Major Automotive Global Trends - August 2025

Global

Following the new trade deals signed in July, the US trade partners now understand their meaning

At the end of July, the global capital markets welcomed the signing of new trade agreements by the US's major trading partners with the Trump administration. These agreements included imposing tariffs of 15% on their exports to the US instead of at least 25%, as the administration had threatened. The auto industry also welcomed the agreements with a sigh of relief, expecting they would bring certainty to the future.

However, the "side commitments" for investments in the US were soon revealed, which the partners were forced to sign to please the Trump administration. South Korea pledged to invest $350 billion in the US in the coming years, of which about $150 billion is in a joint fund for shipbuilding in the US, and $200 billion for the establishment of factories in the fields of semiconductors, biotechnology, and more.

The Japanese government also agreed to establish a $550 billion investment fund in the US, promising to invest in key strategic industries such as automobiles, energy, semiconductors, critical minerals, and shipbuilding. As part of the agreement, the US will receive 90% of the profits from joint projects.

Meanwhile, the EU, having no other choice, compromised and agreed to invest about $600 billion in the US in the coming years and significantly increase purchases of energy and military equipment.

Presumably, these are WIN-WIN agreements, but analysts agree that behind the scenes, the Trump administration is the main beneficiary of them, and the agreements are expected to strike a particularly hard blow to the auto industries of the trading partners.

Analysts note that vehicles account for about 30% of total Japanese exports to the US, and in 2024, vehicle exports from Japan to the US amounted to about 1.37 million units. Under the new trade agreement signed in July, the US will now impose a tariff of "Only" 12.5% ​​on car imports from Japan, which will be added to the previous tariff, which stood at 2.5%, for a total of 15%.

However, no final date has yet been announced for the implementation of the "Reduced" tariff, so Japanese automakers will continue to pay a tariff of 25% in the meantime, as set in April. In August, Japanese media estimated that each month of delay in reducing tariffs would cost Japan's seven largest automakers about 100 billion Japanese yen. Japanese automakers are already expected to record a cumulative loss of about $18.4 billion in fiscal year 2025 (April 2025-March 2026). The operating profits of the leading Japanese automakers are expected to fall by 36% cumulatively.

The Korean auto industry is also not necessarily benefiting from the agreements as expected. In 2012, the US and South Korea signed a free trade agreement that, among other things, eliminated import tariffs on Korean-made vehicles with a capacity of less than 3 liters. However, tariffs on imported Korean vehicles have now increased from zero to 15%, which places the Korean industry at a competitive disadvantage and forces it to reorganize its production and export system.

Since automobile exports to the US account for more than a third of South Korea's total exports, the tariffs have a significant impact on the local auto industry. If competition with Japanese and German automakers intensifies, Korean manufacturers' profit margins could fall to negative levels, putting pressure on the entire South Korean economy.

The “Collateral damage” of trade agreements has not escaped the EU either. Between 2000 and 2024, the average US tariff on EU products, including cars, was only about 2%. Now, the tariff is about 15%, much lower than the 30% that Trump has threatened to impose on the EU, but still significant.

The German Automotive Industry Association said in August that even with a tariff of “Just” 15%, German automakers would still have to absorb additional costs of billions of dollars a year. BMW, VW, and other automakers even issued a joint statement saying that a 15% tariff would increase the cost of German car exports to the US by 23%.

About 75% of all vehicles manufactured in Germany have been exported in recent years (a significant portion of them to the US). This fact makes the German automotive industry particularly vulnerable to trade barriers. German automakers already suffer from low profit margins, and their ability to absorb the impact of tariffs is limited. The impact of the American tariffs was first felt in the financial statements of the major German automakers, which showed a sharp decline in profits in the first half of 2025 and a corresponding decline in cash flow.

The problem is not only for German manufacturers, as data from the European Automobile Manufacturers Association shows that in 2024, European automakers exported cars to the US with a total value of 38.4 billion euros.

This fact makes the American market vital for the EU. It should be noted that in late August, additional agreements between the EU and the US were reached (see separate news item to follow).

New McKinsey study: the number of EV charging points globally is expected to surpass 200 million by 2040

A new cross-sector study by consulting firm McKinsey estimates that, despite delays, the global EV charging infrastructure is set to expand on a large scale. According to the study, between 2026 and 2040, the number of EV charging stations worldwide is expected to grow at a compound annual growth rate of 12.3%, reaching 206.6 million by the end of 2040.

Home chargers will continue to be the mainstay of the charging market, with an estimated 133 million installations worldwide by 2040. To support this growth, annual spending on EV charging infrastructure is set to grow steadily by 8% per year, reaching $300 billion by 2040.

The study states: “Level 2 home chargers dominate the global market, with two out of every three EV charging points worldwide expected to be of this type by 2050… Their key advantage lies in an optimal balance between convenience, performance, and economy”.

While the public charging network will continue to expand, its growth rate will be significantly slower than that of home charging facilities. The researchers estimate that as the use of public charging stations increases and the operational efficiency of the infrastructure improves, the ratio of fully-charged EVs to the number of public charging stations is expected to increase significantly from 7.5 in 2025 to 14.2 by 2040.

Regionally, the study states that China will continue to lead the world in public charging infrastructure, with DC fast charging expected to grow at an annual rate of 10% in the Asia-Pacific region between 2025 and 2040. Capital spending in the region will focus on Level 3 public chargers and Level 2 home chargers, reaching $54 billion and $33 billion, respectively.

India is becoming one of the world’s fastest-growing markets for charging infrastructure. Driven by strong government policies and rapid growth in EV adoption, the number of direct current (DC) chargers in India is expected to increase from 14,000 today to 1.1 million by 2040.

In the US, despite the challenges, the public fast-charging market is expected to expand at an annual growth rate of 14%, reaching 475,000 charging stations by 2040 and generating $3.3 billion annually. South America is also expected to grow rapidly as EV adoption increases. Home charging infrastructure in the South American region is expected to grow at an annual growth rate of 22%. Level 2 home chargers will dominate the market, reaching $11.2 billion by 2040.

The study notes that Europe’s public charging infrastructure is rapidly developing and is expected to maintain a CAGR of 11.3% through 2040, with DC fast chargers experiencing a significant CAGR of 13.7%. The number of AC home chargers in the EU is expected to exceed 57 million, and the commercial charging sector is also expected to maintain a CAGR of 12%.

Rho Motion research firm: global EV sales grew by 21% in July, but the growth rate slowed down, mainly due to the Chinese market

In August, market research firm Rho Motion reported that global sales of fully electric and plug-in vehicles rose 21% in July compared to July last year to 1.6 million units. This marks the slowest growth rate since January of this year, representing a decrease from the 24% increase recorded in June. The slowdown was mainly affected by the weakening growth of the plug-in vehicle market in China.

China, the world's largest auto market, is responsible for more than half of the world's electric and plug-in vehicle sales. However, growth in sales of these vehicles in China slowed to just 12% in July compared to an average monthly rate of 36% in the first half of the year. This slowdown was due to the suspension of several government and local subsidy programs for the purchase of EVs and plug-in vehicles.

However, other markets appear to be filling some of the gap created by the Chinese market. The European market is benefiting from incentives aimed at accelerating carbon emissions reductions and is seeing a significant increase in EV sales.

According to the study, in July of this year:

• EV sales in the Chinese market stood at about 1 million units.

• EV sales in the European market increased by 48% year-on-year to about 390,000 units.

• EV sales in the North American market increased by 10% year-on-year to 170,000 units.

• EV sales in other parts of the world jumped by 55% year-on-year to pass the 140,000 unit mark.

The research firm says that despite regional differences, EV adoption in 2025 is still on a strong upward trend. BEV and PHEV vehicle sales in China are expected to resume their growth starting in August with the start of a new wave of subsidies. Still, on the other hand, demand for them in the US will be affected by the cancellation of tax credits for the purchase or leasing of new EVs at the end of September.

USA

Following the ruling of the federal court, the US renews its subsidies for EV charging station installations

In February of this year, the Trump administration's Department of Transportation announced an immediate halt to billions of dollars in subsidies for the construction of charging stations in the US. As a result, an appeal was filed in a US federal court against the decision by elements in the American charging market, who were facing serious damage to their businesses. In August, a federal court ruled against the freeze, and the administration was forced to publish new guidelines, which clarified how the various states in the US can use federal funds to promote the construction of charging facilities for EVs.

The US Department of Transportation said the new guidelines will simplify the application process, reduce bureaucracy, and allow states to apply for up to $5 billion in funding to build charging infrastructure in their territories. However, the subsidy program will be phased out in 2026.

The administration’s latest policy also eliminates several previous social requirements, including prioritizing EV charging stations in weakened communities and using unionized workers to build charging facilities. The new guidelines also remove the requirement that states incorporate “Consumer protection, emergency evacuation planning, environmental location, disaster resilience, and topographical considerations” into station deployment plans. They also no longer require US states to develop disaster and extreme weather resilience strategies.

Under the new guidelines, states can decide how to place federally funded fast-charging stations on their highways. Previously, a “Charging corridor” was defined as a highway with charging stations no more than 50 miles apart. Only after meeting this requirement could states use funds from the National Electric Vehicle Infrastructure Program for charging projects off major highways. This definition has now been removed.

The plan to build charging infrastructure for EVs in the US was originally included in the bipartisan Infrastructure Act, signed by former US President Biden in 2021. The Federal Highway Administration halted the plan in February of this year as part of a series of actions by the Trump administration to cut government support for introducing EVs to the US. The federal court accepted the argument that the suspension of the infrastructure plan by the Department of Transportation constituted an excess of its administrative authority and interference with the decision of the US Congress.

The American administration threatens to impose a 100% tariff on imported chips, unless factories are built in the US

In August, US President Trump announced that he would impose a 100% tariff on imported semiconductors and chips, except for chips from companies that set up factories in the US. This is part of the administration's efforts to encourage multinational companies to manufacture in the US. According to the president, "We are going to impose very high tariffs on chips and semiconductors. But the good news for companies like Apple is that if they build factories in the US or commit to building factories in the US, they will not have to pay the tariffs". This was said after Trump announced that Apple had committed to investing an additional $100 billion in the US over the next four years, in addition to its previous commitment of $500 billion. The specific details of the program are still unclear, and the extent of production in the US required of multinational companies to receive the exemption has not yet been announced.

Analysts note that chips and semiconductors have become critical components in almost every industry, especially the automotive industry, which uses dozens of them in every modern vehicle. The global automotive industry, including the American one, has so far benefited from a supply of cheap chips, manufactured in countries where the cost of production is low, and the transfer of production to the US may provide an additional boost to increasing production costs. On the other hand, the move may improve the availability of chips for the American and Western automotive industry if the global supply chain is damaged in the future due to geopolitical tensions.

Several leading chip manufacturers, including TSMC from Taiwan, which is the world's largest chip company, have already committed to producing certain chips in the US, including products with automotive relevance. The company has already committed to investing $165 billion in the US this year.

In April, Nvidia, which is the world's most valuable company, also announced plans to invest $500 billion in artificial intelligence infrastructure in the US over the next four years. Meanwhile, in June, Global Foundries pledged to invest $16 billion in expanding its semiconductor manufacturing facilities in New York and Vermont.

The Trump administration raised tariffs on imports from Canada and extended the existing tariffs on Mexico by 90 days

In late July, US President Trump signed an executive order raising tariffs on Canadian goods imported into the US from 25% to 35%. The order went into effect on August 1, but exempts goods covered by the US-Mexico-Canada Agreement (USMCA). Since most cross-border auto trade between the two countries is covered by that agreement, the impact of the new tariffs on the industry is expected to be minimal. Vehicles manufactured in Canada and imported into the US will still be subject to a tariff of up to 25%, as set in April, but the tariff rate will be reduced based on the amount of components made in the US.

The White House said that Canada "Failed to cooperate effectively with the US and imposed retaliatory tariffs on American goods imported into Canada in retaliation for US trade moves". Therefore, the tariffs were raised "To effectively address the current crisis".

Canadian Prime Minister Mark Joseph Carney said Trump's move was disappointing, but Canada remained committed to the trade agreement (USMCA) and would work to expand its trade partnerships. He said, “While the average US tariff rate on Canadian goods under the USMCA remains one of the lowest of all its trade partnerships, other sectors of the Canadian economy – including lumber, steel, aluminum and automobiles – have been hit hard by the tariffs.”

In addition, in late July, Trump extended the current 25% tariff on imports from Mexico for 90 days after a talk with the Mexican president. After the talk, Trump posted on social media: “The complexity of the trade agreement between the US and Mexico is different from that of other countries due to issues related to their shared border.”

Mexico’s Ministry of Economy said that about 85% of goods exported from Mexico to the US meet the original rules set out in the US free trade agreement and are therefore exempt from the 25% tariff. However, Trump said that the US will continue to impose a 50% tariff on steel, aluminum, and copper made in Mexico and a 25% tariff on Mexican cars and goods that do not comply with the free trade agreement between the US, Mexico, and Canada. In addition, the administration announced that Mexico had agreed to immediately eliminate many trade barriers that are not related to tariffs.

Europe

ACEA president criticizes the plan to ban the selling of ICE cars from 2035 and calls the EU commission to “Face reality”

The friction between the European car industry and the European Commission over the EU’s long-term environmental policy continues. In August, Mercedes-Benz CEO Ola Källenius, who is also the current president of the European Automobile Manufacturers’ Association (ACEA), joined the critics. He criticized the EU’s plan to ban the sale of cars that emit carbon dioxide from 2035. The 2035 target is due to be reviewed again this year, and many industry leaders are calling for substantial changes.

Supporters of the plan say it is important for Europe to meet its strict environmental target. Opponents argue that the plan will exacerbate the challenges facing the European car industry, including shrinking demand, competition from Chinese automakers, and slower-than-expected growth in the EV market.

In an interview with German media, Kallenius said: "We have to face reality or we will be in serious trouble". He said the European car market "Could collapse" if the ban is implemented, and he believes that millions of consumers will rush to buy petrol or diesel vehicles before the ban comes into force, which will have the opposite effect.

He called for tax incentives and lower electricity prices at charging stations to encourage consumers to switch to EVs. "Of course, we need to reduce carbon emissions, but this must be done in a technology-neutral way, and we cannot forget our economy."

In March this year, the European Commission, the executive arm of the EU, reiterated its commitment to achieving a target of zero CO2 emissions per kilometer for new cars sold from 2035. At the time, the Commission stated that it would “Accelerate preparations for the review of CO2 emission standards for cars and trucks”.

The EU and the US published a joint statement that may lead to a reduction in auto tariffs

In late August, the US and the EU issued a joint statement on advancing the implementation of their trade agreement. The statement detailed plans that could reduce US import tariffs on vehicles manufactured in the EU and open the door to new tariff exemptions on steel and aluminum products. The joint statement is another step beyond the preliminary trade agreement that the US and the EU announced a month ago. Among other things, it sets out specific targets that the EU will have to achieve in order to receive tariff reductions on vehicles, pharmaceuticals, and semiconductors.

According to the statement, once the EU “Formally proposes” the necessary legislation to implement the promised tariff reductions, the US will initiate its own legislative process to reduce tariffs on vehicles imported from the EU. A preferential tariff of 15% on European car imports, which is lower than the 27.5% previously imposed by Trump, will take effect the same month the legislation advances.

EU senior officials have estimated that the measures could be implemented within weeks. A US administration official said the “Legislative trigger” was intended to ensure that the EU meets its commitments to reduce tariffs, while putting pressure on the 27 EU countries to get the political approval needed to push through policy changes.

The Trump administration has already announced a flat 15% tariff on most European goods, about half the 30% tariff it had previously threatened. However, the US administration has pledged to apply that lower rate to cars and auto parts only if the EU formally proposes legislation to eliminate a range of tariffs on US industrial products and grant “Preferential market access” for some US seafood and agricultural products.

Regarding steel and aluminum, the joint statement said that the EU and the US "Intend to consider cooperation to protect their markets from overcapacity, while ensuring the security of their mutual supply chains". The statement also proposed imposing quotas on exports of steel, aluminum, and their derivatives to the US, which would allow for tariff reductions. It will be recalled that in July of this year, the Trump administration insisted on imposing a 50% tariff on metals imported from the EU, claiming that it would reduce the US trade deficit with Europe and increase federal revenue.

Italy approved new 700 million US$ subsidies to encourage EV penetration

In early August, the Italian Ministry of Environment and Energy Security announced that due to the failure to meet national targets for EV sales, the Italian government had approved a new subsidy program worth almost 600 million euros (about $698 million) to promote EV sales in the country.

Under the program, private buyers will receive subsidies of up to 10,000 euros per vehicle, while small businesses purchasing electric commercial vehicles will be able to benefit from a subsidy of up to 20,000 euros. This amount is intended to cover up to 30% of the total price of a new electric passenger car or electric commercial vehicle. The funding will come from the European Union’s special aid fund and is limited to individuals or companies in large urban areas of the country.

To be eligible for the subsidy, applicants must bring an internal combustion engine (ICE) vehicle manufactured in 2015 or earlier and with an emission standard not higher than Euro-5 for scrapping. In July this year, the market share of fully electric models (BEV) in the Italian car market increased slightly. However, it was still very low compared to other countries (around 6% compared to an average of around 16.7% in the EU as a whole). In contrast, plug-in vehicles accounted for 7.5% of total sales, a share almost double compared to last year, resulting from the accelerated penetration of plug-in models made in China.

This is the second move of its kind in Europe after the UK government recently announced a new private EV subsidy scheme, offering a £1,500 discount for eligible models.

The British government will extend the subsidy plan for electric trucks, vans, and pickups until 2021

After the British government announced in July that it would renew subsidies for private EVs, the government announced in August that the subsidy program for electric trucks, vans, and commercial vehicles would also be extended until at least 2027. The amount of the subsidies for 2026 and 2027 has not yet been confirmed, but in the UK, it is estimated that they will be higher than before.

The government has already extended the subsidy program for electric vans and trucks in the past, and the last time was at the beginning of the year when it announced that it would continue the subsidy until April 2026. Now, the government has announced that the subsidy will continue until at least 2027. The new subsidy amounts will be announced soon. The subsidy until 2027 will come from a £650 million (approximately €753 million) fund, established by the government to promote EVs and improve charging infrastructure in the UK. The fund will also finance the direct subsidy for the purchase of a private EV (maximum £3,750, or €4,340, per vehicle) announced earlier this month.

In the current financial year, which runs from April 2025 to April 2026, the government has allocated £120m (around €139m) to its subsidy scheme for electric trucks, vans, and commercial vehicles. The subsidy for vans and commercial vehicles currently amounts to a maximum of £2,500 (around €2,895) for vans weighing up to 2.5 tonnes and up to £5,000 (around €5,790) for larger models weighing up to 4.25 tonnes.

The current requirement for subsidies is that the models can travel at least 60 miles without emissions, so plug-in commercial vehicles are theoretically also eligible for the subsidy (although there are currently none on the market). In the truck sector, the scheme allocates a subsidy of a maximum of £16,000 (€18,530) for small trucks and up to £25,000 (€28,950) for large trucks.

The scheme also includes subsidies of up to £4,000 (€4,630) for taxi drivers who switch to plug-in vehicles, as well as a £500 (€580) subsidy for electric motorbikes. In April, the government also increased the subsidy cap for wheelchair-accessible plug-in vehicles from £35,000 to £50,000 (€57,900).

In a statement, the government said the continued subsidy was another vital step in accelerating Britain’s transition to cleaner transport. “Every electric car added to the road means healthier communities and new economic opportunities across the country”.

China

For the first time, Chinese EV industry investments overseas surpass local investments

A research report, published in August by the research firm Rhodium Group, shows that in 2024, overseas investments by companies in the Chinese EV industry exceeded investments in China itself for the first time. This is despite the fact that many overseas projects are currently facing higher costs, delays, and risks.

According to the study, in 2024, Chinese companies, which are part of the EV supply chain, invested about $16 billion abroad, mainly in battery manufacturing infrastructure. This is compared to about $15 billion, which was invested in China itself. The researchers note that the figure marks a "Historic change in the investment landscape of China's EV industry". In the not-so-distant past, almost 80% of investments in the industry were concentrated in the domestic market.

The change stems from excess production capacity in the domestic Chinese market and prolonged price wars, which have damaged profit margins throughout the supply chain and accelerated the globalization of Chinese auto companies. At the same time, they are required to make substantial investments to circumvent high tariffs imposed in Europe and the US, and to meet the growing demands of foreign customers to increase local production by establishing production bases.

According to the researchers, "The fact that overseas investments by Chinese companies in the EV industry exceed their domestic investments indicates the saturation of the Chinese market and that overseas expansion has strategic value for them because it can generate higher returns".

About 75% of all overseas investments by Chinese auto companies have come from the battery and battery components sector. Large Chinese manufacturers such as CATL and Guoxuan High-tech are currently driven primarily by high shipping costs and overseas customers’ demand for shorter delivery times. As such, they are adopting tactics similar to Tesla’s in expanding into overseas markets.

In June, for example, CATL, the world’s largest EV battery maker, announced that overseas expansion had become a “Top priority” due to fierce competition in China’s domestic auto market. BYD, China’s largest EV maker, also currently operates plants in Brazil and Thailand and plans to build plants in Turkey and Indonesia, whereas Chery plans to invest $1 billion in an electric vehicle plant in Turkey.

However, the researchers note that overseas projects involve higher costs, longer construction periods, and greater regulatory and political risks than in China. According to the study, only 25% of EV manufacturing projects announced abroad have actually been completed. This compares to 45% of projects in China. Battery factories in China are typically built within 3 to 12 months, while similar factories abroad take 10 to 24 months to build.

China tightens governmental supervision on “Smart” driving technologies

In August, several Chinese regulatory agencies and ministries issued a draft of new regulations aimed at “Strengthening the supervision, management and promotion of recalls and supervision of the production and operation of smart and connected EVs”. The deadline for public feedback is September 15, 2025.

The draft mainly covers four aspects of the production and operation of such vehicles, of which China is considered a global leader: expanding defect investigation and recall management of smart vehicles; strengthening supervision of their production consistency; increasing supervision of corporate transparency and commercial behavior associated with such vehicles, such as software updates and price wars; and strengthening the reporting and in-depth investigation of incidents and accidents involving smart vehicles.

The draft states that manufacturers of such vehicles in China will now be required to display safety instructions for using the driver assistance system in prominent places within the vehicle app, the vehicle’s interactive information system, and the user manual. This is to make it easier for consumers to read, understand, and operate the system correctly and to prevent them from confusing “Driving assistance” functions with automated driving functions.

The draft explicitly requires car manufacturers to avoid implying to consumers, in advertisements or other marketing, that the driver assistance systems can be considered autonomous driving systems, or that they have features that they do not actually have. The companies will be required to disclose to consumers true and comprehensive information regarding the level of driving automation, the system’s capabilities, and its limitations.

The draft also emphasizes that all activities to upgrade the software in the vehicle remotely via OTA will not be carried out without government approval. Software versions that have not been fully tested and verified will not be transferred to users, and defects will not be hidden via OTA. This is to ensure that smart, connected EVs equipped with advanced driver assistance systems are compliant with the vehicle’s original standards and features, which have received government approval.

In addition, the government aims for car manufacturers to promptly report safety incidents and accidents that occur during the use of smart driver assistance systems.

Canada

ZE vehicle sales in Canada dropped 35.2% compared with last year

In January of this year, the Canadian government’s incentive program for buyers of zero-emission vehicles (ZEVs), mainly EVs, came to an end. The program previously included a subsidy of up to CAD 5,000, which was awarded according to various criteria. Following the end of the program, the Canadian auto market entered “Standby mode” and ZEV sales fell sharply.

In June, which was the fifth consecutive month of decline in sales in the electric segment in Canada, the electric and plug-in vehicle segment recorded a 35.2% year-on-year decline. This, despite the growth of about 6% in overall sales in the auto market that month.

In June, zero-emission vehicles accounted for only 7.9% of all new car sales in Canada, compared to about 13% in the same period last year. The share was significantly lower than the monthly peak of almost 20%, recorded in December last year.

Experts warn that unless the Canadian government restores subsidies, sales of the country's "Green" vehicles will not recover anytime soon. They say that unless a better balance is struck between green vehicle prices and the Canadian government's willingness to invest in the transition of the vehicle market to EVs, the country will struggle to meet its environmental goals.

Since the election, held in April, the Canadian government has promised to renew the subsidy program but has yet to formulate a specific timetable.

South Africa

A wave of layoffs and factory shutdowns in the South African auto industry

In August, the Minister of Trade, Industry, and Competition of South Africa announced that the local automotive industry is in difficulties due to the closure of many companies and the layoffs of thousands of workers. The main reasons are slower-than-expected sales of locally manufactured cars, a huge influx of imported vehicles, mainly Chinese, and a low level of localization.

According to the minister, sales of locally manufactured cars in South Africa reached 515,850 units last year - far below the target of 784,509 units, set in the South African Automotive Industry Master Plan.

The South African car market has long been dominated by brands such as VW, Toyota, and Mercedes-Benz, with about 64% of cars sold in South Africa being imported. In addition, the level of localization of the South African automotive industry - defined as the use of local production, labor, and parts - has remained constant at 39%, far from the target of 60%.

The tariffs imposed by the Trump administration this year have also had a significant impact on South African auto exports, which totaled R28.7 billion (about $1.64 billion) last year. According to the minister, “The cumulative pressures have led to the closure of 12 companies in the South African automotive industry in two years, resulting in the loss of more than 4,000 jobs.”

South Africa’s automotive industry directly employs 115,000 people, of whom more than 80,000 are employed in the production of auto parts. Experts note that since the imposition of tariffs on imported cars and parts by the US in April, some companies have lost many orders from the US and have been forced to make staff cuts.

On August 12, South Africa submitted a proposal for a revised trade agreement with the US, aiming to reduce the 30% tariffs imposed by US President Trump in early August, but it is still unclear how the talks will end.

At the same time, the minister announced a local incentive program to address the challenges currently facing the South African automotive industry. The program now also includes EVs and related components. According to the minister, “Localization is not just a compliance requirement; it is a question of survival. Every 5% increase in localization opens up new demand for purchases worth 30 billion South African rand, an amount that far exceeds the value of automotive exports to the US.”

Global automakers such as Stellantis and Chery are currently seeking to establish production bases in South Africa. Stellantis is also preparing to establish a plant in the Eastern Cape province of South Africa.

South Korea

Survey in South Korea: Despite the trade agreement, Korean auto parts manufacturers will not relocate to the US

In August, the results of a survey conducted by the Korea Automobile Manufacturers Association (KAICA) on Trump's new policy were published in Korea. According to the survey, an overwhelming majority (80%) of Korean auto parts and components manufacturers do not plan to move production to the US because the Trump administration's tariff policy is uncertain and puts significant investments at risk.

Only 10.4% of respondents said they would consider moving production to third countries, such as Mexico, to circumvent US tariffs. However, the initial investment costs in these countries are high and pose a challenge. It should be noted that countries such as Mexico have comprehensive policies to protect local employment.

Israel

The Ministry of Defense is looking into the cybersecurity implications of smart and connected vehicles

The Ministry of Defense is conducting comprehensive staff work on the information security risks of "Smart" and networked vehicles in the IDF and IDF fleets. This is to prevent the possible leakage of sensitive information to external parties.

The immediate emphasis is on Chinese-made vehicles, but the goal is to apply the information security guidelines to all vehicles that are equipped with a wireless or other connection to the network and transmit information from the vehicle to foreign servers abroad. During August, it was published in the economic press that the IDF had already issued a directive prohibiting the entry of Chinese-made networked vehicles into IDF bases. In addition, various requirements appeared in recent procurement tenders to neutralize the data communication capabilities of such vehicles.

Experts say that the array of sensors in the latest generation of "Smart" vehicles, of which more than 200,000 are already on Israeli roads, allows for an accurate picture of the vehicle's surroundings at close and long ranges, at night, and in adverse weather conditions. In addition, such vehicles are equipped with internal sensors inside the passenger compartment, which can collect visual, audio, and biometric information from the vehicle's occupants.

Most of them are linked via two-way communication via WIFI or cellular communication to the manufacturers' servers abroad and transmit the information with the knowledge of the vehicle owner, or "In the background" without his knowledge. Such data, which includes location, surround video, voice recordings, and more, can have intelligence value thanks to "Crowdsourcing" from large quantities of vehicles, the information from which is "Fused" and processed into a strategic picture.

It should be noted that although the IDF limits the acquisition of such vehicles, permanent personnel and civilian IDF employees who are equipped with such vehicles will have to leave them outside the bases, in parking lots allocated for this purpose.

An IDF spokesman said that "The IDF is examining all the implications of smart vehicles in cooperation with all relevant parties. Operational guidelines on the subject will be issued in accordance with the decisions that are made."