�鶹��ý

Key Legal Insights from �鶹��ý’s Automotive Team

Analysis by Julie Dautermann, Competitive Intelligence Analyst

�鶹��ý is here to help you through all aspects of rethinking your long-term business strategies, investments, partnerships, and technology. Contact the authors, your �鶹��ý relationship partner, or our Automotive Team to discuss and learn more. 

Key developments

• �鶹��ý & Lardner partners Vanessa Miller and Nicholas Ellis are quoted in the Law360 article, .

• U.S. 2025 new light-vehicle sales approximately 16.3 million units, up2% year-over-year, with sales attributed to the spending power of higher-income consumers. Households earning more than $150,000 annually accounted for 43% of the new cars sold last year, up from 30% in 2019. Households earning less than $75,000 comprised 26% of 2025 sales, down from 37% in 2019.

• Full-year 2025 auto sales increased 8% YOY for , 8% for , 6% for , 6% for , 0.5% for , and 0.2% for . Sales declined 13% for , 3.6% for , 3.3% for , and 3% for .

• Fourth-quarter 2025 vehicle sales , signaling potential market challenges heading into 2026. Q4 2025 sales fell 20% YOY for , 9.5% for , 7% for , 3.7% for , and 1% for . Q4 2025 sales increased 9.3% YOY for , 4% for , and 2.7% for .

• U.S. 2026 new light-vehicle sales are to range from 15.8 million units to 16.1 million units. Cox Automotive suggested that “a high 15 million level may be the new norm for the industry” due to factors that include .

• Canadian Prime Minister Mark Carney to pursue separate, near-term deals with the Trump administration to lower sector-specific tariffs, indicating negotiations would instead be part of this year’s review of the U.S.–Mexico–Canada Agreement (USMCA). Canada intends to begin formal USMCA discussions with the U.S. later this month.

• “Fragmented ownership of trade-related data is increasingly a risk” for supply chain executives, according to commentary from consultancy Alvarez & Marsal on the upcoming USMCA review and U.S. trade policy featured in .

• The U.S. Trade Representative imposing new tariffs on Chinese semiconductor imports until June 23, 2027, after affirming that ��󾱲Բ�’s “acts, policies, and practices are actionable under Section 301 of the Trade Act of 1974.”

• �ʷɰ�’s for automotive M&A in 2026 include supplier consolidation in response to “rising costs and subdued end-market demand,” as well as prioritization to “divesting non-core assets and investing in digital ecosystems.”

OEMs/SUPPLIERS  

• Announcements during CES 2026 held this week in Las Vegas included:
• Bosch to invest $2.9 billion in artificial intelligence technologies by the end of 2027. The supplier also new AI-based driver-assist systems, a partnership with Kodiak AI to develop platforms for autonomous trucks, and an expanded collaboration with Microsoft to use AI to optimize factory production.
• BMW in-vehicle AI assistant technology developed in collaboration with Amazon.
• �ѱ���������’ MBUX infotainment system AI from both Microsoft and Google.
• NVIDIA a group of AI platforms and models designed to enhance the development of autonomous vehicles.
• Companies including and announced new capabilities to enhance the development of software-defined vehicles (SDVs).
• ZF, Google, and Stellantis partner Leapmotor are among the companies that are of �ϳܲ������dz���’s chip platforms to support SDVs.
• Ford an eyes-off, hands-free driving system in 2028, beginning with a $30,000 all-electric vehicle that will be produced on the automaker’s “Universal EV Platform.”
• Lucid Motors, Uber, and Nuro their jointly developed Gravity SUV robotaxi purpose-built for Uber’s ride-hailing network.
• Hyundai to begin deploying humanoid robots at its manufacturing plant in Georgia in 2028.

• HARMAN International plans to acquire ZF Friedrichshafen’s advanced driver-assistance systems business for $1.76 billion.
• �Ҳ����ٲԱ��’s emphasized the importance of agility and adaptability, instead of reliance on scale, to mitigate the effects of ongoing market volatility.
• Hyundai geopolitical uncertainty and broadening technology adoption gaps to impact automaker profitability and intensify industry competition in 2026. Hyundai to sell 4.16 million vehicles globally this year, following 2025 sales of 4.14 million vehicles.
• provided an update on the brands expected to participate during the January 14-25, 2026 Detroit Auto Show.
• On January 5, Honda announced it a production shutdown at three Chinese factories for two more weeks due to a semiconductor shortage.

MARKET TRENDS AND REGULATORY

• The Internal Revenue Service released for auto loan interest deduction established by the “One Big Beautiful Bill Act.” The provision will allow borrowers to deduct up to $10,000 annually in interest on new vehicles for personal use if applicants meet certain criteria and the model’s “final assembly” was in the U.S.
• A January 14, 2026 U.S. Senate committee hearing on vehicle regulation and affordability that was to feature the Detroit 3 CEOs was after Ford CEO Jim Farley raised concerns related to scope and timing.
• China is still restricting U.S. exports of certain rare earth elements that are required as inputs to produce permanent magnets and other products, according to unnamed industry and government officials quoted in .

Autonomous Technologies and Vehicle Software

• Amazon Web Services and automotive technology supplier and Continental spin-off AUMOVIO generative AI to facilitate the development process for autonomous vehicles, beginning with Aurora’s self-driving trucks.
• WardsAuto created a of some of the most significant software-related vehicle recalls of 2025.
• Autonomous driving company Mobileye AI-powered humanoid robotics startup Mentee Robotics for $900 million.
• Mercedes its advanced driver assistance system (ADAS), MB.Drive Assist Pro, in the U.S. later this year. The system is considered Level 2 autonomy, by the Society of Automotive Engineers (SAE) as technologies requiring constant human supervision when the features are engaged. The automaker already offers a Level 3 autonomous system – MB Drive Pilot – in select markets for operation on limited-access highways.
• McKinsey predicts that vehicles equipped with Level 2 ADAS could comprise over 50% of global vehicle sales by 2030. Vehicles with Level 3 autonomous driving technology could represent 16% of global vehicle sales by 2035, compared with less than 1% in 2025.
• Challenges impacting the rollout of SDVs software development complexities, regulatory pressures, and .
• provided an overview of �龱��������’s plans to shift from SDVs to “AI-defined vehicles.” 
• Gartner recently that only 5% of automakers will maintain strong AI investment growth by 2029, compared to over 95% today, noting the “automotive sector is currently experiencing a period of AI euphoria, where many companies want to achieve disruptive value even before building strong AI foundations.” Gartner also stated that companies with “strong software foundations, tech-savvy leadership, and a consistent very long-term focus on AI will pull ahead from the rest, creating a competitive AI divide.”

HYBRID AND Electric Vehicles

• U.S. 2025 sales of battery-electric vehicles (BEVs) are estimated to have 2.1% YOY to 1.27 million units.
• The percentage of light-vehicle models available with hybrid technology in the U.S. has since 2020.
• Tesla 1.64 million battery-powered EVs worldwide in 2025.
• BYD 2.26 million battery-electric vehicles and 2.29 million plug-in hybrid EVs globally in 2025.
• Honda LG Energy Solution’s stake and related assets from the companies’ Ohio EV battery joint venture plant for $2.9 billion.
• ��󾱲Բ�’s Xiaomi to sell 550,000 EVs globally in 2026, up from 410,000 in 2025.
• Volkswagen of America the ID.Buzz electric minivan for the 2026 model year in the U.S., citing low sales volumes and the impact of tariffs.