Automotive Update

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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Key Developments

• Foley & Lardner partners Vanessa Miller and Mark Aiello share insights on the challenges and potential of autonomous vehicles (AVs) in their ITS International article, "Rise of the Transformers."
• Foley & Lardner's "Made in America: End-to-End Guide to Developing Your U.S. Manufacturing Footprint" series delves into the critical decisions U.S. manufacturers face as they rethink where and how they build. The most recent article in the series is Clearing the Path: Environmental Permitting in the Era of Renewed American Manufacturing. Subscribe here to receive updates when new articles in this series are published.
• Foley & Lardner partner Gregory Husisian shared insights on the Trump administration's reliance on alternative trade measures as the U.S. Supreme Court reviews the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs in the SupplyChainDive article, "What tools does Trump have to impose tariffs?"
• An October 17 executive order announced 25% tariffs on medium- and heavy-duty trucks and parts, as well as 10% tariffs on buses, will take effect November 1, 2025 in response to a Section 232 national security investigation. The same order includes an extension of certain tariff relief programs for automakers until 2030, as well as new provisions to offset the cost of certain duties related to engine production and certain steel and aluminum duties. "Automobile manufacturers may apply to the [Commerce] Secretary for an import adjustment offset amount equal to 3.75 percent of the aggregate Manufacturer's Suggested Retail Price (MSRP) value of all automobiles assembled in the United States by the manufacturer, as determined annually by the Secretary, from April 5, 2025, through April 30, 2030."
• A number of automakers and trade groups including the Alliance for Automotive Innovation and the German Association of the Automotive Industry (VDA) have warned of the risk of semiconductor supply disruptions after chipmaker Nexperia halted shipments due to a Dutch government takeover from its Chinese owner.
• Ford temporarily cut production of at least five models, and Stellantis will temporarily idle its Warren Truck Assembly plant, due to a fire at a significant aluminum supplier.
• Suppliers expressed more pessimism about the outlook for the industry than automakers and dealers in the latest Automotive News Auto Industry Confidence Index.
• Global automakers could collectively incur a $30 billion reduction in 2025 operating profits because of import tariffs, according to analysis released this month from Moody's Ratings.
• China's rare earths exports fell 31% in September 2025 from August. This preceded the imposition of new restrictions on Chinese exports of rare earths and other critical materials due to national security concerns. China produces roughly 90% of the global refined supply of rare-earth minerals.
• Mexican lawmakers postponed discussions until late November concerning a proposal to impose tariffs of up to 50% on vehicles, steel and other products imported from China and other nations with which it lacks a trade agreement.

OEMs/Suppliers

• GM is expected to be the only U.S. automaker with a notable direct supply of American-made rare-earth magnets due to the automaker's previous efforts to reduce reliance on Chinese exports by securing long-term purchase agreements with new suppliers.
• Stellantis will invest $13 billion in U.S. manufacturing by the end of the decade, in an initiative that is expected to increase domestic production by 50% and add more than 5,000 jobs across plants in Michigan, Illinois, Indiana and Ohio. The automaker recently announced the return of Mauro Pino to oversee North American manufacturing operations.
• BorgWarner indicated it is seeing rising interest in range-extender architectures in certain markets.
• Daimler Truck and Toyota Motor will combine their Japanese truck units into a new joint company, ARCHION Holdings, that is scheduled to begin operations in April 2026.
• Linamar will acquire the North American assets of Aludyne Inc. for $300 million, in a deal that is expected to significantly expand Linamar's manufacturing footprint in the region.

Market Trends and Regulatory

• Kelley Blue Book analysis indicates the U.S. new-vehicle average transaction price (ATP) rose 3.6% year-over-year in September 2025, and surpassed $50,000 for the first time.
• Since 2010, the average auto loan balance has risen 57% and delinquencies have increased by more than 50%, according to a study published this month by VantageScore.
• The portion of subprime auto loans that are 60 days or more overdue on payments hit a record of more than 6% this year, according to Fitch Ratings.
• Ford will recall nearly 1.5 million vehicles in the U.S. due to the risk of rearview camera malfunctions.
• AlixPartners estimated automotive factories in Europe are running at 55% capacity on average amid market challenges that include heightened competition from Chinese automakers and reduced consumer demand. The consultancy also predicted that up to eight automotive plants in the EU may face closure in the years ahead.
• Global aluminum supplies are projected to enter a deficit beginning between 2027 and 2028, according to predictions from Citi and Wood Mackenzie.
• China's vehicle exports for the first nine months of 2025 were up 14.8% year-over-year, and domestic vehicle sales rose 7.8% YOY for the same period.
• Proposed regulations in China would require all passenger vehicles sold domestically to have "mechanical door releases accessible from both inside and outside the car." This follows concerns over the risk of malfunction of electronically-operated car door handles.

Autonomous Technologies and Vehicle Software

• Waymo announced plans to enter the European market with the launch of robotaxi service in London next year.
• Lyft Inc. will partner with autonomous vehicle developer Tensor Auto to deploy a fleet of hundreds of robotaxis in North America and Europe beginning in 2027.
• GM plans to debut "eyes-off" highway driving capabilities on the Cadillac Escalade IQ in 2028.
• Stellantis will partner with Pony AI to gradually roll out robotaxi services in certain European cities in 2026, beginning with testing in Luxembourg in the coming months.

Hybrid and Electric Vehicles

• Automotive News provided an update on canceled or postponed U.S. EV models.
• Tesla's third quarter 2025 net income fell 37% year-over-year to $1.37 billion, and total revenue increased 12% YOY to a record-high $28 billion.
• GM reported a one-time $1.6 billion charge in Q3 2025 resulting from a "strategic realignment" in EV manufacturing capacity, as well as "contract cancellation fees and commercial settlements associated with EV-related investments." The automaker recently extended temporary layoffs for 280 workers until early 2026 due to a temporary shutdown at its Factory Zero EV plant in Detroit-Hamtramck that affects production of the GMC Hummer EV and Cadillac Escalade IQ.
• GM has recently canceled programs and initiatives that include production of the BrightDrop electric commercial van produced at its CAMI Assembly plant in Ontario, the expansion of a joint venture battery materials plant in Quebec, and the HYDROTEC hydrogen fuel cell development program, which included a planned $55 million hydrogen plant with Piston Automotive in Detroit.
• Ford delayed a lithium supply deal with Australia's Liontown Resources Ltd. and reduced scheduled volumes by half.
• A number of battery companies that attended The Battery Show North America this month in Detroit emphasized opportunities in energy storage systems amid the expectation for muted EV demand, while expressing concerns over the supply chain ramifications of the One Big Beautiful Bill Act's foreign entity of concern (FEOC) eligibility restrictions to the 45X advanced manufacturing production tax credit.
• GM announced the all-electric 2027 Chevrolet Bolt will begin shipping to customers in the first quarter of 2026.

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