Major Automotive Global Trends - December 2025

Global

Research shows that small and medium auto parts suppliers in Europe and the US will face growing pressure in 2026

A joint “Pulse Check” survey, conducted by the European Automotive Parts Suppliers Association (CLEPA) and research firm McKinsey and published in December, reveals that 70% of European automotive parts suppliers now expect their annual profit margins in 2025 to be below 5%, the minimum threshold required for companies to continue to conduct technological research and development, skill training and upgrade production capacity.

A third of European auto parts suppliers expect to post low or no profits at all, a situation that threatens jobs, R&D innovation, and business growth. The survey authors note that as the automotive industry undergoes a transformation towards electrification and digitization, European auto parts suppliers must respond to the challenges and cost pressures arising from this change. However, the report notes that European auto parts suppliers face multidimensional pressures to modernize, such as increasing the implementation of digital technologies and moving into high-added-value sectors, all of which will generate high capital costs.

In 2025, several European auto parts suppliers have already filed for bankruptcy or are facing serious financial crises. Among them, German parts supplier Voit, whose customers include carmakers such as Audi, BMW, and Mercedes-Benz, filed for bankruptcy in January 2025. Marelli Holdings, a major parts supplier for Stellantis and Nissan, filed for bankruptcy protection in the US in June 2025 due to high debts and the impact of tariffs. These are just a few examples.

Consulting firm Roland Berger also notes that auto parts suppliers must now cut costs, streamline operations, and actively innovate or risk losing market share. The company estimates that this could trigger a wave of mergers in the market, with leading technology companies expanding while smaller companies gradually exiting the market.

Competitive pressure is currently increasing in the face of the constant strengthening of Chinese auto parts suppliers. A recent survey by the European Association of Auto Parts Suppliers shows that 86% of European suppliers rank “Strengthening competitiveness” as their top challenge, up 14% compared to the previous survey (spring 2025). At the same time, ongoing geopolitical tensions and tariff policies are reshaping the global trade landscape and disrupting global supply chains, forcing companies to shift production capacity to more cost-competitive regions.

One year after the EU imposed heavy tariffs on Chinese EVs, Chinese car manufacturers see a sharp leap in Europeans sales

By the end of 2025, Chinese automakers are expected to sell more than 700,000 vehicles in the EU, UK, and EFTA, a sharp jump of around 93% compared to around 480,000 vehicles sold in 2024. The jump came despite the EU deciding in October last year to impose punitive tariffs of up to 35%, on top of the existing 10% tariff, on Chinese-made electric vehicles, citing Chinese government subsidies to its auto industry that were harming competition.

On October 30th last year, the EU imposed tariffs of up to 35.3% on top of the existing 10% tariff on Chinese-made EVs. As a result, Chinese automakers’ sales growth in Europe in 2024 was only 13%.

However, within a few months, leading Chinese automakers have adapted their product strategies to the new reality and have shifted their focus to Hybrid, Plug-in Hybrid (PHEV), and even gasoline vehicles at significantly lower prices than their local competitors. As a result, the market share of Chinese automakers in Europe has more than doubled compared to last year and climbed to around 7% in October 2025. According to market research firm Data Force, Chinese automakers are expected to sell over 700,000 vehicles in the European bloc in 2025.

Analysts believe that the EU’s decision to impose tariffs on Chinese automakers failed, in part, due to its focus on the narrow market segment of fully EVs. Instead of encouraging the Chinese auto industry to set up factories in Europe, most Chinese manufacturers have chosen to continue manufacturing in China and exporting from there, and/or to limit their assembly operations in Europe. This is despite their previous commitments. Data from spare parts suppliers and industry sources reveal that the number of vehicles assembled by Chinese automakers in Europe itself is less than 20,000.

The main reason for this is the tens of percent lower production costs in China, which allow automakers to easily absorb the 10% base tariff for gasoline, HEV, and PHEV vehicles. Chinese automakers can achieve higher profit margins in the European market even for EVs, despite the new tariffs.

According to the data, in January-October, the sales rate of EVs, out of all sales by Chinese manufacturers in Europe, fell to 34% compared to 44% in the same period last year. About two-thirds of the models sold by Chinese manufacturers in the European market during the said period were subject to only the 10% base tariff.

It should be noted that for about three years, the Chinese automobile market has been in a fierce price war, forcing manufacturers to shift their profit focus to overseas markets, with government encouragement. Moreover, many Chinese automakers have low domestic capacity utilization rates, which reduces their willingness to expand production capacity in Europe.

China's excess production capacity, in existing plants, is estimated at about 20 million vehicles per year. Chinese automakers also benefit from a tight and cheap supply chain in China, which they would not benefit from in Europe.

November data: Significant slowdown in global EV sales growth

Global EV sales growth hit a new low in November 2025 since February 2024. In that month, global EV registrations grew by 6% YOY, with total sales reaching nearly 2 million vehicles (including PHEVs).

However, the data shows that global EV sales growth (including full electric vehicles and PHEVs) slowed in November to the lowest level since February 2024. The main reason is the expiration of the US EV tax credit, which has slowed sales in the segment and could lead to the first annual decline in North American EV sales since 2019.

By region, EV registrations in the Chinese market rose about 3% YOY in November to more than 1.3 million units. This is the slowest growth rate since February 2024.

In the US, where the tax credit policy for EV buyers expired in October, registrations in the segment fell 42% YOY to just over 100,000 units. Cumulative sales of EVs in North America in the first 11 months of the year fell 1% YOY, mainly due to a massive sales advance.

EV registrations in Europe and the rest of the world rose 36% and 35% YOY in November, respectively, with registrations exceeding 400,000 units and nearly 160,000 units, respectively.

Analysts note that EV registrations in the European market have maintained strong growth, driven by incentive policies in various EU countries. Cumulative EV registrations in Europe in the first 11 months of the year increased by a third compared to last year. On the other hand, analysts expect EV sales in the US to continue to decline next year due to the elimination of tax benefits.

USA

The American administration adopts a “Softer” line in the trade war against China

After an aggressive trade war between the Trump administration and China, which lasted throughout 2025, with an emphasis on vehicles, it seems that the US administration is starting to change direction on this front as well. The first sign of change is heralded by the investigative report, which examined the Chinese chip industry and its impact on the US for almost a year.

The report stated that in light of the findings of the investigation, the US decided to refrain from imposing additional tariffs on chips imported from China at least until mid-2027. The US hinted that tariffs could occur in the future depending on the circumstances, but, in the meantime, technically, these chips will be exempt for 18 months, according to the rules of the US Federal Register.

According to commentators, the decision to postpone the imposition of tariffs is another sign that the Trump administration is making efforts to stabilize relations between the two countries and strengthen the agreement reached between the two powers at a summit in South Korea in October. According to that agreement, the two powers agreed to suspend the imposition of heavy tariffs and ease export restrictions on critical technologies and minerals.

It should be recalled that the investigation began at the end of the Biden administration following a demand to impose a 50% tariff on Chinese-made semiconductors and related products. The move mainly concerns "Basic" chips made in China and not particularly sophisticated chips with artificial intelligence. Such simple chips are also widely used in the automotive industry due to their low price.

The big question in the US today is whether the continuation of that "Policy of rapprochement" will also be reflected in the easing of the high tariffs, which currently effectively block the export of finished vehicles made in China to the US. As far as is known, China is pressing for the agreement to cover this issue as well.

Europe

The EU formulated a "Relief package" for the automotive industry and withdrew from the target of "zero ICE" by 2035

In recent months, there have been increasing signs and reports that the EU is considering postponing the implementation of the "ICE sales ban" by five years, from 2035 to 2040. This follows significant pressure from several of Europe's largest car-producing countries, including Italy and Poland, who have publicly argued that the proposed timetable for phasing out internal combustion engine technology by 2035 is "Too aggressive, and could seriously harm one of Europe's most important industries."

Despite vigorous denials from the EU Commission, the pressure did succeed, and on December 15, the Commission announced a new "Automotive package," which, for many, represents a retreat from the tough targets for reducing emissions from transport, which were adopted about three years ago. Here are the main points of the new draft:

• Permit to sell vehicles with internal combustion engines even after 2035: According to the draft, a target of 90% CO2 reduction is set for 2035, compared to 2021, which effectively translates into CO2 emissions of 11 grams per kilometer for the entire vehicle fleet – instead of “Zero grams” so far. The Commission has not yet specified an alternative date for a full reduction. The European Commission estimates that the change will lead to 27% to 29% of new vehicles registered after 2035 still being equipped with internal combustion engines. Not only plug-in hybrids and vehicles with extended-range ICE engines will be allowed after 2035, but also mild hybrids and full ICE vehicles. However, there is a significant caveat: the CO2 emissions produced by new ICE engines after 2035 will have to be offset. A “Credit” system is planned, through which manufacturers will have to compensate for the emissions of the ICE and plug-in vehicles they sell after 2035, for example, by using “Green steel” (steel whose production process is reduced in pollution) originating in the EU or “Climate-neutral” fuels, such as biofuels or e-fuels. Up to 30% of the remaining permitted emissions can be credited through the use of “Clean” fuels. For green steel, this is 70% of the remaining permitted emissions. However, it is still unclear how strict the regulations will actually be, and whether a car manufacturer will actually be able to use green steel and fuel its vehicles with e-fuels by 2035 depends heavily on the availability and price of these materials. As a result, it is unclear how much such vehicles will cost after 2035 and who will be able to buy them.
• Incentives for small EVs: Small, inexpensive electric cars will receive special support from the EU through so-called "Super-credits". This refers to cars shorter than 4.20 meters that will receive a significantly greater weight when calculating the average emissions of the manufacturer's model fleet. The sale of such a car will not be considered as one vehicle in the manufacturer's emissions calculation, but as 1.3 vehicles. According to the EU, the move will create incentives to launch additional small electric car models on the market. It should be noted that this is, in fact, the adoption of a proposal by Spain and France. Both countries already voted in the fall of 2025 in favor of maintaining the 2035 CO2 target, accompanied by additional flexibility, while at the same time promoting small electric cars through measures such as the super-credits.
• Extension of the interim emission reduction target. The interim emission reduction target currently set for 2030 is expected to be extended to 2032. Manufacturers will have to meet the interim targets over the period from 2030 to 2032 on average. This means that if they are still above the target in 2030, this will not immediately lead to penalties, and the deficit can be offset through greater savings in subsequent years.
• Additional flexibility is given to the van segment. The Commission accepted the argument that a transition to full electric drive in this segment is structurally more difficult. Therefore, the CO2 reduction target for this segment in 2030 has been reduced from 50% to 40%.
• Encouraging the adoption of EVs in fleets. The Commission has announced its intention to publish specific targets for member states for the deployment of EVs in company fleets, starting from 2030, with different targets for each country. The official wording in the draft is “To support the introduction of zero- and low-emission vehicles for large companies”. “Large companies” are defined by an EU directive, but the Commission intends to leave it to member states to decide how to implement these targets. Belgium’s company car taxation system, which has led to a sharp increase in EV sales in the country, is considered a model to follow. The new regulations also apply to electric trucks.
• Accelerating battery production in the EU. The European Commission intends to allocate €1.8 billion for a “Battery Booster” aimed at accelerating the establishment of a battery value chain that will be produced entirely in the EU. The plans include interest-free loans to battery cell manufacturers and supportive policy measures.
• Reducing bureaucracy for the automotive industry. Red tape is expected to change not only for the battery sector, but for the entire automotive industry. The aim is to reduce the administrative burden on companies in the automotive industry, and the Commission estimates the potential savings at around €706 million annually. Among other things, it is proposed to reduce the number of secondary regulations and streamline testing for new passenger cars and trucks.
• Changes to heavy-duty vehicle emissions standards. The Commission also proposes in the draft a targeted amendment to the CO2 emissions standards for heavy-duty vehicles, including trucks and buses, which would allow greater flexibility in meeting the 2030 targets, but has not yet provided details. Formally, the changes mentioned above are still only proposals and not final regulations or law. To pass the “Automobile package”, the European Parliament must approve it, and the member states must give their consent in the Council of the EU.

However, commentators believe that this approval is not at all guaranteed; apart from Germany, six other European countries have supported the softening of CO2 targets, but other countries, such as Spain, France, Denmark, and Belgium, are taking a much more aggressive approach in the transition to EVs. In the European Parliament, a simple majority is sufficient to pass the regulations, while in the Council of the EU, a "Qualified majority" is required, which would require the approval of at least 15 countries representing at least 65% of the EU population. In the event of a complete failure, the target agreed in 2023 is still valid: zero-gram CO2 emissions from 2035 onwards. In the explanation of the draft package of measures, the Commission writes that the European automotive industry is currently facing not only a major technological transformation but also "Fierce competition that is intensifying at an unprecedented speed and scale”. It is therefore important to ensure the competitiveness of the industry and support it in the transition to clean transport.

It should be noted that the Commission brought forward the schedule for reviewing emission reduction regulations by a year and continues to claim that “The future is electric.” However, the bodies that pushed for the change, led by the European Automobile Manufacturers Association (ACEA), have already defined the draft as a victory and a “First step” on the way to a more comprehensive reform. The change in EU policy comes against the backdrop of a slowdown in the growth of EV sales in Europe – due, among other things, to the elimination of purchase subsidies in key markets such as Germany. While sales have recovered after subsidies were restored in some countries, the overall growth trajectory of EVs remains well below the levels required of manufacturers to meet the EU’s 2035 targets.

The EU and China resume their negotiations on a “Minimum price” mechanism as a replacement for car export tariffs

In December, global media reported that China and the EU had resumed negotiations on establishing a “Floor price” mechanism for EVs. This is an alternative to the heavy tariffs imposed in 2024 on Chinese-made EVs. The mechanism is supposed to lead to the elimination of tariffs and instead set a “Competitive” minimum price as a lower threshold, below which Chinese car manufacturers will not be able to price their models exported to Europe.

On December 11th, China’s Ministry of Commerce announced that the country had resumed negotiations with the EU on establishing such a mechanism, with consultations on the subject expected to continue in the coming weeks. At the same time, the Chinese Ministry of Commerce urged the EU not to negotiate with Chinese car manufacturers unilaterally, but only with the Chinese government.

It will be recalled that last year, a European Commission investigation concluded that Chinese EV manufacturers benefit from deep subsidies from the Chinese government, through which they divert excess EV production capacity to the European market, while harming competition. Based on this finding, the 27 member states of the EU approved, in October 2024, imposing tariffs of up to 45.3% (including the previous tariff of 10%) on EVs made in China.

The Chinese government insists that the competitive advantage of Chinese automakers stems from their own strength, not subsidies. China has consistently called on the EU to replace tariffs with a “Minimum price” mechanism. Analysts note that the EU is a key export market for Chinese automakers because profitability is significantly higher there than in the Chinese market, which suffers from fierce price competition and deflation.

At a regular press conference, a spokesperson for the Chinese Ministry of Commerce stated that "China welcomes the EU's positive stance on resuming negotiations and appreciates the EU's return to the path of resolving disputes through dialogue."

The EU's previous "Minimum price" mechanism, also known as the "Price undertaking policy," was previously applied mainly to homogeneous goods, not to industrial products or vehicles. The European Commission still believes that setting a uniform minimum price is not enough to offset the industrial damage caused by Chinese government subsidies.

The UK advances review of long-term sales targets for zero-emission vehicles (ZEV)

The UK government is planning to start reviewing its existing EV sales targets in 2026, rather than in 2027 as originally planned. The stated aim is to “Meet the needs of the car industry”. However, it is doubtful whether this interim step will affect the UK government’s ultimate target of banning sales of new internal combustion engine vehicles by 2035.

The move comes after ongoing pressure from the UK car industry. The review will focus on the existing regulation, which stipulates that the share of electric cars in total new car sales in the UK will increase at an accelerated rate each year until 100% electric sales are achieved by 2035. It is expected that the 2026 review will examine, among other things, the regulation’s suitability for market absorption capacity, production capacity, and the required investment conditions. However, the UK’s 2035 targets are likely to remain unchanged for now. The industry secretary confirmed the accelerated timetable in an interview with the Financial Times, noting that “The review of the ZEV regulations will start next year… of course we want to complete that review as quickly as possible.”

The ZEV regulations are a key part of the UK’s “Green” mobility policy. While the government remains committed to the target of phasing out new petrol and diesel cars by 2035, car manufacturers are expressing concerns about the pace of the interim targets.

China

China tightens environmental vehicle standards, forcing EV manufacturers to become more efficient

China is continuing its stated policy of aligning itself with the stricter emission regulations of Europe and the United States and is currently preparing for the launch of the new National VII emission standard for private and commercial vehicles.

Chinese media reports that the new Chinese standard will be launched in 2026, less than two years after the full implementation of the China VI b standard, which also represented a significant leap compared to its predecessor. Such a rapid pace of progress is putting heavy pressure on the supply chain in the Chinese automotive industry.

Unlike upgrades to previous standards, which focused solely on “Tightening emission limits,” the China VII standard represents comprehensive structural changes that Chinese officials claim “Push internal combustion engines to the limit of their physical capabilities.” Therefore, it is estimated in China that this may be the last emission standard that China will launch on the way to a full transition to BEV or plug-in vehicles.

Analysts estimate that to meet the new standard, manufacturers will need to invest heavily in research and development to improve engine technology, optimize exhaust gas treatment systems, and improve fuel efficiency. However, these investments may not yield the expected returns as the market share of gasoline vehicles is rapidly eroding. In China, it is claimed that the "End of the era of gasoline vehicles" is an inevitable result of the transformation of the automotive industry towards cleaner, more efficient, and smarter vehicles. The implementation of the China VII standard will force manufacturers to accelerate their transition to new energy vehicles, whether they are traditional automakers or young electric vehicle companies. "They all need to focus their core resources on the research and development of new energy technologies and the construction of an appropriate supply chain. Only in this way can they stand firm in the future market competition."

Meanwhile, it was reported in December that China will also enforce a new standard, the first of its kind in the world, in 2026, requiring efficiency in the energy consumption of new EVs. The standard will replace China's previous "Recommendations" framework and give a binding legal force for all new models. The standard will come into effect from the beginning of January 2026. The standard is officially called "Energy Consumption Limits for Electric Vehicles Part 1: Private Cars" and sets mandatory ceilings for electricity consumption according to the vehicle's weight and technical characteristics. Regulators stated that "The limits were set after assessing the current energy consumption of full electric passenger cars (BEVs), the technological potential for energy saving, cost control considerations, and performance characteristics of special vehicle categories."

Compared to the previous version, the new mandatory standard tightens energy consumption requirements by about 11%. It also introduces differentiated indicators, reflecting changes in vehicle usage scenarios and technical solutions, to accommodate diverse product development paths and guide future research and implementation of efficiency technologies.

When the standard comes into effect on January 1, 2026, manufacturers will be required to make technical upgrades to their product lines to meet the new benchmark. For passenger cars with a fully electric drive weighing approximately 2 tons, the new requirement sets a maximum power consumption of 15.1 kilowatt-hours per 100 kilometers.

The regulators noted that following the technical upgrades, vehicles with the same battery capacity are expected to show an average improvement of about 7% in driving range, due to the reduction in energy consumption. The regulation does not cover plug-in hybrid (PHEV) or extended-range electric vehicles (EREV).

Additional policy measures will link the standard to financial incentives, aligning fiscal policy with efficiency goals. Electric models that are already on the purchase tax exemption list until the end of 2025 and meet the updated requirements will continue to be exempt from the standard in 2026, while models that do not meet the standard may be removed from it. The package of measures also raises the technical threshold for plug-in hybrid and extended-range vehicles, including higher requirements for a minimum pure electric range to qualify for incentives.

South Korea

The South Korean government is trying to close the gaps vis-à-vis China using AI

The Korean government aims to integrate artificial intelligence into manufacturing processes, with an emphasis on automobile production. To this end, a new strategic cooperation program with the industrial sector has been announced, which aims to actively promote industrial transformation by improving productivity, implementing data integration, and strengthening industrial resilience. The South Korean government has warned that the country is lagging behind China in the field of AI and could be left behind without structural reforms.

In December, South Korea’s Minister of Trade, Industry and Energy said: “China has taken the lead, and South Korea is now in the process of closing the gap… If we fail to harness AI to transform key manufacturing sectors such as automobiles, shipbuilding, and solid-state batteries, we will be in trouble.” The warning was based on a recent industry survey, which showed that Chinese companies are expected to overtake South Korean companies in all key export industries within five years.

The program, known as M.AX, is a public-private partnership aimed at rebuilding the manufacturing sector around AI, data, and automation technologies. As of today, the number of participating entities has expanded to about 1,300, and there are plans to invest 700 billion won (about $481 million) in AI in manufacturing over the next year.

Data suggests that the competitiveness of South Korean manufacturing is rapidly eroding. A survey conducted by the Korea Business Association in October of 200 of the top 1,000 exporting companies found that China has already overtaken South Korea in sectors such as steel, general machinery, secondary batteries, and the automobile and parts industry. China is also expected to lead in areas where Korea currently has an advantage. According to the study, only 32.4% of South Korean manufacturers now believe that their technology is more advanced than that of their Chinese competitors, down from nearly 90% in 2010.

The minister stressed that China’s rapid development of artificial intelligence-based manufacturing is a key factor in widening the gap between the countries. He mentioned his visit to Xiaomi’s electric vehicle factory, which operates a production system focused on automation and real-time data. The factory operates in three shifts and produces a fully electric vehicle every 76 seconds. The plant has no inventory because vehicles are delivered to customers as soon as they are finished. He said the level of sophistication at the plant, which has an annual production capacity of 150,000 vehicles, “Far exceeds” that of Hyundai and Kia plants in South Korea.

The Korean program brings together giants from 10 industry sectors, including Samsung and Hyundai, alongside small and medium-sized businesses and cutting-edge technology companies. The areas include smart logistics, autonomous vehicles, biotechnology, and semiconductors.

South Korea extends vehicle and fuel tax benefits

In late December, South Korea's Ministry of Strategy and Finance announced that the country would extend its policy of exempting passenger vehicles from purchase tax by another six months, until the end of June 2026.

According to the ministry, during the extension, the purchase tax rate on passenger vehicles will be reduced from 5% to 3.5%. However, the ministry stated that, subject to the recovery in domestic demand, this policy will end on June 30, 2026.

The South Korean government first introduced the purchase tax reduction policy on passenger vehicles in July 2018 and has since extended the policy implementation period several times to stimulate domestic consumption, especially during the COVID-19 pandemic. In addition, due to the ongoing volatility in global oil prices, the South Korean government plans to extend the fuel tax reduction policy by another two months, until the end of February 2026, to ease the burden on consumers. As part of the move, the 7% reduction on gasoline and the 10% reduction on diesel and liquefied petroleum gas will continue.

The ministry said the latest decision takes into account uncertainties in domestic and international oil and commodity prices, with the aim of easing the pressure of fuel costs on the public. The South Korean government first introduced the fuel tax reduction policy in November 2021 to deal with rising energy prices, and this is its 19th extension.

South Korea is highly dependent on energy imports and is particularly vulnerable to external price shocks, which often fuel domestic inflation. While the South Korean economy is currently showing signs of a modest recovery, external uncertainties remain with the dual challenge of global oil price fluctuations and a shaky foundation for domestic demand recovery. For consumers, the continuation of the policy will directly reduce the cost of purchasing and driving vehicles, while suppliers will benefit from an incentive for vehicle consumption, which is expected to further drive the recovery of related industrial chains. At the macro level, the measure is intended to curb external price shocks.

Mexico

Mexico officially approves additional tariffs of up to 50% on Chinese car imports

In early December, the Mexican Senate passed a new law that would impose additional tariffs of 5% to 50% on more than 1,400 products from Asian countries that have not yet signed free trade agreements with Mexico, including Chinese-made vehicles and spare parts. The bill passed with a majority of 76 in favor, five against, and 35 abstentions.

The new tariffs will take effect next year and will have a significant impact on imports of cars and auto parts, with Chinese products being the main victims. Under the new law, cars made in China will face tariffs of up to 50%. It should be noted that Chinese carmakers currently hold a market share of 20% of sales in Mexico, a significant increase from a share of less than 2% just six years ago

Mexican officials and local automotive associations support the imposition of these import tariffs to protect domestic car production. However, the Mexican president stated that the measure is not specifically aimed at China, but will generally affect countries that have not signed a free trade agreement with Mexico, including South Korea. According to her, "The law is intended to increase domestic production and protect industries such as automobiles and textiles... Our goal is not to create conflict with any country in the world, and we have great respect for China."

Despite her words, commentators point out that the approval of the law comes at a time when Mexico is in the midst of trade talks with US President Donald Trump. It reflects the fact that the tariffs that Mexico will impose on Chinese goods could help ease the heavy tariffs that the US has imposed on steel and aluminum products imported from Mexico.

The new tariffs are also very reminiscent of Trump's "Tariff attack" against China, and the president's position is in line with the Americans' statements about so-called "Chinese exports that are transported to the US through other countries." The Mexican legislation also echoes Canada's imposition of tariffs on EVs, steel, and aluminum from China last year. Mexico's Ministry of Finance estimates that the new tariffs will generate about 52 billion pesos ($2.8 billion) in revenue for the country next year.

In response, China's Ministry of Commerce stated that "We hope that Mexico will rectify the unilateral and discriminatory measures as soon as possible." The ministry added that China will "Closely monitor the implementation of the measure and assess its effects."

To protect the interests of relevant Chinese industries in Mexico, China launched an investigation against Mexico in September on the grounds of "Imposing trade and investment barriers." The investigation is still ongoing.

Israel

The Ministry of Transportation is promoting a regulation that will allow the operation of autonomous vehicles on Israeli roads, possibly as early as 2026

After many years of stagnation, the Ministry of Transportation is expected to advance a series of regulations in the coming months that will allow the operation of vehicles with a high level of autonomy on the country's roads. In the first stage, the intention is to allow travel with vehicles that support level 3 autonomy, that is, vehicles with the ability to drive independently without physical intervention by the driver and without his eye contact with the road, but only in a defined and controlled environment, for which there is detailed digital mapping, such as intercity roads, defined urban routes and traffic jams.

In addition, regulation is expected to allow the operation of "Robot taxis" with a high level of autonomy, Level 4, on public urban roads in Israel in a variety of driving scenarios, as part of a pilot, which may expand to full commercial service in the future. Such vehicles can theoretically operate without a driver in the vehicle, but in Israel, it is likely that the presence of a supervising driver in the vehicle and/or a connection to real-time remote monitoring will be required in the first stage. Such experiments are already being conducted extensively in several cities and countries in the US and Europe, as well as in China.

Several global companies are already exploring the possibility of running such experiments in Israel, including Tesla, Uber, and several Chinese companies, which have been conducting experiments in Europe, China, and the Middle East for months.

The economic press reports that the ministry is also expected to prepare a defined urban route on public roads, which will serve as a pilot for testing the commercial operation of Tesla's "Autonomous taxi".

The 2026 budget of the Ministry of Transportation includes an allocation of tens of millions of NIS to the Innovation Division in the Ministry of Transportation, which aims to support and lead projects to promote smart transportation in Israel, including the development of experimental infrastructure for car manufacturers and automotive technology developers from Israel and abroad, the promotion of technological solutions and the implementation of innovative models in local authorities and companies.

It should be noted that intentions to implement autonomous driving in Israel's vehicle regulations have existed since the previous decade, and in previous years, several projects on the subject were even set, which ultimately did not materialize, such as a joint project by Mobileye and VW to operate a robot taxi service in Tel Aviv. In 2022, a professional committee was appointed to review requests for the implementation of trials and experimental operation of autonomous vehicle services in Israel, while in 2024, the Ministry of Justice published a report on regulating liability for damages that may be caused by operating an autonomous vehicle. However, these steps have not yet borne fruit.