Foley Automotive Update

Analysisby Julie Dautermann, Competitive Intelligence Analyst

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Key developments

• Foley & Lardner's2025 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 isMade in China: What the Automotive Industry Should Know About the Emergence of Chinese Manufacturing of Connected Vehicles Amid Increasing U.S. Restrictions.Subscribehereto receive updates when new articles in this series are published.
• Foley & Lardner partner Vanessa Miller, chair of the firm's national Automotive Team, was quoted in the Trucking Dive article,"Tariffs Swing Volumes Up and Down for Auto Haulers."
• In a December 2 Society of Automotive Analysts Coffee Breakwebinar, Foley & Lardner partners Ann Marie Uetzand Nicholas Ellis provided an update on recent Michigan cases regarding the practical implications for requirements contracts and the automotive supply chain.
• U.S. new light-vehicle sales in November 2025totaled 1.28 million units, representing aSAAR of 15.7 million, according topreliminary estimates from GlobalData. This represents a decline of over 6% compared to November 2024.
• The risk of semiconductor supply disruption and automotive production stoppagesremains ongoing amid an appeal to the Dutch Supreme Court from the Chinese-owned, Netherlands-based Nexperia pertaining to control over the company.
• AReuters report based on interviews with auto executives, suppliers and chip distributors described how "just-in-time inventory practices and limited supply-chain diversification left automakers vulnerable" to the Nexperiasupply disruption.
• Automotive News provided key takeaways from the MEMA Original Equipment Suppliers Annual Conference held November 19 in Michigan.
• The Department of Transportationannounced a proposal to lowerCorporate Average Fuel Economy (CAFE) rules to an average of34.5 miles a gallon for passenger vehicles by model year 2031, down from the 50.4 miles a gallon standard established by the Biden administration. TheOne Big Beautiful Bill Act, enacted on July 4, 2025, maintained the CAFE statute buteliminated civil penalties for noncompliance with federal fuel economy standards.
• The Canadian governmentwill tighten the tariff rate quota level for steel product importsto 20% of 2024 levels for countries with which Canada doesn't have a trade agreement. Broader trade negotiations between the U.S. and Canadaremain stalled.
• The U.S. Commerce Department on December 1confirmed the tariff rateon imports from South Koreaincluding vehicles would be lowered to 15%, from a previous rate of 25%, retroactive to November 1, 2025.The 15% cap for U.S. tariffs on Korean goodshad beenproposed in October 2025,following a framework agreement established in July 2025.

OEMs/SUPPLIERS

• A report inAutomotive News assessed the causes behind a rising number of engine-related defects and recalls.
• Toyota Motor North America recalled over one million vehicles across the 2022-2026 model years due to a defect in its parking assistance software that may cause rearview camera images to freeze or fail to appear.
• Stellantisrecently hired nearly 2,000 salaried employees at its North American headquarters in Auburn Hills, Michigan, amid efforts to improve performance in the region.
• As part of a commitment to expand U.S. vehicle and component production, GMwill invest $300 million in its Romulus Propulsion Systems plant near Detroit, and $250 million in its Parma Metal Center in Ohio.
• Ford said a second fire at the plant of a key aluminum supplier on November 20will not impact production or profits as the blaze was swiftly contained.
• GMmissed a deadline imposed by the Canadian government to submit plans for its idled CAMI plant in Ontario, which formerly produced BrightDrop electric vans.

MARKET TRENDS AND REGULATORY

• The Office of the U.S. Trade Representative announced that the environmental committee organized under the United States-Mexico-Canada Agreement (USMCA) will meet December 11, according to anotice published on November 26.
• In response to Chinese rare earth export-control regulations, a number of companies in China arepursuing strategies such as adjusting magnet formulas to avoid using certain restricted elements.
• The effects of tariffs, persistent inflation,and a weaker job market are causing moreU.S. consumers to rethinknew vehicle purchases, causing certain dealers to be increasingly reliant on sales to high-income consumers.
• Approximately 18,000 dealerships and 5.6 million customers have beenaffected by a cyberattack on a credit check provider.
• AJanuary 14, 2026 hearing before the U.S. Senate Committee on Commerce, Science and Transportationconcerning vehicle regulation and affordabilitywill include discussions on the costand effectiveness of certain automotive safety requirements, such as automatic emergency braking and alarms to remind drivers that a child is in the back seat.

Autonomous Technologies and VehicleSoftware

• Automotive News provided overviews of automakers' recently announcedartificial intelligence initiatives, and thechallenges of measuring the impact of certain investments in AI-powered manufacturing systems.
• GM's first-ever Chief AI officerdeparted after eight months in the role, and two senior software executives have resigned, amid a broaderrestructuring that will integrate the automaker's AI capabilities and software engineering functions under one Global Product organization. The reorganization is intended to address the effects of silos at the automaker and improve how the technologies are developed and deployed.
• Waymo has pursued software updates to make its robotaxis "confidently assertive" to drive more like humans, according to a report inThe Wall Street Journal.
• Teslaplans to "roughly double" the number of vehicles offering ride-hailing services in Austin, Texas, in December. The initial rollout began in June 2025, and the company provides human operators in the driver's seat for safety.
• Uber Technologies Inc. and Avride Inc. will launch ride-hailing services in Dallas, Texas, with a human safety operator behind the wheel.
• Automakers' efforts to generate notable profits from monetizing vehicle data have "largely failed," according to a report inAutomotive News.

HYBRID AND Electric Vehicles

• Fordreported its all-electric vehicle sales in Novemberdeclined by 60.8% year-over-year to 4,247, while hybrid vehicle salesrose 13.6% YOY to 16,301. The automaker's total new vehicle sales across all powertrains fell 0.9% YOY.
• Volkswagen's Scout Motors will primarilyoffer gasoline-electric hybrid SUVs and pickups, in a shift from a previous intent to offer all-electric vehicles. The company indicated it is on track to begin buildingpreproduction vehicles in 2026 at its plant in South Carolina.
• EV charging network operator Ionnaplans to invest $250 million to establish charging infrastructure in California over the next three years. Ionna is a joint venture among eight automakers.
• Electric commercial truck maker Bollinger Motors isreported to have ended operations.
• Crain's Detroit reported on a former GM executive's plan for a new electric commercial truck start-up, ZMD Motors LLC.
• Volvo's Proterra battery business expects to experience growingcustomer demand in 2026 for use in construction equipment and electrified school buses.
• Vianodebroke ground on a $3.2 billion graphite plant in St. Thomas, Ontario, supported by a $670 million loan from the province.

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