��������

Key Legal Insights from Foley’s Automotive Team

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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

AUTOMOTIVE KEY DEVELOPMENTS

• ��������; 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 Compliance and Enforcement in Global AI Regulation: EU AI Act Risks and International Regulatory Challenges. Subscribe to get updates about new articles in this series.
• First-half 2026 U.S. new vehicle sales fell 2.8% year-over-year and reflect a SAAR of 15.9 million units, according to from the National Automobile Dealers Association. The analysis notes that direct comparisons to first-half 2025 are challenging due to “significant pull-ahead volume” as consumers purchased vehicles before tariffs were imposed.
• Edmunds new vehicle affordability pressure reached new highs in Q2: a record 24% of borrowers selected auto loans of 84 months or longer, the average new-vehicle payment reached an all-time high of $777, and 20% of buyers paid $1,000 or more per month.
• reported on �Ҳ�’s rollout of a “f��������-�Ǵ�-���ٲ�-�쾱�Ի�” manufacturing automation initiative for suppliers.
• The U.S. Senate Commerce Committee is in the coming days on the , which would ban from the U.S market the “importation, integration, manufacture, sale, and resale of connected vehicles, software, and hardware linked to China or other foreign adversaries.” The bill’s sponsors, Sens. Bernie Moreno (R-Ohio) and Elissa Slotkin (D‑Mich), referenced the importance of codifying related from the Commerce Department into law. A is pending in the House.
• provided an update on recent UAW efforts to secure significant wage gains from automotive suppliers.
• New vehicle sales within China by 20.2% year-over-year in the first half of 2026, amid reduced EV subsidies, consumer hesitancy, and market saturation in certain areas.

TRADE/TARIFFS

• ��������; Lardner partner Nicholas Ellis shared insights in the Law360 article, “,” discussing the status of the United States-Mexico-Canada Agreement (USMCA) and the implications for cross-border trade. This follows the U.S. decision to not automatically renew the USMCA in its current form for another 16 years. While the USMCA remains in force until 2036, this that include prolonged negotiations, annual reviews, or separate bilateral trade agreements within North America. Any nation in the trilateral agreement may invoke to provide six months’ notice to exit the USMCA.
• reported on the next phase of U.S. – Mexico negotiations over the USMCA. The U.S. and Mexico are to meet the week of July 20 in Mexico City. In a July 2 , Economy Minister Marcelo Ebrard indicated that Mexico’s main goals in upcoming bilateral talks include reducing Section 232 tariffs on steel, aluminum and vehicles.
• Canada-U.S. Trade Minister Dominic LeBlanc that Canada is prepared to have discussions for bilaterial trade deals. Lowering U.S. tariffs on steel, aluminum and autos remains a key priority for Canada. Formal bilateral negotiating rounds between Canada and the U.S. have not yet been scheduled.
• Ford was one of more than 1,500 companies that before last week’s with the U.S. Trade Representative seeking product exemptions from proposed levies tied to Section 301 investigations into forced labor and unfair trading practices by dozens of trading partners.
• Confirmed traffic through the Strait of Hormuz over the weekend , following the of an interim U.S. – Iran peace deal.
• The Gordie Howe International Bridge over the Detroit River is to open July 27, 2026, with the “support of the United States Government.” Canada’s Auto Parts Manufacturers’ Association (APMA) has that US$29 billion worth of American-made auto parts enters Canada in a typical year, the majority of it through Windsor.

OEMs/SUPPLIERS  

• Toyota plans to move production of its Tacoma midsize truck from a plant in Mexico to San Antonio as part of a $3.6 billion investment that will double the size of the Texas facility by 2030. The decision comes as certain automakers with operations in Mexico are expected to in the nation, amid growing uncertainty over U.S.-Mexico trade��policies.
• Chinese EV maker Leapmotor the B10 compact SUV in Mexico through ���ٱ�������Գپ���’ local dealership network. Stellantis has an approximately in the startup.
• Bosch was up to $225 million in incentives from the Department of Commerce’s CHIPS Program Office to support the up to $2 billion the company is investing to transform its Roseville, California site for the production of silicon carbide (SiC) semiconductors.
• Micron Technology signed to provide Ford and GM with automotive memory chips. This comes as semiconductor manufacturers increasingly prioritize AI data center demand, causing for other applications.
• Continental its ContiTech industrial unit to an affiliate of private equity firm Lone Star Funds for $4.6 billion. The deal reflects Continental’s pivot to become a pure-play tire manufacturer.
• Volkswagen announced to cut its model lineup by up to 50% to further reduce production capacity and costs. Germany’s automotive lobby, VDA, swift action to strengthen the European auto industry’s competitiveness amid its “ongoing crisis,” including opening domestic plant capacity to foreign manufacturers to help protect jobs.
• Mitsubishi with startup Highlanders Inc. to develop humanoid robots, with production scheduled to begin in Japan in 2027. Manufacturers of humanoid robots are expected to receive increased attention on safety measures to prevent harm to humans as the machines enter more workplaces, according to a report in .

AUTONOMOUS TECHNOLOGIES AND VEHICLE SOFTWARE

• The National Highway Traffic Safety Administration (NHTSA) called on to improve robotaxis’ ability to interact with first responders and emergency vehicles on roadways.
• NHTSA is considering ending the requirement for fully autonomous vehicles to have traditional steering wheels, according to comments made during a interview. The comments follow NHTSA’s last month to revise the Federal Motor Vehicle Safety Standards (FMVSS) to remove manual braking control requirements for vehicles built only for driverless operation.
• Forvia Hella subsidiary Ignite with Oxford Semantic Technologies to develop Hella Ignite.Drive, which utilizes “knowledge-based AI” to translate traffic laws into machine-readable rule sets for autonomous driving capabilities.
• Xpeng recently X-Mind, a framework that embeds predictive world model capabilities to autonomous driving systems, enabling vehicles to simulate near-term changes before acting.
• GM-backed Momenta raised $751 million in its , valuing the autonomous driving company at approximately $9 billion. However, a muted trading debut this month may signal investor caution about market competition, as well as the timetable for autonomous driving companies to sustain profitability.

MARKET TRENDS AND REGULATORY

• The U.S. Environmental Protection Agency (EPA) a federal court to dismiss California’s over the Trump administration’s efforts to have Congress invalidate the state’s Clean Air Act waivers.
• The U.S. Department of Justice in another lawsuit pertaining to California’s emission rules for heavy-duty trucks, asserting that the Clean Air Act prohibits states from enforcing or adopting their own emissions standards for new vehicles.
• The EPA a proposal to change pollution rules for heavy trucks that includes the elimination of Diesel Exhaust Fluid (DEF) deratements, which the agency said will restore lost productivity and save up to $6,000 on each new vehicle purchase.
• reported on NHTSA’s challenges in eliminating supplies of banned counterfeit and faulty air-bag components that may be installed during post-crash vehicle repairs. At least 10 U.S. fatalities have been linked to defective inflaters since 2023.

HYBRID AND ELECTRIC VEHICLES

• Second-quarter 2026 new EV sales declined by 20.5% YOY and accounted for 5.8% of total U.S. new vehicle sales, according to . Full-year 2026 new EV sales are forecast to drop 2.2% YOY.
• First-half 2026 conventional hybrid vehicle sales 19.4% YOY and represented 15.4% of total U.S. new vehicle sales.
• EV startup Lucid Group it hired restructuring consultancy AlixPartners to assist with improving execution and strengthening operations.
• Electric big rig startup Windrose Technology is over claims of unpaid wages and discrepancies in the production locations within trucks’ Vehicle Identification Numbers.
• Former Canoo Inc. executives reached a $20 million settlement to the bankrupt EV startup misled investors.