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

• Stellantis has reportedly asked suppliers for greater visibility into their parts supply chains.
• Cummins expects the Environmental Protection Agency to finalize its proposed revisions to heavy-duty truck nitrogen oxide (NOx) emissions shortly before the regulation is scheduled to become effective on January 1, 2027.
• Ford said its customers can opt out of sharing some or all of their connected-vehicle data. The announcement comes after GM reached a $220 million settlement to resolve claims that it illegally sold the behavior and location data of nearly 10.3 million drivers to third parties.
• To increase capacity of hybrid vehicle production, Honda will invest $3 billion to establish a new vehicle assembly plant in Ohio. The automaker and the Canadian government also announced a joint $867 million CAD investment to modernize Honda’s manufacturing complex in Alliston, Ontario and expand hybrid vehicle production.
• The union representing approximately 250 security workers at the ports of Los Angeles and Long Beach agreed to continue labor contract negotiations and extended their strike deadline to November 20, 2026.
• Diesel and jet fuel prices are projected to remain approximately 30% above pre-war forecasts in 2027, according to analysis from Wood Mackenzie.

TRADE/TARIFFS

• Foley & Lardner outlined potential trade policy ramifications over the next two years resulting from the outcome of the 2026 U.S. midterm elections.
• Despite the Democrats’ control of Congress in January, significant legislative changes to trade and tariff policy over the next two years are expected to be limited unless Democrats secure enough Republican votes to override potential Senate filibusters or a presidential veto.
• Incoming House speaker Hakeem Jeffries and incoming Senate Finance Committee chairman Ron Wyden are among the Democratic lawmakers who have expressed goals to reassert congressional authority over trade policy. Certain incoming Democratic lawmakers may also examine the executive branch’s novel use of certain statutes to impose tariffs, or force congressional votes on unpopular trade measures such as the tariffs on Canada to encourage Republican defections.
• In a November 12 social media post, President Trump threatened to “immediately” double tariffs on goods from Mexico if the country did not stop what he described as migrant caravans preparing to head to the U.S. Mexican President Claudia Sheinbaum stated that no migrant caravans have reached the U.S. border since January 2025.
• Foley & Lardner provided five best practices for stress-testing supply chains for tariff shock.
• Foley & Lardner partner Alejandro Gómez-Strozzi was highlighted in the El Financiero article, “Sinaloa: entre la inseguridad y la apuesta industrial,” discussing the importance of corporate compliance as Mexico begins its evaluation by the Financial Action Task Force. 
• Toyota reportedly asked the Trump administration whether its $3.6 billion Texas plant investment qualifies it for tariff relief similar to the deal Audi is rumored to have secured for establishing a manufacturing plant in Georgia.
• Prime Minister Mark Carney indicated that recent trade discussions between the U.S. and Canada have achieved progress, though significant challenges remain unresolved.
• Growth in Chinese vehicle exports is projected to decrease to 10% in 2027, as certain international markets take steps to protect their local industries. Chinese vehicle shipments grew 75% year-over-year in the first ten months of 2026.
• U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer urged China to address what they viewed as potential shortfalls in commitments made last year as part of the trade truce reached between President Trump and Chinese President Xi Jinping.
• China extended the suspension of its additional 24% retaliatory tariff on U.S. goods for an additional two months, through January 10, 2027.

OEMs/SUPPLIERS  

• Toyota lowered its annual group vehicle sales projection to 10.99 million units for the fiscal year ending March 2027, from 11.18 million units forecast previously, while raising its operating profit outlook to 3.9 trillion yen ($24.6 billion), which is 15% higher than previous guidance.
• U.S., European, and Asian automakers are doubling down on the U.S. market, driven by high profits on large pickups and SUVs and diminished sales in China. This could lead to the risk of overcapacity in the years ahead if certain U.S. models do not sell as planned, or if sales volumes fail to meaningfully increase.
• Bosch plans to spin off its semiconductor operations into a dedicated independent division in 2028 to capture growth opportunities in markets that include data centers and humanoid robots.
• Lear’s new, highly automated seating plant in Michigan, set to open next year, will serve as a “blueprint” for its global manufacturing operations.
• Martinrea’s U.S. subsidiaries will partner with Raytheon to accelerate production of Tomahawk cruise missiles.
• Stellantis’ Italian plants could experience production disruptions in November and December due to a chip shortage impacting engine control units for certain Fiat models. Chipmakers continue to warn that surging AI demand is creating bottlenecks in semiconductor supply chains, constraining supply to automakers and other industries.
• Schaeffler plans to cut an additional 3,460 jobs in Europe, including through four plant closures in Germany, citing an “industry crisis” as it works to reduce its workforce by 18% by 2028.
• Toyota will launch a dedicated robotics division in January 2027 to speed the development of industrial robots. This follows recent humanoid and robotics investments and initiatives announced by companies including Tesla, Hyundai, and Xpeng.
• Ford announced a goal to sell 5 million vehicles a year worldwide by 2032, representing a 20% increase over current volumes. 
• In a hurdle for its direct sales plan, VW’s Scout brand was denied a dealer license in Tennessee.
• Stellantis reportedly finalized the sale of its idled Brampton, Ontario plant to defense contractor Roshel. Canadian Prime Minister Mark Carney indicated the sale of the plant violates obligations the automaker made to federal and regional governments in exchange for taxpayer financing.

AUTONOMOUS TECHNOLOGIES AND VEHICLE SOFTWARE

• According to the 2025 Gartner AI Adoption in Supply Chain Survey published last month, more than half of surveyed organizations struggle to integrate artificial intelligence into existing operations because they are layering it onto incompatible legacy workflows and technologies. In addition, only 17% of respondents have deployed AI successfully at scale, and human adoption remains the biggest obstacle to success.
• Humble Robotics, a San Francisco-based autonomous freight technology developer, raised $51 million of Series A venture funding.
• Mining companies are increasing their use of autonomous electric trucks, particularly in China, according to a report in The Wall Street Journal.

MARKET TRENDS AND REGULATORY

• The National Highway Traffic Safety Administration launched an investigation into 1.2 million Ford vehicles, including 2021 through 2026 model year Explorers, over reports of burn injuries caused by airbag deployments.
• The NHTSA is investigating Comma.ai over concerns that improper use of the company’s aftermarket hands-free driving device may have contributed to vehicle crashes.
• According to the American Trucking Associations, the U.S. trucking industry is in the early stages of a supply-driven recovery, amid declining capacity following a prolonged freight downcycle.
• The European Parliament’s Environment Committee voted on November 4 to ease a requirement for a 100% reduction in tailpipe CO2 emissions for all new passenger cars and vans sold in the region starting in 2035. Automakers will instead be required to reduce emissions by 87.5% by 2035, with a further 7.5% offset by using green steel. 
• Fourteen European Parliament members asked the European Commission to assess whether Chinese automaker BYD poses cybersecurity and national security risks.

HYBRID AND ELECTRIC VEHICLES

• Hyundai plans to invest $450 million in its Montgomery, AL plant to prepare the site for future vehicles, including the expansion of new engine production capabilities and extended-range electric vehicle technology.
• Tesla plans to begin battery-cell production at its plant near Berlin by mid-2027, raising the Model Y’s European content to 90% and exceeding proposed EU local-content requirements.
• Certain South Korean and Japanese battery makers that invested in U.S. EV battery production plants are pivoting to energy storage, according to a report in The Wall Street Journal.
• Medium-duty commercial EV technology developer Harbinger Motors raised $240 million of Series D venture funding to support growth across defense, energy storage, and autonomous driving applications. FedEx recently ordered 2,000 all-electric Harbinger trucks in a deal worth more than $300 million.