Brainwaves: 100 Days and Beyond | Presidential Policy Shifts Impacting Automotive

In a recent Brainwaves event hosted by the Society of Automotive Analysts and Foley & Lardner LLP, titled “100 Days and Beyond: Presidential Policy Shifts Impacting Automotive,” business and legal executives gathered in Detroit to discuss the significant shifts in presidential policies and their profound impact on the automotive sector. Anne Marie Uetz—the Vice Chair of Foley’s national litigation department—moderated a panel of industry experts, including Jason Puscas, the former Chief Administrative Officer, General Counsel, and Corporate Secretary of Bollinger Motors, Mario Spota, the Director of Manufacturing Excellence at Harman International, and Steve Wybo, the Senior Managing Director of Riveron Consulting, to facilitate meaningful dialogue about what companies can do amidst growing uncertainty and turbulence.

While the experts discussed various topics, from the unclear trajectory of the electric vehicle (EV) market to navigating increasing tariffs, core themes stood out: manufacturers and suppliers must support each other now more than ever, intimately understand their dynamic cost structures, and remain nimble and adaptable in the face of rapidly shifting policies. Here are some takeaways:

EVs: A Rocky Road Ahead

The panel highlighted the challenges facing the EV industry, emphasizing that government policies are driving EV sales volumes more than traditional automakers. EV manufacturers are particularly concerned about the potential revision or repeal of federal programs, such as the National Electric Vehicle Infrastructure (NEVI) program and EV tax credits. The suspension of the NEVI program, which allocated $5 billion over five years to install EV chargers across the country, has created deep uncertainty in the market. Additionally, policymakers will likely implement changes to the 30D consumer tax credit and the 45W commercial EV tax credit, if not eliminate them altogether.

The outlook for EVs remains bleak, with the experts predicting launch delays to persist for the next two years. Capital markets for EVs are frozen, and EV suppliers will likely consolidate. Consumer EV penetration is projected to stay flat until infrastructure improves and production and purchase costs decline. That being said, commercial EVs could have more potential for growth.

Tariffs and Their Implications

Tariff policies are another area of concern. The industry is bracing for an “on-and-off” tariff environment, which requires suppliers to be agile and prepared. Understanding the entire manufacturing footprint, supply chain visibility, and workforce locations are crucial steps for suppliers to mitigate the impact of tariffs. The financial health of auto suppliers is already strained, and the added burden of tariffs could exacerbate the situation.

The Role of Data and Strategic Planning

In this volatile environment, data-driven decision-making is critical. Companies must model scenarios for their manufacturing footprints, logistics, and workforces to navigate the evolving landscape. When seeking to renegotiate key terms with manufacturers, suppliers must have data ready and approach their customers with concrete facts. The experts emphasized the importance of understanding the origins of raw materials and the entire supply chain.

Themes and Policies on the Horizon

The panelists also touched on several themes and policies that could significantly impact the automotive industry in the near future. These include:

Auto Manufacturing and Relocation: Given the political turbulence and Mexico’s skilled and abundant workforce, manufacturers will not likely relocate the production of existing products from Mexico to the U.S. in the foreseeable future. However, new product launches in the U.S. are more feasible to domesticate.
U.S.-China Joint Ventures: The Trump administration could support U.S.-China joint ventures in the U.S., as long as the entity is majority-owned by a U.S. company.
Tech and IP Restrictions: Policymakers may further restrict the exchange of technology between the U.S. and China, limiting tech development in China.
SUVs and Pickups: SUVs, pickups, and crossovers will continue to dominate the U.S. market, but there may be a push to simplify or eliminate features of larger vehicles to lower prices.
Autonomous Vehicles: Expect commercial launches for autonomous vehicles to service certain routes and regions, particularly in Texas.
EcoVadis Score: Manufacturers may rely on ESG-related metrics to select suppliers and reduce risk in sourcing decisions.
Industry 4.0/Connected Factories: Automakers’ sourcing decisions will increasingly focus on technology to boost the accuracy of market predictions and increase visibility into production and quality.

The Road Ahead

The automotive industry is at a crossroads, facing a complex and uncertain future. The insights from the Brainwaves event underscore the need for companies to stay alert and adaptive, expand their supply chains, develop larger inventories, study their contracts, and explore options to renegotiate critical terms.

Brainwaves 2025 Mini Mic

How do companies navigate the impact of tariffs on supply chains? What are the biggest challenges facing EVs? What does the future look like for domestic manufacturing and offshore production? We address these big questions with our mini-mic. Watch here:

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