this year.”
Mexico approved a proposal to impose tariffs of 5% to 50% on more than 1,400 products from China and other nations with which it does not have a free trade agreement.
Shipments across the U.S. – Mexico border could be delayed due to blockades in certain areas that have been coordinated to protest robberies and assaults on cargo drivers. TRADLINX, a supply chain visibility platform based in Seoul, stated, “For cross-border logistics teams, this is not a one-day headline; it’s an ongoing risk factor for planning U.S.–Mexico freight through the end of the year and into 2026.”

OEMs/SUPPLIERS

Amid heightened market pressures that could lead to increased risk for supplier bankruptcies in 2026, a new Supplier Distress Tracker created by Automotive News monitors for layoff notices, insolvencies and bankruptcies.
The Chinese government is reported to have sought assistance from European automotive trade groups to help facilitate a resolution of ongoing disputes over the operations of Chinese-owned Netherlands-based chipmaker Nexperia.
Automotive News provided an overview of what several major suppliers plan to feature at CES 2026, to be held January 6-9 in Las Vegas.
Detroit Manufacturing Systems, LLC completed its previously announced acquisitions of Android Industries, LLC and Avancez, LLC. The combined entity, Voltava, LLC, has an estimated revenue of $1.77 billion, and it will be headquartered in Auburn Hills, Michigan.
Aisin Canada will invest $11 million in its Stratford, Ontario plant to produce panoramic sunroofs. The investment will be supported by $2.2 million awarded through the Ontario Together Trade Fund (OTTF), which was established to assist businesses impacted by U.S. import tariffs.
Lidar supplier Luminar filed for Chapter 11 bankruptcy protection.
Stellantis exceeded 1,000 new hires for an upcoming third shift planned at its Windsor, Ontario plant to produce Dodge Chargers and Chrysler minivans. The automaker recently received a notice of default from the Canadian government on contracts worth hundreds of millions of dollars in assistance due to moving Jeep Compass production from Brampton,Ontario to Illinois.
GM plans to provide lump-sum payments as part of layoff packages to Unifor Local 88 members as the automaker’s idled CAMI Assembly Plant in Ingersoll, Ontario is “assessed for future opportunities.”
Hyundai and Kia will install theft prevention equipment on all new vehicles and retrofit over 4 million vehicles to resolve an investigation by a bipartisan coalition of 35 attorneys general.
Nissan Americas leader Christian Meunier intends to improve the automaker’s 5% U.S. market share by adjusting production to specific dealer orders, instead of relying on bulk output. The automaker is also considering plans to localize hybrid powertrain production at its plant in Decherd, TN.

MARKET TRENDS AND REGULATORY

U.S. new light-vehicle inventory was estimated at 3.01 million units at the start of December 2025, or a 90 days’ supply industrywide, compared to 2.97 million units at the beginning of November 2025. Inventory across individual brands varied significantly: Lexus and Toyota had the lowest days’ supply, at 44 and 45, respectively, while the highest inventory exceeded a 140 days’ supply for Audi, Jeep, Chrysler, and Lincoln.
Kelley Blue Book data indicates new vehicle average transaction price (ATP) rose 1.3% year-over-year to $49,814 in November, and the average new vehicle manufacturer’s suggested retail price (MSRP) has been above $50,000 since April 2025. The average incentive package in November was 6.7% of ATP, compared to 7.9% of ATP in the same period last year. The analysis also noted that new vehicle prices reflect “a market heavily influenced by affluent households.”
Commentary from Edmunds excerpted in CNN and CNBC suggested that certain new-vehicle consumers may “still face a challenging marketplace” despite the Federal Reserve’s December 10 decision to reduce the benchmark interest rate by a quarter-point to a range of 3.5% to 3.75%. Edmunds estimates the average monthly payment for a new vehicle reached $772 in November 2025, while the average amount financed was close to an all-time high of $44,000.
A report in Automotive News assessed whether vehicle total cost of ownership could increase if automakers deprioritize fuel-saving technologies in response to the Trump administration’s revisions to Corporate Average Fuel Economy standards.
The Environmental Protection Agency is reportedly planning to delay enforcement of 2027-2032 vehicle pollution rules. The Biden-era standards would require a 50% reduction in certain pollutants such as nitrogen oxides through 2032 for light vehicles, and a 58% reduction for medium-duty vehicles.
A significant portion of vehicles recalled across all reasons – including serious flaws – do not get repaired, according to analysis of National Highway Traffic Safety Administration data by The Wall Street Journal.
Car and truck rental company Enterprise Mobility acquired St. Louis-based Hogan for an undisclosed amount. The deal is expected to support Enterprise Mobility’s entry into the Class 7 and Class 8 heavy-duty truck market.
The European Commission released a proposal to require a 90% reduction of carbon-dioxide tailpipe emissions from baseline levels for new cars sold in the bloc beginning in 2035. The remaining 10% of emissions will have to be offset by sustainable fuels or low-carbon steel made in Europe. The proposal revises a previous target that would have required 100% CO2 emissions reductions for new passenger vehicles sold in the EU by 2035.
In remarks submitted for a U.S. House hearing on Chinese vehicles, the Alliance for Automotive Innovation urged lawmakers to address the competitive threat posed by Chinese manufacturers, and stated, “No amount of investment by automakers and battery manufacturers operating inside the U.S. can counter a China that is enabled by subsidies to chronically oversupply around the world. This is a recipe for dumping that Congress and the Trump Administration must prevent from happening inside the U.S.”
China’s vehicle exports in the first eleven months of 2025 reached 6.3 million units globally, up 18.7% year-over-year.

Autonomous Technologies and Vehicle Software

Uber plans to offer robotaxi service in more than 10 markets globally by the end of 2026.
Rivian plans to launch an artificial intelligence chip developed in-house, as well as lidar sensors, for its electric R2 models in late 2026. In the coming weeks, Rivian also intends to offer a new Autonomy+ driver-assistance package that will be available for purchase through a software update.
Volvo is considering collaborations that include licensing agreements for its new “Superset” software stack that will run on the automaker’s future EV models.
Detmar Logistics will use trucks equipped with Aurora Innovation’s self-driving technology to autonomously transport fracking sand on public roads and highways in parts of the Permian Basin in Texas.

HYBRID AND Electric Vehicles

Ford will incur approximately $19.5 billion in special charges primarily related to its EV business, and the automaker announced a revised electrification strategy that will prioritize “higher-return opportunities.” By 2030, Ford intends that 50% of its global volume be hybrids, extended-range EVs, and electric vehicles, versus 17% today. Ford lost nearly $13 billion on its EV business since 2023.
A report in The Wall Street Journal described EVs as a “money pit” for U.S. automakers, while noting that scaling back electrification strategies will impede their ability to compete with Chinese automakers.
New EV sales in November 2025 were estimated at 70,255 units in the U.S., falling 41% year-over-year and down 5% from October 2025.
South Korean battery maker SK On will end a battery plant joint venture with Ford as part of a revision to allocate resources to markets such as energy storage systems. Ford will assume full ownership of the companies’ two battery plants in Kentucky, while SK On will own an upcoming facility in Tennessee.
BloombergNEF predicts the average global price for a lithium-ion battery pack in 2026 will drop by 3% year-over-year to $105 per kilowatt-hour.
Paccar units Kenworth Truck and Peterbilt Motors launched new battery-electric tractor and truck models.
The CEO of ChargePoint Holdings indicated that more than 40 states have solicited or signed contracts to build new EV charging stations in recent weeks, located in rural and underserved areas, and “other places where they might not have otherwise made economic sense.” The activity was attributed to the Department of Transportation’s revised guidance for the National Electric Vehicle Infrastructure (NEVI) Formula Program issued in August 2025.
Sixteen states and the District of Columbia sued the Trump administration over allegations the federal government is blocking congressionally approved funds intended to establish EV charging infrastructure. The funding was established through the Charging and Fueling Infrastructure Discretionary Grant Program (CFI) and the Electric Vehicle Charger Reliability and Accessibility Accelerator Program. A group of environmental organizations filed a separate suit accusing the Department of Transportation and the Federal Highway Administration of unlawfully withholding funding for the CFI program.
As of late 2025, the U.S. was estimated to have over 81,000 EV charging stations with more than 250,000 individual charging ports nationwide. This represents a 17% increase compared to the start of 2025.