Foley Automotive Update

Key Legal Insights from Foley’s Automotive Team

Analysis by Julie Dautermann, Competitive Intelligence Analyst

Foley is here to help you through all aspects of rethinking your long-term business strategies, investments, partnerships, and technology. Contact the authors, your Foley relationship partner, or our Automotive Team to discuss and learn more. 

AUTOMOTIVE KEY DEVELOPMENTS

• The year-to-date SAAR through September 2026 for U.S. new light-vehicle sales totaled 16.1 million units, down 1.9% compared to the same period last year. Hybrid sales are up 2.4% year-over-year through September, while battery electric vehicle (BEV) sales are down 29.2% YOY. Year-to-date hybrid market share reached 15.6% of new vehicles sold, while BEV market share totaled 6.2%.

• Third quarter 2026 U.S. new-vehicle sales increased for Honda (up 9.3% YOY), Nissan (retail up 7.8%), Hyundai Motor Group (up 5.4%), and Toyota (up 0.5%). Third quarter sales declined for automakers including Ford (down 6.6% YOY) and GM (down 5.5%). In addition, Stellantis reported a 12% YOY sales drop for North America.

• Stellantis launched a new “co-location” program that will bring select suppliers to its North American headquarters in Auburn Hills, Michigan, to strengthen collaboration in certain areas including vehicle design.

• A new Mobility Global report predicts that Chinese automakers will widen their lead over Western automakers in mass-market vehicles, driven by greater scale, faster development cycles, and lower costs. Western automakers are expected to retain greater advantage in premium brands, safety engineering, and fleet sales.

• China exported more than 7.1 million passenger cars globally in the first nine months of 2026, up by over 70% compared with the same period in 2025. Year-to-date new-vehicle sales within China are down by more than 20% YOY.

• U.S. new-vehicle inventories surpassed 3 million units in early October, driven by rising supplies of certain full-size and high-priced trucks and SUVs.

Trade/Tariffs

• The Office of the United States Trade Representative (USTR) announced a public consultation process ahead of the 2027 United States-Mexico-Canada Agreement (USMCA) joint review. Comments must be submitted by January 12, 2027. Annual joint reviews may occur until all parties agree to extend the USMCA, a nation announces the intent to exit the agreement, or termination occurs as scheduled in 2036.
• Amid ongoing efforts to secure a U.S.–Mexico trade deal, President Claudia Sheinbaum indicated her government is taking steps to address Donald Trump’s concerns about the growing U.S. trade deficit with Mexico with approaches that may include buying more American goods.
• Mexico’s auto exports to the U.S. fell 5% YOY in the first nine months of 2026, including a 12% decline in September. By contrast, shipments to Canada rose 9% over the nine-month period.
• The Department of Commerce’s Bureau of Industry and Security (BIS) released guidance to U.S. Customs and Border Protection (CBP) on assessing “U.S. content” in certain Canadian and Mexican products that qualify for preferential tariff treatment under the USMCA in connection with modified U.S. duties on imported aluminum, steel, and copper.
• The U.S. joined 14 other economies in pledging to address excess manufacturing capacity and production in industries that include EVs and batteries. Issued after the recent G20 trade ministers meeting in Milwaukee, the joint statement comes as a USTR Section 301 investigation into structural overcapacity across more than a dozen major trading partners may lead to higher tariffs on those economies.
• A preliminary determination from the U.S. Department of Commerce found that truck bed covers imported from China are being sold at less than fair value, making them potentially subject to tariffs of 46.77% to 107.41%. 
• The European Union is expected to limit the number of hybrid electric vehicles imported from China to 350,000 cars a year, as part of a four-year agreement reached last week. Chinese vehicles assembled in the EU will not be subject to the limit. EU leaders are expected to meet in the coming days to decide whether to pursue additional measures to address high volumes of Chinese exports.
• As EU leaders debate the path forward for “Made in Europe” local-content requirements under the proposed Industrial Accelerator Act, several Chinese automakers are taking steps to establish European factories and supply chains.

OEMs/SUPPLIERS  

• Industry analysts in Automotive News commented on the likelihood of Toyota surpassing GM to become the top-selling automaker in the U.S. based on sales volume.
• Stellantis will temporarily suspend production at its Windsor Assembly Plant for several weeks beginning October 19, citing adjustments needed “in response to market conditions.” The shutdown follows stalled contract negotiations with Unifor.
• Hyundai Transys will invest nearly $560 million to expand its hybrid transmission manufacturing capabilities in West Point, GA.
• Nidec Corporation plans to divest its automotive electric motors business, as part of a broader restructuring that will include exiting certain low-margin operations. 
• Dauch Corporation, formerly American Axle & Manufacturing, announced plans to name a new chief financial officer, as well as a restructuring of its executive team to support its next phase of growth. Nathan Iles will succeed Christopher May as Chief Financial Officer on December 1, 2026.
• OPmobility will acquire Hyundai Mobis’ lighting business for an enterprise value of $443 million, expanding the French automotive supplier’s presence in the global vehicle lighting market.
• Honda will delay production of its next-generation CR-V by three months, to April 2027. To increase U.S. production of the CR-V—its best-selling model—the automaker also reportedly plans to cancel production of the next-generation Civic sedan at its Greensburg, IN plant previously slated for 2028.
• Volvo Car plans to lower costs by sharing more mechanical parts from majority owner Geely, while using different software in the Western auto markets.
• Stellantis warned that Brazil’s rising imports of partially assembled vehicles from China could ultimately threaten thousands of domestic auto industry jobs.
• UAW President Shawn Fain was re-elected to another four-year term.

Autonomous technologies and vehicle software

• Waymo started testing its autonomous vehicles in Detroit without a safety monitor in the driver’s seat.
• GM launched AI-powered OnStar Fleet Intelligence, which combines various platforms for vehicle data and connected services into a single unified system.
• Chinese automaker Xpeng indicated it is “on track” to debut its advanced driver-assistance system, Navigation Guided Pilot, in parts of the EU in 2027. Xpeng intends to sell up to 500,000 vehicles annually in Europe by 2030, supported by increased production in the region.
• Stellantis hopes to launch supervised, hands-free driving technology developed in partnership with AI startup Wayve in North America in 2028. First announced in May 2026, the partnership is working to integrate Wayve’s AI-powered driving software into the automaker’s STLA AutoDrive platform.

market trends and regulatory

• Daimler Truck North America urged the Environmental Protection Agency to finalize its proposed July 2026 revisions to nitrogen oxide (NOx) emissions standards for model year 2027 and later heavy-duty vehicles. The request follows broader efforts by the Truck and Engine Manufacturers Association to secure clarity on the final requirements.

HYBRID AND Electric Vehicles

• Toyota opened its new Battery Center in Saline, Michigan to serve as a development hub for a full range of battery types. The $50 million facility will also support supplier partners making batteries for Toyota vehicles in North America.
• GM–LG Energy Solution joint venture Ultium Cells LLC will upgrade its Spring Hill, TN, battery cell manufacturing facility to produce lithium manganese-rich (LMR) battery cells for future EVs. Together with LG Energy Solution’s investment in lithium iron phosphate (LFP) cells for energy storage systems, the two programs and related facility improvements will total $1 billion by 2030.
• Honda plans to launch 15 next-generation hybrid models through March 2030, with North America as the primary market.
• Despite high fuel prices, electric semi-trucks are struggling to compete with diesel-powered rivals because of higher operating costs and charging downtime.
• Charging companies in the U.S. are reportedly on track to install as many public EV charging ports this year as in 2025. The U.S. is estimated to have over 14,000 fast-charging stations and 80,000 ports nationwide across all providers as of Q3 2026.
• Toyota will invest $1.3 billion to establish a new electrified vehicle plant at its existing manufacturing complex in Argentina, with the intent to export roughly 70% of the new plant’s vehicle output. An estimated 80% of all EVs sold in Latin America are manufactured by Chinese brands.
• Lucid Motors reported its third quarter 2026 EV production reached 2,954 units, down 48% from Q2 2026 and representing a decline of 24% YOY.
• China’s Geely confirmed plans to begin EV sales in Canada in 2027. The automaker did not provide details about which models it will sell in Canada. Chinese competitors including BYD, Chery, and Dongfeng have not confirmed a date for launching sales in Canada. 
• Zhejiang Leapmotor plans to offer a new plug-in hybrid model in Europe in the first half of 2027. The automaker expects to proceed despite efforts in the bloc to impose import limits on Chinese-made vehicles.