Foley Automotive Update - June 2026

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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KEY DEVELOPMENTS

• Foley & Lardner announced the launch of its 2026 AI in Manufacturing & Supply Chain Series, a new initiative to help industry participants identify and manage the legal risks and business strategies arising from the profound shifts and innovations reshaping manufacturing and supply chain operations. The most recent article in the series is Legal Considerations for IP in Smart Manufacturing: Data Ownership, Trade Secret Risks, and Patenting AI-Assisted Inventions. Subscribe here to get updates about new articles in this series.
• U.S. new light-vehicle sales are projected to reach a SAAR of 16.3 million units in May, representing an increase of 5.8% year-over-year, according to a joint forecast from JD Power and GlobalData. The analysis notes that year-over-year comparisons remain challenging, as May 2025 results were lowered by accelerated purchases in the two preceding months in response to U.S. import tariffs. Total global sales in 2026 are forecast to decline 1.1% YOY to 91.1 million units, due to market challenges that include the ongoing conflict in the Middle East, and weakened sales within China.
• Plante Moran’s 2026 North American Automotive OEM-Supplier Working Relations Index® (WRI®) Study revealed overall improvements across all six North American OEMs for the first time in the study’s history. Toyota and Honda are in the top two positions, followed by GM, Nissan, Ford, and Stellantis.
• Foley & Lardner provided an update for multinationals pertaining to new rules for Section 232 tariffs on steel, aluminum, and copper derivatives.
• The Justice Department filed notice on May 29 announcing plans to appeal a Court of International Trade order that granted all U.S. importers the ability to seek refunds on IEEPA tariffs that were deemed unlawful by the U.S. Supreme Court.
• The U.S. Court of International Trade will not stay its ruling prohibiting the collection of Section 122 10% global tariffs for certain plaintiff importers while the judgment is appealed, according to a report in Law360. This follows a federal appeals court’s temporary stay on a decision that had found global tariffs imposed by President Trump under Section 122 of the Trade Act were unlawful.
• The Trump administration is reported to be considering a proposal that would require 50% of the components and materials in an automobile to be produced by U.S. sources in order to qualify for preferential treatment under the United States-Mexico-Canada Agreement. The agreement currently requires 75% of a vehicle’s materials to come from North American sources to avoid certain tariffs and qualify for USMCA preferential treatment.
• A May 2026 report from the National Association of Manufacturers (NAM) called for the swift renewal of the USMCA, while recommending process improvements in areas that include protecting cross-border investments, securing critical mineral manufacturing inputs, and strengthening certain USMCA provisions to “discipline the behaviors of state-owned enterprises.”
• Over a dozen Democratic U.S. senators urged the U.S. Trade Representative to prioritize concerns during the USMCA review that include preventing the offshoring of U.S. manufacturing jobs to Mexico, strengthening the enforcement of labor laws in Mexico, and addressing increased Chinese investment in Mexico and Chinese expansion in North American supply chains.
• Automotive analysts assessed how USMCA negotiations may be affected by trade agreements that established certain levels of U.S. import tariffs on vehicles and parts from the European Union, Japan, and South Korea.
• The European Union finalized the text of its trade deal with the U.S., clearing a significant hurdle ahead of President Trump’s threatened July 4, 2026 deadline to raise tariffs on European automobiles if the agreement is not finalized. The European Parliament and EU countries are expected to vote to ratify the finished text later this month.
• U.S. automakers and dealerships may encounter higher prices and shortages of synthetic motor oils due to supply constraints resulting from the Iran war, according to the Independent Lubricant Manufacturers Association.

OEMs/SUPPLIERS

• Volvo received authorization from the U.S. Office of Information and Communications Technology and Services to import and sell cars with connected vehicle technology. A Commerce Department rule that went into effect on March 17, 2025 restricts the import and sale of connected vehicles and related hardware and software linked to China with a phased approach beginning with the 2027 model year. Volvo has several production plants in China and it is majority-owned by Zhejiang Geely Holding Group.
• The U.S. auto industry is at risk of becoming less competitive in global markets due to certain trade and policy decisions that emphasize the domestic market.
• GM plans to move production of the Chevrolet Groove and Aveo away from China joint venture plants to its Ramos Arizpe production site in Mexico beginning in 2027. GM employs more than 23,000 workers across four manufacturing complexes in Mexico.
• Novelis’ largest aluminum plant is on track to resume production in June, following two fires last fall that have disrupted supplies for certain automakers.
• Stellantis announced a $70 billion five-year strategic plan that will include the launch of 11 new commercial vehicle models by 2030, as well as nine new vehicle models in the North American market priced under $40,000.
• One million prospective buyers have avoided purchasing a new vehicle since the start of the decade due to persistently high prices, according to a report in The Wall Street Journal. Automakers are expected to continue pursuing higher profits by selling fewer, more expensive trucks and SUVs.

AUTONOMOUS TECHNOLOGIES AND VEHICLE SOFTWARE

• Waymo will deploy a new autonomous vehicle purpose-built specifically for robotaxi use in partnership with Zhejiang Geely Holding subsidiary Zeekr. Public rides will begin in parts of San Francisco, Los Angeles, and Phoenix.
• Tesla announced the launch of its full self-driving system – or FSD Supervised – in several countries that include China.
• BYD revealed a 4 nanometer autonomous driving chip at its technology day in China. The automaker plans to invest over $14 billion in intelligent technology R&D over the next three years.
• Mercedes plans to launch its MB.Drive Assist Pro assisted driving system incertain German cities later this year. This will follow the availability of a limited version on certain CLA models in the U.S., and the 2025 debut on Mercedes models in China. The SAE Level 2 system – which requires driver supervision at all times – was described as a more cost-effective replacement to the automaker’s SAE Level 3 Drive Pilot autonomous technology.

MARKET TRENDS AND REGULATORY

• Certain U.S. refineries are reported to be prioritizing the production of jet fuel and reducing gasoline output in response to global supply constraints caused by ongoing shipping instability in the Strait of Hormuz. This may contribute to higher gasoline prices during the peak summer travel period.
• Used-car retailer Carvana is testing an expansion into new-car sales by acquiring certain Stellantis dealerships and selling vehicles online.
• The BUILD America 250 Act, a bipartisan five-year surface transportation reauthorization, includes a proposal to impose annual registration fees on battery electric and plug-in hybrid electric vehicles to support highway funding. The bill introduced by U.S. House lawmakers on May 19 also directs the Department of Transportation to establish performance-based safety standards for certain automated driving system-equipped commercial motor vehicles operating in interstate commerce.
• The Environmental Protection Agency proposed delaying stricter emissions standards for light- and medium-duty vehicles until model year 2029.

HYBRID AND Electric Vehicles

• Toyota halted development of a new EV for its Lexus brand due to a broader review of new projects and weak consumer demand.
• Hybrids are a fast-growing vehicle segment in the U.S., having nearly tripled their share in the last three years to 20% of total U.S. new-vehicle sales.
• Retail sales of passenger new energy vehicles (NEVs) in China year-to-date through mid-May are down 16% YOY. The decline was attributed to an increasingly saturated market, reduced subsidies, and weak consumer spending.
• In the first four months of 2026, hybrid-electric models were the top choice among European Union consumers, accounting for 38.2% of the total new-vehicle registrations, followed by petrol and diesel cars (30.2%), battery-electric vehicles (19.7%), and plug-in hybrid electric vehicles (9.6%). Chinese brands accounted for 15% of BEV sales in Europe in April.

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