Foley Automotive Update

Key Legal Insights from Foley's Automotive Team

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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Key developments

• U.S. new light-vehicle sales in March are projected to reach a SAAR of 16 million units, according to a joint forecast from JD Power and GlobalData. First-quarter 2026 U.S. new light-vehicle sales are expected to drop by 7% year-over-year, with the sharp decline attributed partially to consumers who accelerated purchases ahead of the imposition of U.S. import tariffs last year.

• Stellantis sued a supplier over a dispute that was reported to have halted Jeep Cherokee production for a number of weeks at a Mexican factory.
• The Wall Street Journal reported the Trump administration is considering revisions to U.S. import tariffs on steel and aluminum.

• GlobalData lowered its 2026 global new light-vehicle forecast by 500,000 units to 92.4 million, due to concerns over the ongoing conflict in the Middle East. JD Power has maintained its 2026 U.S. sales projection of 16.3 million units.
• The Iranconflict is reducing supplies of helium, a byproduct of natural-gas production that is necessary for semiconductor manufacturing.

• Aluminum prices have risen by approximately 10% since the start of the Iran conflict. The Middle East accounts for approximately 9% of aluminum output globally.
• Last week Iran told the United Nations' maritime organization it will allow certain foreign ships that are not supporting acts of aggression against the country to cross the Strait of Hormuz. Transit in the Strait of Hormuz remains down by 95% compared to one month ago, and shadow fleet vessels were reported to have accounted for the majority of all transits over the last week.

• The National Transportation Safety Board (NTSB)recommended "standardized performance requirements and greater oversight" for automated vehicle technologies after finding drivers' overreliance on Ford's BlueCruise hands-free driving system and problems with the system's implementation contributed to two fatal crashes.

OEMs/SUPPLIERS

• Toyotaurged its top suppliers to increase productivity to survive industry volatility.
• Valeobroke ground on a new $225 million plant in McAllen, Texas that will include production of central compute units for GM's next-gen vehicles.

• Nearly a quarter of European auto suppliers expect to post losses this year, up from 15% in the previous edition of the European Association of Automotive Suppliers (CLEPA) biannual survey.
• GMplans to increase heavy-duty truck production by adding overtime hours at its Flint, Michigan plant starting this June. Separately, Fordintends to cancel its summer shutdown at four plants to support F-Series pickup truck production.

• Toyotawill invest $1 billion across its U.S. manufacturing operations in Kentucky and Indiana, as part of a broader commitment to invest up to $10 billion in its U.S. plants over five years.
• The Canadian government is accepting comments until April 13, 2026 regarding the structure of its revised remission formula in respect of counter-tariffs applicable to certain imports from the U.S.

• VW, BMW, and Mercedes collectively reported $6 billion in losses due to the impact of U.S. import tariffs in 2025.
• Mercedesannounced plans to invest $4 billion at its Alabama plant by 2030 to expand U.S. production.

• Hyundai plans to launch 36 "new or significantly enhanced" vehicles in North America through 2030, as part of a $26 billion investment in U.S. manufacturing the automaker announced last year.
• To compete in certain regions, legacy global automakers may increasingly need to rely on partnerships that utilize Chinese automakers' engineering and speed to market.

• Automotive News assessed the pros and cons of Chinese automakers'performance in Mexico, and scenarios for the expansion of Chinese vehicle sales in Canada.
• Trade groups for U.S. and global automakers are urging the Trump administration to maintain import restrictions on China's auto industry.

MARKET TRENDS AND REGULATORY

• The National Highway Traffic Safety Administrationreleased findings that suggest "substandard Chinese air bag inflators, likely illegally imported into the United States, are to blame for 10 fatalities and two serious injuries in a dozen crashes over the past three years." NHTSA is assessing whether a permanent ban on U.S. sales of the inflator is required.
• Brent crude oil prices rose 63% in March, representing the largest monthly gain on record for the benchmark since it began trading in 1988.
• In the last month, the national average price of diesel has risen by 45% to $5.50 per gallon, and regular unleaded gasoline has increased 36% to $4.08 per gallon.

Autonomous Technologies and Vehicle Software

• Certain chip architectures used for automated and autonomous vehicle functions may have significantly higher power requirements that increase the complexity of thermal management.
• GM is testing "eyes-off" automated driving in over 200 manual and supervised development vehicles ahead of a potential launch of the technology beginning with the Cadillac ESCALADE IQ in 2028.
• Complaints about malfunctions in BYD's "God's Eye"advanced driver assistance systems have led to questions about the potential ramifications of deploying vehicle technology before software execution matches hardware capabilities.
• Uberplans to invest up to $1.25 billion in Rivian through 2031 to support initiatives that include the launch of fully autonomous R2 robotaxis.
• Google is open-sourcing the Android Automotive OS software defined vehicle (SDV) platform to provide a standardized vehicle architecture and reduce complexity for OEMs.

HYBRID AND Electric Vehicles

• Teslaplans to begin shipping its all-electric semi-truck later this year.
• Nissanplans to launch its e-Power hybrid technology in North America later this year.
• GMtemporarily laid off 1,300 workers at its Factory Zero electric vehicle plant in Detroit-Hamtramck due to EV production adjustments in response to reduced demand.
• Stellantis is reported to be considering options for producing EVs at an idled plant in Brampton, Ontario with Chinese joint venture partner Leapmotor.
• Honda and Sonycanceled plans to jointly develop electric AFEELA models, amid a reevaluation of the Sony Honda Mobility venture.

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