Category: Utilities & Transport

25 Percent Tariffs on Imported Automobiles?

his week, President Donald Trump made remarks during a press conference indicating that he was planning to impose tariffs “in the neighborhood of 25 percent” on imported automobiles, perhaps as early as April 2. It was unclear whether the targeted automobile tariffs are related to the so-called “reciprocal tariffs” that are being studied by the government across all products from all countries. 
During this week’s press conference, the president expressed his understanding that the European Union has already lowered its tariffs on imported automobiles from 10 percent to 2.5 percent. However, the EU has released an FAQ indicating that it has made no such concession, and pointing out that the U.S. imposes a 25 percent tariff on pickup trucks.
The auto tariff referenced in this week’s press conference is reminiscent of the findings of the Section 232 investigation of imported automobiles performed during President Trump’s first administration. Although that investigation concluded that imports of automobiles harmed U.S. national security, the recommended 25-35 percent tariff was never imposed.

Car plants are being canceled in other locations now because they want to build them here. And you read about a couple — not that I want to mention names or anything — but you read about a couple of big ones in Mexico just got canceled because they’re going to be building them in the United States. And that’s very simply because of what we’re doing with respect to taxes, tariffs, and incentives.
www.whitehouse.gov/…

Restoring Western North Carolina’s Infrastructure: NCDOT Receives $250 Million in Federal Emergency Relief Funds

The Federal Highway Administration (FHWA) has announced an immediate allocation of $352.6 million in Emergency Relief funds to support recovery efforts following the devastation caused by Hurricane Helene in September 2024.
Of this funding, the North Carolina Department of Transportation (NCDOT) will receive $250 million to repair damaged roadways and bridges, including Interstate 40. Another $32.6 million will be split between the U.S. Forest Service and the National Park Service to make repairs along the Blue Ridge Parkway and other roadways located in national forests.
The Impact of Hurricane Helene
Hurricane Helene left a trail of destruction across the Southeast, including widespread flooding, landslides, and structural damage to roadways and bridges. Western North Carolina, known for its mountainous terrain and vital transportation routes, was particularly hard-hit. The storm caused severe washouts, rockfalls, bridge collapses, and pipe failures, creating hazardous conditions and disrupting travel.
The cumulative cost of federally eligible damage is still being assessed, but early estimates suggest the total will exceed $4 billion. In response, federal, state, local, and tribal agencies have mobilized to restore accessibility and safety to the affected areas.
Emergency Relief Funds: A Lifeline for Infrastructure Recovery
The FHWA’s Emergency Relief program plays a crucial role in providing financial assistance to repair and reconstruct damaged transportation infrastructure after natural disasters. The program’s “quick release” funding mechanism ensures that states receive immediate support for urgent repairs, reducing delays in reopening critical routes.
The newly allocated $250 million for NCDOT will be directed toward repairing damage along North Carolina’s roadways, including I-40, a key transportation corridor linking North Carolina to Tennessee.
Challenges and Considerations for Construction Professionals
While the federal funding is a significant step toward recovery, construction professionals working on these repair projects must navigate several key challenges:
State and Federal Procurement Requirements – Public contracts for federally funded infrastructure projects come with strict guidelines. Even though these projects are state-managed, they often require compliance with federal laws and regulations. Contractors need to ensure they are complying with all applicable laws and requirements, which may include:

The Federal Acquisition Regulation;
The Build America Buy America Act;
Davis-Bacon Act wage standards;
Minority business participation mandates; and
Bonding and insurance requirements, among others.

Licensing Concerns – If you are an out-of-state contractor interested in performing work in Western North Carolina as part of the state and federal disaster relief effort, it is critical that you understand and comply with North Carolina’s licensing laws. 
Looking Ahead: A Resilient Future for North Carolina’s Infrastructure
The infusion of federal emergency relief funds into North Carolina’s transportation network is a welcome development for residents, businesses, and the construction industry. As the state embarks on the challenging task of rebuilding, collaboration among government agencies, engineers, contractors, and legal professionals will be essential to achieving a resilient and efficient transportation system.
For construction firms and industry stakeholders, the recovery efforts present both opportunities and responsibilities. With careful planning, regulatory compliance, and strategic risk management, North Carolina can emerge from this disaster with stronger, more sustainable infrastructure that serves future generations.

D.C. Court Finds A Piggyback Statute Of Limitations In Segway-Crash Case

According to court filings, on October 11, 2019, a Segway struck Marilyn Kubichek and Dorothy Baldwin as they strolled along a D.C. sidewalk.
On December 20, 2022, they filed two complaints in the Superior Court based on the Segway incident – one against the operator of the Segway that they said hit them, and one against the tour organizer. The cases were consolidated into one proceeding, Kubichek et al. v. Unlimited Biking et al.
Unfortunately for Ms. Kubichek and Ms. Baldwin, the statute of limitations for negligence in D.C. is three years. Their claims had become untimely before they filed their complaints. 
Defendant Eduardo Samonte asserted the statute of limitations in a motion to dismiss, which was granted.
In fact, the order granting Mr. Samonte’s motion actually dismissed the case against both defendants. But the other defendant, Unlimited Biking, had not asserted the statute of limitations.
The question for the Court of Appeals was whether the complaint against Unlimited Biking could be dismissed based on Mr. Samonte’s motion.
Generally speaking, it’s on a defendant to assert the statute of limitations as a defense to the claims against it. Courts don’t do that on their own, and a defendant that fails to assert the statute in its answer to the complaint, or in a motion to dismiss, typically waives the defense.
The Court of Appeals returned to a 1993 case called Feldman, which had suggested that a trial court might have the power to invoke the statute-of-limitations defense on its own, but only if it “is clear from the face of the complaint” that the statutory period has expired.
In the Kubichek case, the Court of Appeals found that it was not clear from the complaints that the statute of limitations had expired.
So – back to court for Unlimited Biking, right?
Not so fast. The Court of Appeals proceeded to fashion a new, “narrow exception” whereby the dismissal of the complaint against Unlimited Biking could be affirmed.
The rule used by the Court appears to work this way: 
One defendant asserts the statute of limitations.
+
The plaintiffs have a chance to litigate the issue.
+
The facts relevant to the application of the statute of limitations are not disputed.
+
The relevant facts are the same with respect to both defendants.
=
The trial court may dismiss claims against a defendant that did not assert the statute of limitations.
No litigator or party should neglect to assert a statute-of-limitations defense at the earliest opportunity in a case where the defense may apply. But, after Kubichek, if you are so neglectful, your co-defendant may save you.
Just one more reason why persons who have been harmed and believe they have legal claims should be careful not to wait too long to go to court.

January 2025 ESG Policy Update— Australia

Australian Update
Mandatory Climate-Related Financial Disclosures Come Into Effect
The first phase of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth) (Bill) commenced on and from 1 January 2025. The Bill amends the Corporations Act 2001 (Cth) to mandate that sustainability reporting be included in annual reports.
The first phase requires Group 1 entities to disclose climate-related risks and emissions across their entire value chain. Group 2 entities will need to comply from 2026, followed by Group 3 entities from 2027.

First Annual Reporting Period Commences on
Reporting Entities Which Meet Two out of Three of the Following Reporting Criteria
National Greenhouse and Energy Reporting (NGER) Reporters
Asset Owners

Consolidated Revenue for Fiscal Year
Consolidated Gross Assets at End of Fiscal Year
Full-time Equivalent (FTE) Employees at End of Fiscal Year

1 Jan 2025(Group 1)
AU$500 million or more.
AU$1 billion or more
500 or more.
Above the NGERs publication threshold.
N/A

1 July 2026(Group 2)
AU$200 million or more.
AU$500 million or more.
250 or more.
All NGER reporters.
AU$5 billion or more of the assets under management.

1 July 2027(Group 3)
AU$50 million or more.
AU$25 million or more.
100 or more.
N/A
N/A

Mandatory reporting will initially consist only of climate statements and applicable notes before expanding to include other sustainability topics, including nature and biodiversity when the relevant International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards are issued by the International Sustainability Standards Board (ISSB).
Entities are also not required to report Scope 3 emissions, being those generated from an entity’s supply chain, until the second year of reporting. Further, there is a limited immunity period of three years for Scope 3 emissions in which actions in respect of statements made may only be commenced by the Australian Securities and Investments Commission (ASIC) or where such statements are criminal in nature.
Further information on the mandatory climate-related disclosures can be found here.
New Vehicle Efficiency Standard Comes into Effect
On 1 January 2025, the New Vehicle Efficiency Standard (NVES) came into effect.
The NVES aims for cleaner and cheaper cars to be sold in Australia and to cut climate pollution produced by new cars by more than 50%. The NVES aims to prevent 20 million tonnes of climate pollution by 2030.
Under the NVES, car suppliers may continue to sell any vehicle type they choose but will be required to sell more fuel-efficient models to offset any less efficient models they sell. Car suppliers will receive credits if they meet or beat their fuel efficiency targets.
However, if a supplier sells more polluting cars than their target, they will have two years to trade credits with a different supplier or generate credits themselves before a penalty becomes payable.
The NVES aims to bring Australia in line with the majority of the world’s vehicle markets, and global manufacturers will need to comply with Australia’s laws. This means that car suppliers will need to provide Australians with cars that use the same advanced fuel-efficient technology provided to other countries.
For Australians who cannot afford an electric vehicle, it is hoped the NVES will encourage car companies to introduce more inexpensive options. There are approximately 150 electric and plug-in hybrids available in the US, but less than 100 on the market in Australia. There are also currently only a handful of battery electric vehicles in Australia that regularly retail for under AU$40,000.
Inaugural Australian Anti-Slavery Commissioner Appointed
On 2 December 2024, Mr Chris Evans commenced a five-year term as the inaugural Australian Anti-Slavery Commissioner (Commissioner), having been appointed in November 2024.
Mr Chris Evans previously served as CEO of Walk Free’s Global Freedom Network “Walk Free”. He and Walk Free played a significant role in campaigning for the introduction of the Modern Slavery Act 2018 (Cth) (Modern Slavery Act).
Prior to his time at Walk Free, Mr Evans was a Senator representing Western Australia, serving for two decades.
The Australian Government has committed AU$8 million over the forward estimates to support the establishment and operations of the Commissioner.
Among other functions, the Commissioner is to promote business compliance with the Modern Slavery Act, address modern slavery concerns in the Australian business community and support victims of modern slavery. We expect the Commissioner will take a pro-active role in implementing the McMillan Report’s recommendations for reform of the Modern Slavery Act supported by the Australian Government including penalties on reporting companies who fail to submit modern slavery statements on time and in full and the Commissioner’s disclosure of locations, sectors and products considered to be high-risk for modern slavery.
For more information on the role of the Commissioner, you can read our June 2024 ESG Policy Update – Australia.
View From Abroad
Trump Administration Provides Early Insight Into Their Position on ESG-Related Regulations
On 20 January 2025, shortly after new US President Donald Trump was inaugurated, the White House published the America First Priorities (Priorities). Several of these priorities are relevant to ESG-related policies and have been incorporated into Executive Orders and Memoranda issued by President Trump.
These Priorities, Executive Orders and Memoranda provide an insight into the new administration’s position on ESG-related regulations and include the following:

Reviewing for rescission numerous regulations that impose burdens on energy production and use, including mining and processing of non-fuel minerals;
Empowering consumer choice in vehicles, showerheads, toilets, washing machines, lightbulbs and dishwashers;
Declaring an “energy emergency” and using all necessary resources to build critical infrastructure;
Prioritising economic efficiency, American prosperity, consumer choice and fiscal restraint in all foreign engagements that concern energy policy;
Withdrawing from the Paris Climate Accord;
Withdrawing from any agreement or commitment under the UN Framework Convention on Climate Change and revoking any financial commitment made under the Convention;
Revoking and rescinding the US International Climate Finance Plan and policies implemented to advance the US International Climate Finance Plan;
Freezing bureaucrat hiring except in essential areas; and
Ordering those officials tasked with overseeing diversity, equity and inclusion (DEI) efforts across federal agencies be placed on administrative leave and halting DEI initiatives taking place within the government.

It is expected that the Trump administration will continue to prioritise economic growth over the perceived costs of ESG-related initiatives. Corporate ESG obligations may decrease, potentially creating short-term reporting relief and less shareholder pressure on companies to adopt ESG-focused policies.
Any relaxation of ESG-related regulations in the US may have extra-territorial effects on other jurisdictions as they determine whether to pause, roll-back or expand their reform programs in response. Multinational enterprises may find it difficult to navigate these potentially increasingly divergent national regimes.
UK Accounting Watchdog Recommends Sustainability Reporting Standards
On 18 December 2024, the Financial Reporting Council, as secretariat to the UK Sustainability Disclosure Technical Advisory Committee (TAC), recommended the UK Government adopt International Sustainability Standards Board reporting standards, IFRS S1 (Sustainability-related financial information) and IFRS S2 (Climate-related disclosures) (the Standards).
The purpose of these Standards is to provide useful information for primary users of general financial reports. Broadly:

IFRS S1 provides a global framework for sustainability-related financial disclosures and addresses emissions, waste management and environmental risks; and
IFRS S2 focuses on climate risks and opportunities.

Adopting these Standards in tandem ensures that companies account for their full environmental impact. TAC has also recommended minor amendments to the Standards for better suitability to the UK’s regulatory landscape. For example, extending the ‘climate-first’ reporting relief in IFRS S1 will allow entities to delay reporting sustainability-related information, by up to two years. This will allow companies to prioritise climate-related reporting.
This endorsement comes after the TAC was commissioned by the previous government to provide advice on whether the UK Government should endorse the international reporting Standards. Sally Duckworth, chair of TAC, stated that the adoption of these reporting standards is “a crucial step in aligning UK businesses with global reporting practices, promoting transparency and supporting the transition to a sustainable economy”.
With more than 30 jurisdictions representing 57% of global GDP having already adopted the Standards, the introduction of these Standards in the UK will align UK companies with international reporting standards and provide greater transparency and accountability, which is important for achieving sustainability goals and setting strategies going forward.
Sustainable Investing Spotlight for 2025
Whilst Europe has dominated the sustainable investing charge with regulators prioritising disclosure and reporting initiatives, 2025 is set to be a challenging year with the Trump administration expected to reorder priorities in the US that are likely to impact the sustainability landscape going forward. Investment data analytics from Morningstar predicts that there will be six themes that will shape the coming year:
Regulations
The US Securities and Exchange Commission (SEC) may reverse rules requiring public companies in the US to disclose greenhouse gas emissions and climate-related risks and roll back a number of other sustainability related initiatives. This is at odds with the European Union and a number of other jurisdictions globally who are focusing on rolling out climate and sustainability disclosures.
Funds Landscape
Fund-naming guidelines that have been introduced by the European Securities and Markets Authority will see a large number of sustainable investment funds across the EU rebrand, which is likely to reshape the landscape. Off the back of the de-regulation occurring in the U.S., there is an expectation that the number of sustainable investment funds will shrink. It will be interesting to see how the market responds and what investor appetite for these products across the rest of the world, will be.
Transition Investing
Investors will look to invest in opportunities arising out of the energy transition. Institutional investment is vital to meet targets, with focus predicted to be on renewable energy and battery production.
Sustainable Bonds
It is predicted that sustainability related bonds will outstrip US$1 trillion once again. Institutional investors have been targeting sustainability related bonds to aid their net zero efforts. Global players like the EU are poised to play a critical role in the global energy transition and boost the sustainability bond markets by implementing regulatory frameworks to encourage investment.
Biodiversity Finance
Nature will increasingly be recognised as an asset class, thanks to global initiatives aimed at correcting the flawed pricing signals that have contributed to biodiversity loss. These efforts seek to acknowledge the true value of nature and address the ongoing degradation of biodiversity. There is an appetite for nature-based investment, but regulatory uncertainty and uncharted pathways remain a deterrent.
Artificial Intelligence
This prominent investment theme in 2024 is likely to continue well into this year. However, there are risks associated with this asset class. The rapid adoption and volatile regulations are proving costly, along with the immense amount of energy generation required to run artificial intelligence fuelled data centres.
Canada Releases First Sustainability Disclosure Standards in Alignment with ISSB Global Framework
The Canadian Sustainability Standards Board (CSSB) has released its first Canadian Sustainability Disclosure Standards (CSDS), which align closely with IFRS Sustainability Disclosure Standards whilst also addressing considerations specific to Canada.
Broadly, and similar to IFRS Sustainability Disclosure Standards:

CSDS 1 establishes general requirements for the disclosure of material sustainability-related financial information; and
CSDS 2 focuses on disclosures of material information on critical climate-related risks and opportunities.

The CSSB has also introduced the Criteria for Modification Framework which outlines the criteria under which the IFRS Sustainability Disclosure Standards developed by the ISSB may be modified for Canadian entities.
CSSB Interim Chair, Bruce Marchand has stated that the introduction of these standards “signifies our commitment to advancing sustainability reporting that aligns with international baseline standards – while reflecting the Canadian context. These standards set the stage for high-quality and consistent sustainability disclosures, essential for informed decision-making and public trust”.
Other features of the CSDS include:

Transition relief through extended timelines for adoption;
Its voluntary adoption by entities, unless mandated by governments or regulators in the future; and
Its role in being the first part of a multi-year strategic plan by the CSSB which includes building partnerships with First Nations, Métis and Inuit Peoples to ensure Indigenous perspectives are integrated into sustainability-related standards.

The authors would like to thank lawyer Harrison Langsford and graduates Daniel Nastasi and Katie Richards for their contributions to this alert.
Nathan Bodlovich, Cathy Ma, Daniel Shlager, and Bernard Sia also contributed to this post. 

Foley Automotive Update 19 February 2025

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.
Key Developments

Automakers and suppliers are delaying certain investment decisions and considering a range of scenarios to adjust production and supply chains in response to President Trump’s tariff policies that include a 25% tariff on certain automobile and semiconductor imports that could be announced as soon as April 2, the potential for broader “reciprocal tariffs” on all countries that tax U.S. imports, 25% levies on steel and aluminum imports, and uncertainty over proposed 25% tariffs on all U.S. imports from Mexico and Canada that were paused for a “one month period” as of February 3.
Major automakers are reported to be increasing their lobbying efforts over concerns certain tariff and trade policies of the Trump administration will lead to higher manufacturing costs and job losses in the U.S.
Foley & Lardner partner Greg Husisian provided insights in Manufacturing Dive on the potential ramifications of President Trump’s 25% tariffs on steeland aluminum imports, as well as commentary in CNN here and here regarding the Trump administration’s proposed “reciprocal tariffs” on numerous trading partners. Visit Foley & Lardner’s 100 Days and Beyond: A Presidential Transition Hub for more updates on policy analysis and the business implications of the Trump administration across a range of areas.
Vehicle imports represented 53% of 2024 U.S. new light-vehicle sales, according to analysis from GlobalData featured in CNBC. The top three nations for U.S. vehicle imports last year were Mexico (16.2%), Korea (8.6%) and Japan (8.2%).
Canada accounts for roughly 20% of U.S. steel imports and 50% of aluminum imports. The U.S. exported over $16 billion of steel and aluminum products to Canada in 2024.
Environmental Protection Agency Administrator Lee Zeldin on February 14 announced plans to submit certain California emissions waivers for Congressional review. The action could result in a repeal of waivers approved under the Biden administration that supported California’s Advanced Clean Cars II, Advanced Clean Trucks, and Omnibus NOx rules. Earlier this month, the U.S. Supreme Court denied the Trump administration’s request to pause three cases so the EPA could reevaluate Biden-era regulations that include the decision to grant California a Clean Air Act waiver allowing the state to implement its own greenhouse gas emissions standards for vehicles.

OEMs/Suppliers 

Ford informed suppliers it will delay the launch of its next-generation F-150 pickup truck, according to a report in Crain’s Detroit.
Ford reported 2024 net income of $5.9 billion on total revenue of $185 billion, representing year-over-year increases of 37% and 5%, respectively. The automaker projected its 2025 operating profit could decline by 17% to 31% YOY due to challenges that include pricing competitiveness, lower sales volumes, and the expectation for up to $5.5 billion in losses for its EV and software operations.
Private equity firm KKR and Taiwanese electronics giant Hon Hai Precision Industry (Foxconn) were reported to be considering investments in Nissan following the automaker’s breakdown of merger discussions with Honda.
GM laid off 79 hourly workers at its CAMI Assembly plant in Ingersoll, Ontario. The plant produces the BrightDrop electric commercial van.
Isuzu will invest $280 million to establish a commercial truck manufacturing plant in South Carolina.
GM intends to close a plant in Shenyang, China, as part of a broader restructuring in the nation in response to declines in market share, according to unnamed sources in Reuters.

Market Trends and Regulatory

The Wall Street Journal provided a breakdown of the U.S. market share and production of certain overseas automakers that could be affected by new import tariffs.
The Alliance for Automotive Innovation expressed its support for the nomination of Jonathan Morrison to serve as Administrator of the National Highway Traffic Safety Administration. Morrison most recently held a position at Apple, and he previously served as NHTSA’s Chief Counsel during the first Trump administration.
A Rhode Island federal judge ruled on February 10 that substantive effects have persisted for the now-rescinded January 27 Office of Management and Budget memorandum (M-25-13) that called for a freeze on certain federal grants, loans and other financial assistance. The judge also “rejected the administration’s argument that some funds — including assistance under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) — have remained properly frozen in an effort to ‘root out fraud,’ writing that his order required all frozen funding to be restored.”
Automakers are among the entities lobbying the Trump administration to pursue a gradual phaseout of certain EV tax credits rather than an abrupt end.
A Massachusetts federal judge ruled against automakers that sought to block implementation of the state’s “right-to-repair” law. In the lawsuit filed in 2020, automakers had cited concerns that included cybersecurity risks and the potential for inconsistencies with certain federal laws.
Automotive News provided an overview of the manufacturing investments that could beat risk if the IRA or large portions of it are repealed.
Auto insurance costs may rise for consumers if vehicle repair costs are impacted by tariffs on auto parts.
A report in Automotive News predicts an increase in automotive plants with the flexibility to produce multiple propulsion systems.
BYD is reported to be pursuing discussions to sell European automakers carbon credits to help mitigate the effects of stricter emissions standards in the European Union. The European Commission could announce an action plan next month in response to automakers’ concerns over the compliance costs associated with 2025 CO2 emissions targets in the bloc.
The Trump administration agreed to pause additional layoffs at the U.S. Consumer Financial Protection Bureau, according to a February 14 court order. However, the future of the lending institutions’ regulator is currently unclear.

Autonomous Technologies and Vehicle Software

BYD will include advanced driver-assistance systems as a standard feature in many of its future models sold in China at no additional cost to buyers. Capabilities of BYD’s “God’s Eye” system will vary depending on the vehicle classification. The automaker is also developing plans to integrate software from Chinese AI startup DeepSeek.
GM announced a goal for its Super Cruise hands-free driver-assist system to reach $2 billion in annual revenue within five years.
Industry stakeholders at the 5g Automotive Association symposium emphasized the importance for automakers to invest in vehicle-to-everything (V2X) connectivity.
Lyft plans to debut driverless rides in Mobileye-powered robotaxis as soon as next year, beginning in Dallas.

Electric Vehicles and Low Emissions Technology

J.D. Power predicts 2025 U.S. EV market share will hold at 9.1%,to match last year’s sales levels of 1.2 million units.
Toyota plansto begin shipping batteries for North American electrified vehicles from its Battery Manufacturing North Carolina plant in April 2025. This is Toyota’s first in-house battery manufacturing plant outside Japan and it represents nearly a $14 billion investment.
Electric truck maker Nikola filed for Chapter 11 bankruptcy protection.
Automaker-backed EV charging company Ionna plans to continue adding infrastructure at pace without relying on NEVI funding, with a priority on hubs around cities to serve drivers that are not able to install a home charger. 
Rivian’s electric van is now available for purchase by any entities with a fleet of commercial vehicles. The vehicles were previously exclusively sold to Amazon.
A group of Republican senators introduced legislation to establish a $1,000 tax on new EV purchases to fund federal road repairs.

Analysis by Julie Dautermann, Competitive Intelligence Analyst

Texas Senate Bill 6 and Impacts on Large Load Development in ERCOT

On 12 February 2025, Texas Senate Bill 6 (SB6), authored by Sen. Phil King and Sen. Charles Schwertner, was filed. The low bill number on this indicates it is a priority bill and will likely have momentum. If passed, this bill will directly impact entities currently in or contemplating a co-location arrangement in the Electric Reliability Council of Texas (ERCOT) region. A co-location arrangement is where generation and load are located at the same point on the grid.
If passed, SB6 would require the Texas Public Utility Commission (PUC) to, “implement minimum rates that require all retail customers in that region [ERCOT] served behind-the-meter to pay retail transmission charges based on a percentage of the customer’s non-coincident peak demand from the utility system as identified in the customer’s service agreement.” Many large load entities have pursued co-location arrangements to avoid transmission costs so if passed this will result in a shift. The bill would require the PUC to develop standards for interconnecting large loads in a way to “support business development” in Texas “while minimizing the potential for stranded infrastructure costs.”
Additionally, SB6, if passed, would require the PUC to establish standards for interconnecting large load customers at transmission voltage in ERCOT.  SB6 would have these interconnection standards apply to facilities with a demand of 75 MW or more but allows the PUC to determine a lower threshold if necessary.  As part of these interconnection standards, the large load customer must disclose to the utility whether the customer is pursuing a duplicate request for electric service in another location (both within and outside of Texas), the approval of that duplicative request would cause the customer to change or withdraw their interconnection request. This likely would result in the utility having a better sense of which large load will move forward in the interconnection queue versus those that are duplicative. The large load customer would also be required to disclose information about its on-site backup generating facilities. The bill would allow ERCOT, after reasonable notice, to deploy the customer’s on-site backup generating facility. As part of the PUC standards for interconnection, the large load customer would have to provide proof of financial commitment which may include security on a dollar per MW basis, as set by the PUC.
SB6 also requires a co-located power generation company, municipally owned utility, or electric cooperative, to submit a notice to the PUC and ERCOT before implementing a new net metering arrangement between a registered generation resource and an unaffiliated retail customer if the retail customer’s demand exceeds 10% of the unit’s nameplate capacity and the facility owner has not proposed to construct an equal amount of replacement capacity in the same general area.  Additionally, SB6 would require a new net metering arrangement be consented to by the electric cooperative, electric utility, or municipally owned utility certified to provide retail electric service at the location. The PUCT would have 180 days to approve, deny, or impose reasonable conditions on the proposed net metering arrangement, as necessary to maintain system reliability. Such conditions may include:

That behind-the-meter load ramp down during certain events;
That generation reenter energy markets in the ERCOT power region during certain events; and
That the generation resource will be held liable for stranded or underutilized transmission assets resulting from the behind-the-meter operation.

If the PUC does not act within the 180-day period, the arrangement would be deemed approved.
SB6 would also require large load that is interconnected after 31 December 2025 to install equipment that allows the load to be remotely disconnected during firm load shed.   Finally, SB6 would require the PUC to study whether 4 Coincident Peak transmission cost allocation is appropriate.

Texas’ Power Transmission Infrastructure: Addressing Growing Demand from Data Centers and Crypto Mining

Texas is facing a rapidly evolving energy landscape, driven in part by the surging power demands of data centers and cryptocurrency mining operations. As the digital economy expands, the state’s existing power transmission infrastructure must adapt to ensure grid reliability, affordability and sustainability. However, the growing demand for electricity raises critical challenges, including the need for additional transmission capacity, grid resilience, and fair cost allocation for new infrastructure investments.
Rising Energy Demand from Data Centers and Crypto Mining
Texas has become a prime location for data centers and cryptocurrency mining operations due to its deregulated energy market, favorable business climate and relatively low electricity costs. Data centers, which support cloud computing, artificial intelligence (AI), and financial transactions, require vast amounts of power, often operating 24/7. Similarly, cryptocurrency mining facilities run continuously, consuming significant amounts of electricity to maintain blockchain networks.
The Electric Reliability Council of Texas (ERCOT) projects that power demand from these industries will grow substantially in the coming years. Consumption of electricity from large flexible loads such as data centers and crypto mining facilities is projected to account for 10% of ERCOT’s total forecasted electricity consumption in 2025.  ERCOT currently expects power demand to nearly double by 2030.  Without strategic infrastructure upgrades, this demand would likely strain the grid, increase congestion and lead to higher electricity prices for consumers.
Challenges with Existing Transmission Infrastructure
Texas operates its own independent power grid, which provides flexibility but also limits its ability to import electricity from neighboring states during periods of high demand. The state’s transmission infrastructure has already faced challenges in keeping up with rapid population growth and extreme weather events.  In 2021, Winter Storm Uri exposed vulnerabilities in the grid, leading to widespread outages and highlighting the need for greater investment in both generation and transmission capacity.
One major challenge is that much of Texas’ renewable energy generation—especially wind and solar—is located in rural areas, far from major load centers like Dallas, Houston and Austin. Without sufficient transmission capacity, this clean energy cannot be efficiently delivered to where it is needed. The addition of high-energy-consuming industries like data centers and crypto mining exacerbates this challenge by increasing congestion on existing transmission lines.
The Need for Additional Transmission Infrastructure
To accommodate the growing energy needs, Texas must significantly expand its high-voltage transmission network. New transmission lines are necessary to:

Relieve Grid Congestion – increasing transmission capacity reduces bottlenecks that can drive up energy prices and cause reliability concerns.
Enhance Grid Resilience – strengthening transmission infrastructure can help prevent widespread outages during extreme weather events.
Support Renewable Integration – more transmission lines will allow Texas to take full advantage of its abundant wind and solar resources by connecting them to high-demand areas.
Ensure Reliability for Data Centers and Crypto Mining – dedicated infrastructure planning can ensure that new energy-intensive operations do not disrupt service for residential and commercial consumers.

The Costs of Transmission Expansion
One of the biggest questions surrounding transmission expansion is funding. Historically, Texas has used a mix of ratepayer contributions, state incentives, and private investments to build and maintain its power infrastructure. There are several potential funding mechanisms for new transmission lines:
   •   Ratepayer Contributions – transmission costs are often passed on to consumers through electricity bills. However, increasing rates to fund expansion may face resistance, especially if residential and small-business customers bear a disproportionate burden of the cost.
   •   ERCOT Transmission Cost Recovery – ERCOT has a cost allocation model that spreads transmission investments across various market participants. This approach ensures that those benefiting from the upgrades contribute to the costs.
   •   Direct Charges on Large Energy Consumers – one potential policy solution is to require data centers and crypto mining companies to pay a larger share of transmission infrastructure costs. Special tariffs or direct infrastructure investment agreements could be established to ensure that these industries contribute fairly.
   •   Public-Private Partnerships – collaboration between the state government, utilities, and private investors could help finance large-scale transmission projects. In some cases, tax incentives or low-interest financing options could encourage private sector investment in critical infrastructure.
   •   Federal Funding and Grants – the federal government has recently made funding available for grid modernization projects through the Infrastructure Investment and Jobs Act. The new administration has called some of this into question. Texas could leverage these funds to supplement state and private investments.
Balancing Growth and Grid Reliability
Expanding transmission infrastructure is essential, but it must be done in a way that balances economic growth with grid reliability. Policymakers must ensure that the costs are distributed equitably and that the grid remains stable during periods of high demand. Additionally, investments in energy storage, smart grid technology, and demand response programs can complement transmission expansion by improving overall efficiency.
Texas has long been a leader in energy innovation, and addressing these transmission challenges will be critical to the state maintaining that position. By implementing forward-thinking policies and funding strategies, the state can support its growing digital economy while ensuring a reliable and affordable power supply for all consumers.

Context for the Five Pillars of EPA’s ‘Powering the Great American Comeback Initiative’

On February 4, new US Environmental Protection Agency (EPA) Administrator Lee Zeldin announced EPA’s “Powering the Great American Comeback Initiative,” which is intended to achieve EPA’s mission “while emerging the greatness of the American Economy.” The initiative has five “pillars” intended to “guide the EPA’s work over the first 100 days and beyond.” These are:

Pillar 1: Clean Air, Land, and Water for Every American.
Pillar 2: Restore American Energy Dominance.
Pillar 3: Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership.
Pillar 4: Make the United States the Artificial Intelligence Capital of the World.
Pillar 5: Protecting and Bringing Back American Auto Jobs.

Below, we break down each of the five pillars and present context what these pillars may mean to the regulated community.
Pillar 1: “Clean Air, Land, and Water for Every American”
The first pillar is intended to emphasize the Trump Administration’s continued commitment to EPA’s traditional mission of protecting human health and the environment, including emergency response efforts. To emphasize this focus, accompanied by Vice President JD Vance, Zeldin’s first trip as EPA Administrator was to East Palatine, Ohio, on the two-year anniversary of a train derailment. While there, Administrator Zeldin noted that the “administration will fight hard to make sure every American has access to clean air, land, and water. It was an honor to meet with local residents, and I leave this trip more motivated to this cause than ever before. I will make sure EPA continues to clean up East Palestine as quickly as possible.” After surveying the site of the train derailment to survey the cleanup, Zeldin and Vance “participated in a meeting with local residents and community leaders to learn more” about how to expedite the cleanup.
Taken alone or in conjunction with Administrator Zeldin’s trip to an environmentally impacted site in Ohio, Pillar 1 appears consistent with past EPA practice.
Read in the context of the Trump Administration’s first-day executive orders (for more, see here) and related actions such as a memoranda from Attorney General Pam Bondi on “Eliminating Internal Discriminatory Practices” and “Rescinding ‘Environmental Justice’ Memoranda.” Pillar 1 should be construed as meaning that EPA no longer intends to proactively work to redress issues in “environmentally overburdened” communities. Consequently, programs under the Biden Administration that focus on environmental justice (EJ) and related equity issues are ended. (For more, see here.)
Pillar 2: Restoring American Energy Dominance
Pillar 2 focuses on “Restoring American Energy Dominance.” What this means in practice is little surprise given President Trump’s promises during his inauguration to “drill, baby, drill.” Two first-day Executive Orders provide further context to this pillar:

The Executive Order “Declaring a National Energy Emergency” declares a national energy emergency due to inadequate energy infrastructure and supply, exacerbated by previous policies. It emphasizes the need for a reliable, diversified, and affordable energy supply to support national security and economic prosperity. The order calls for immediate action to expand and secure the nation’s energy infrastructure to protect national and economic security.
The Executive Order on “Unleashing American Energy,” seeks to encourage the domestic production of energy and rare earth minerals while reversing various Biden Administration actions that limited the export of liquid natural gas (LNG), promoted electric vehicles and energy efficient appliances and fixtures, and required accounting for the social cost of carbon. (For context on the social context of carbon, see here and here.)

Pillar 3: Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership
Pillar 3 focuses on government efficiency including permitting reform, cooperative federalism, and cross-agency partnerships. As with Pillar 1, two of these goals (cooperative federalism and cross-agency partnership) are generally consistent with typical agency practice across all administrations even if administrations approach them in different ways.
“Permitting reform” generally means streamlining the permitting processes so that the time from permitting submission to conclusion is shorter.
Current events, most notably three court decisions involving the National Environmental Policy Act (NEPA), require a deeper exploration of “permitting reform.” NEPA is a procedural environmental statute that requires federal agencies to evaluate the potential environmental impacts of major decisions before acting and provides the public with information about the environmental impacts of potential agency actions. The Council on Environmental Quality (CEQ), an agency within the Executive Office of the president, was created in 1969 to advise the president and develop policies on environmental issues, including ensuring that agencies comply with NEPA by conducting sufficiently rigorous environmental reviews.
Energy-related infrastructure ranging from transmission lines to ports needed to ship LNG often require NEPA reviews. During his first term, President Trump sought to streamline NEPA reviews. As we previously discussed, in 2020, CEQ regulations were overhauled to exclude requirements to discuss cumulative effects of permitting and, among other things, to set time and page limits on NEPA environmental impact statements. During the Biden Administration, in one phase of revisions, CEQ reversed course to undo the Trump Administration’s changes, and, in a second phase, the Biden Administration required evaluation of EJ concerns, climate-related issues, and increased community engagement. (For more, see here.) Predictably, litigation followed these changes. Additionally, we are waiting on the US Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, which addresses whether NEPA requires federal agencies to identify and disclose environmental effects of activities which are outside their regulatory purview.
These two recent decisions add to the ongoing debate about whether CEQ ever had the authority to issue regulations that have been relied upon for decades. These include the DC Circuit’s decision in Marin Audubon Society v. FAA (for more, see here) and a second decision by a North Dakota trial court in in Iowa v. Council on Environmental Quality.
Pillar 4: Make the United States the Artificial Intelligence Capital of the World
EPA’s Pillar 4 seeks to promote artificial intelligence (AI) so that America is the AI “Capital of the World.”
AI issues fall into EPA’s purview because development of AI technologies is highly dependent on electric generation, transmission, and distribution. EPA plays a key role in overseeing permitting and compliance activities related to facilities like these. As we have discussed, AI requires significant energy to power the data centers it needs to function, and a study indicates that the carbon footprint of training a single AI natural language processing model produced similar emissions to 125 round-trip flights between New York and Beijing. Because data center developments tend to be clustered in specific regions, more than 10% of the electricity consumption in at least five states is used by data centers. (Report available here.)
Pillar 5: Protecting and Bringing Back American Auto Jobs
Pillar 5 focuses on supporting the American automobile industry. As was discussed in relation to Pillar 2, EPA seeks to support the American automobile industry. Regarding this sector, EPA intends to “streamline and develop smart regulations that will allow for American workers to lead the great comeback of the auto industry.” Additionally, the US Office of Management and Budget released a memo on January 21, clarifying that provisions of the “Unleashing American Energy” Executive Order were intended to pause disbursement of Inflation Reduction Act funds, including those for electric vehicle charging stations.
While the particulars of this pillar are less clear than some others, we expect that EPA’s efforts in this area will involve some combination of permitting reform and rollback to prior EPA decisions related to vehicle emissions.

Strategic Dialogue With The European Automotive Industry

As announced by President Ursula von der Leyen to the European Parliament on 27 November 2024, and as formally incorporated into the Communication A Competitiveness Compass for the EU (COM(2025) 30 final), published on 29 January 2025, the European Commission launched a Strategic Dialogue with the European automotive industry, social partners, and other key stakeholders on 30 January 2025. This initiative responds to growing concerns from EU Member States and industry stakeholders regarding the declining competitiveness of the European automotive sector. The EU faces mounting competitive pressures from third-country manufacturers and the necessity of meeting increasingly stringent decarbonization objectives.
Pursuant to point 1.2, page 10 of the Communication Competitiveness Compass for the EU, the strategic dialogue will directly contribute to the development of an EU Industrial Action Plan for the automotive sector. This plan is expected to incorporate ambitious supply- and demand-side initiatives, including a proposal on greening corporate fleets. In this context, President von der Leyen has tasked Commissioner Apostolos Tzitzikostas with presenting an Automotive Industry Action Plan on 5 March 2025. It is anticipated that the findings of the Strategic Dialogue will be integrated into this Action Plan, ensuring a coherent and forward-looking strategy for the sector.
The inaugural high-level meeting of the Strategic Dialogue convened on 30 January 2025 and brought together 22 key industry organizations, including leading manufacturers, suppliers, trade unions, and consumer representatives. Participants included ACEA (The European Automobile Manufacturers’ Association), BEUC (The European Consumer Organisation), BMW Group, Robert Bosch GmbH, ChargeUp Europe, CLEPA (The European Association of Automotive Suppliers), Daimler Truck, ETF (European Transport Workers’ Federation), Forvia, IndustriAll European Trade Union, IVECO Group, MAHLE Group, MILENCE, RECHARGE, and Renault Group, among others.
The Strategic Dialogue will continue with a series of regular meetings and workshops that will engage industry representatives, social partners, and policymakers, as well as broader consultations involving additional stakeholders from across the automotive value chain.
The discussion will focus on the following key themes and priorities:

Innovation and future technologies – Address the EU’s lag in key technologies (e.g., batteries, software, autonomous driving) by fostering R&D collaboration, talent acquisition, and risk-sharing models
Clean transition and decarbonization – Focus on regulatory revisions, charging infrastructure expansion, and demand-stimulation measures to accelerate the shift to clean mobility while addressing affordability and equity issues
Competitiveness and resilience – Tackle high input costs, supply chain vulnerabilities, and workforce upskilling to ensure the sector’s long-term resilience
Trade and global competition – Address unfair practices in global markets, strengthen EU trade policies, and monitor foreign investments in the supply chain
Regulatory streamlining – Optimize the EU’s regulatory framework to enhance coherence, reduce industry burdens, and promote common technical standards

Upon completion of these discussions, the European Commission is expected to present a report to the European Parliament and the Council, outlining the challenges identified by stakeholders and proposing corresponding policy actions. In accordance with the Competitiveness Compass, this report is expected to be published in the first quarter of 2025.
For operators in the automotive industry, this is a critical moment that necessitates close monitoring of ongoing developments at the EU level. These developments include, in summary: the adoption of a report that will be submitted to Parliament and the Council, incorporating the challenges identified by stakeholders and the recommended policy actions arising from the Strategic Dialogue; the presentation of an Automotive Industry Action Plan, the precise scope of which remains undetermined, though it is anticipated to serve as a strategic political directive for the sector; and the introduction of a legislative proposal concerning the greening of corporate fleets, which is expected to be part of the Automotive Industry Action Plan.
Once the Automotive Industry Action Plan is published, we will have greater clarity on the specific regulatory measures that the European Commission intends to pursue. While the precise scope of the plan remains to be seen, it is already known that it will include a legislative proposal on greening corporate fleets. This proposal is expected to play a significant role in shaping industry obligations and opportunities in the transition to more sustainable mobility.
We will continue to monitor these developments and provide clients with timely insights and strategic guidance on how these forthcoming regulatory changes may impact their business operations.

Foley Automotive Update 05 February 2025

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.
Key Developments

Foley & Lardner LLP partner Vanessa Miller commented on the risk of increased costs in the automotive supply chain that could result from new import tariffs in The Wall Street Journal article, “Tariff Threat Prompts Automakers to Find New Suppliers, Consider Higher Prices.”
Foley & Lardner’s Vanessa Miller and Ki Lee Kilgore provided an overview of contractual provisions to cope with increasing tariffs and trade wars.
President Trump’s proposed 25% tariffs on U.S. imports from Mexico and Canada – paused for a “one month period” as of February 3 – could cost automakers up to $110 million daily and $40 billion annually. North American production shutdowns would be a significant risk within a week of the implementation of such tariffs, according to an executive at Canadian Tier One supplier Linamar. In addition, the price of a new vehicle could jump by at least $3,000 on average, to as much as $10,000, depending on the model.
A report in Automotive News remarked on the divergence between automakers’ and suppliers’ public statements on the impact of potential tariffs to the North American auto industry.
Mexico’s automotive exports reached $193.9 billion in 2024 and accounted for roughly 30% of U.S. imports from the nation, according to data from INEGI excerpted in Mexico News Daily.
Vehicles and auto parts accounted for 21% of Canada’s U.S. exports in the first eleven months of 2024. Canadian automotive exports were valued at over $100 billion in 2023.
At least four major automakers produce roughly 40% of their vehicles in Mexico and Canada, and of the major automakers, GM is believed to be the most vulnerable to the proposed 25% tariffs. In 2024, GM sold 2.7 million vehicles, of which over 653,000 were assembled in Mexico for export to the U.S., and at least another 235,000 were produced in Mexico for non-U.S. markets. GM models with significant U.S. import volumes included the Chevrolet Equinox and Blazer SUVs, as well as Chevrolet Silverado and GMC Sierra pickup trucks.
Approximately half of light vehicles exported by Mexico to the U.S. in 2024 were made by Detroit automakers.
TD Economics analysis indicates North American auto parts “cross all three borders up to 7 to 8 times prior to final assembly of a vehicle,” and given the high integration of North American automotive supply chains, the auto sector “would face some of the deepest negative impacts from tariffs.”
In response to President Trump’s launch of new 10% tariffs on all Chinese imports, China announced retaliatory actions including import tariffs that could soon impose a 10% levy on certain U.S.-made large-engine light vehicles and electric trucks.
On January 28 former U.S. congressman and Fox News contributor Sean Duffy was sworn in as the Secretary of the U.S. Department of Transportation. In his first act after being sworn in, Duffy directed the National Highway Traffic Safety Administration (NHTSA) to immediately review and reconsider all existing Corporate Average Fuel Economy (CAFE) standards for vehicles produced from the 2022 model year onward.
The Trump administration on January 24 asked the U.S. Supreme Court to pause three cases while the Environmental Protection Agency reviews previous regulatory decisions in areas that include the Clean Air Act waiver that allows California to implement its own greenhouse gas emissions standards for automobiles.
Preliminary estimates suggest U.S. new light-vehicle sales reached a SAAR of roughly 15.8 million units in January, up 5% year-over-year, but falling short of industry projections.

OEMs/Suppliers 

The top five automakers ranked by 2024 global vehicles sales were Toyota, for the fifth consecutive year, followed by Volkswagen, Hyundai Motor Group, BYD and Honda. Last year, Toyota’s global sales declined 3.7% YOY to 10.8 million units, Volkswagen’s sales fell 2.3% to 9.03 million units, and BYD’s global sales increased 41% to 4.27 million units.
GM’s 2024 adjusted pre-tax earnings rose 21% to a record-high $14.9 billion last year, and total revenue rose 9.1% to $187.4 billion. However, net income fell 41% year-over-year to $6 billion, due to restructuring charges for its operations in China.
American Axle will acquire U.K.-based Dowlais Group for $1.4 billion. Dowlais’ businesses include driveline systems manufacturer GKN Automotive.
Following a meeting with President Trump, Stellantis committed to opening its idled plant in Belvidere, Illinois to produce a new mid-size pickup truck in 2027. The automaker had indefinitely postponed plans to reopen the plant following an initial commitment made during the 2023 labor contract negotiations. Stellantis also announced investments to support production at existing plants in Michigan, Ohio and Indiana.
Honda will invest $1 billion, up from a previous target of $700 million, in three plants in Ohio that will have the flexibility to produce ICE, hybrid and battery-electric vehicles on the same production lines.
Nissan will reduce U.S. production by 25%, and the automaker has offered voluntary buyouts to workers at its factories in Tennessee and Mississippi. Last year Nissan announced it would eliminate 20% of its global manufacturing capacity in response to weak sales in China and the U.S.
Chinese automakers are reported to be considering purchasing surplus production lines at Volkswagen’s factories in Germany.
A number of automakers have told dealers they plan to introduce lower-cost models as concerns over vehicle affordability push certain buyers out of the market.

Market Trends and Regulatory

The annual AlixPartners Disruption Index ranked automotive as the “most disrupted” major industry for the first time, reversing two consecutive years of improvement. Key concerns included a lack of real-time visibility into supply chains, the risk of tariffs and protectionism, and high costs for raw materials.
A Fifth Circuit panel invalidated the Combating Auto Retail Scams (CARS) rule issued by the Federal Trade Commission (FTC) in December 2023, after finding the FTC did not provide an advanced notice of proposed rulemaking. The CARS rule included requirements for certain dealership advertising, finance and insurance practices.
NHTSA paused a rule that would require nearly all new light vehicles to be equipped with automatic emergency braking (AEB) systems by 2029. The delay was in response to a January 20 Regulatory Freeze Pending Review Presidential Memorandum directed at executive departments and agencies. The regulation had been finalized in April 2024.
The AM Radio for Every Vehicle Act of 2025 (S.315) was introduced in the U.S. Senate in an effort to begin a rulemaking process to require the inclusion of AM receivers as standard equipment in all passenger vehicles sold in the U.S. Similar legislation failed to reach a full floor vote last year.
Newly elected U.S. Senator Bernie Moreno (R-OH) described plans to introduce an “Automotive Freedom Act” that would restrict battery production subsidies and eliminate the leasing loophole for consumer EV tax credits. Moreno said his bill wouldseek to harmonize NHTSA’s CAFE standards and the EPA’s tailpipe pollution limits to “one national standard” that extends 10 years.
The Alliance for Automotive Innovation filed a lawsuit in federal court in Maine to challenge enforcement of the state’s Right to Repair Law. The Alliance indicated compliance is not yet possible because the state’s Attorney General has not established the “independent entity” described in the law to develop and administer data access to vehicles.
The American Trucking Association projects truck volumes will increase 1.6% in 2025, following two consecutive years of sales declines.
Among the European automakers, Volkswagen is thought to be at high risk to proposed U.S. tariffs on Mexican imports. VW has one U.S. manufacturing plant in Chattanooga, TN. However, its Puebla plant is described as the largest vehicle assembly plant in Mexico.
Volkswagen estimated it could incur up to €1.5 billion ($1.6 billion) in compliance costs and penalties this year due to stricter CO2 emissions standards in the European Union that will apply starting in 2025.

Autonomous Technologies and Vehicle Software

Waymo plans to expand its autonomous vehicle testing to over 10 new cities in 2025, beginning with Las Vegas and San Diego.
NHTSA launched an investigation into Ford’s BlueCruise automated driving system following notice of two fatal collisions involving Mustang Mach-E vehicles.
Autonomous truck developer Kodiak Robotics announced the launch of commercial operations following the sale of two self-driving trucks to oil and gas service company Atlas Energy Solutions to haul fracking sand across a 75,000 square mile area of the Permian Basin.
Toronto-based Waabi Innovation Inc. will provide its generative artificial intelligence driver system to Volvo to support the companies’ joint development of autonomous trucks. Waabi Driver AI software has also been deployed in a small fleet of autonomous trucks for Uber Freight.
Acura and Honda announced a recall of nearly 295,000 vehicles due to a software issue in the fuel injection control unit that may cause vehicles to stall or lose power while driving.

Electric Vehicles and Low Emissions Technology

Automotive News provided a summary and additional context for recent EV-related policies and statements of President Trump.
Recently announced EV model cancelations include:

While Stellantis is planning to offer an electric RAM 1500 REV pickup truck with up to 350 miles of range beginning in 2026, the automaker is reported to have canceled plans for an extended-range version of the REV with up to 500 miles of range.
Stellantis’ Chrysler Airflow EV has been postponed indefinitely. The electric SUV debuted as a concept vehicle in 2022.
Nissan will no longer produce a crossover EV model at its Canton, Mississippi plant. 
Volkswagen no longer plans to offer an ID.7 electric sedan in the U.S. market.

ZM Trucks, a subsidiary of ZO Motors, plans to manufacture zero-emission commercial vehicles at a new plant in Fontana, California starting in the first half of 2025.
A number of automakers are suing the European Commission over opposition to the EU’s import tariffs on EVs that are made in China.
Hyundai could finalize an agreement in the first quarter of 2025 to supply its re-badged commercial EVs to GM. The automakers announced a preliminary agreement last year to collaborate on parts procurement and production for certain passenger and commercial vehicles.

Analysis by Julie Dautermann, Competitive Intelligence Analyst

Regulation Round Up: January 2025

Welcome to the Regulation Round Up, a regular bulletin highlighting the latest developments in UK and EU financial services regulation.
Key developments in January 2025:
31 January
UK Listing Rules: The FCA published a consultation paper (CP25/2) on further changes to the public offers and admissions to trading regime and to the UK Listing Rules.
Cryptoassets: The European Securities and Markets Authority (“ESMA”) published a supervisory briefing on best practices relating to the authorisation of cryptoasset service providers under the Regulation on markets in cryptoassets ((EU) 2023/1114) (“MiCA”).
FCA Handbook: The Financial Conduct Authority (“FCA”) published Handbook Notice 126, which sets out changes to the FCA Handbook made by the FCA board on 30 January 2025.
Public Offer Platforms: The FCA published a consultation paper on further proposals for firms operating public offer platforms (CP25/3).
30 January
FCA Regulation Round-Up: The FCA published its regulation round-up for January 2025, which covers, among other things, the launch of “My FCA” in spring 2025 and changes to FCA data collection.
29 January
EU Competitiveness: The European Commission published a communication on a Competitiveness Compass for the EU (COM(2025) 30). Please refer to our dedicated article on this topic here.
EMIR 3: ESMA published a speech given by Klaus Löber, Chair of the ESMA CCP Supervisory Committee, that sets out ESMA’s approach to the mandates assigned to it by Regulation (EU) 2024/2987 (“EMIR 3”).
28 January
EMIR 3: The European Systemic Risk Board published its response to ESMA’s consultation paper on the conditions of the active account requirement under EMIR 3.
ESG: The FCA published its adaptation report, which provides an overview of the climate change adaptation challenges faced by financial services firms.
27 January
Artificial Intelligence: The Global Financial Innovation Network published a report setting out key insights on the use of consumer-facing AI in global financial services and the implications for global financial innovation.
DORA: The Joint Committee of the European Supervisory Authorities (“ESAs”) published the terms of reference for the EU-SCICF Forum established under the Regulation on digital operational resilience for the financial sector ((EU) 2022/2554) (“DORA”).
24 January
Cryptoassets: ESMA published an opinion on draft regulatory technical standards specifying certain requirements in relation to conflicts of interest for cryptoasset service providers under MiCA.
MiFIR: The European Commission adopted a Delegated Regulation (C(2025) 417 final) (here) supplementing the Markets in Financial Instruments Regulation (600/2014) (“MiFIR”) as regards OTC derivatives identifying reference data to be used for the purposes of the transparency requirements laid down in Articles 8a(2), 10 and 21.
ESG: The EU Platform on Sustainable Finance published a report providing advice to the European Commission on the development and assessment of corporate transition plans.
23 January
Financial Stability Board: The Financial Stability Board published its work programme for 2025.
20 January
Motor Finance: The FCA published its proposed summary grounds of intervention in support of its application under Rule 26 of the Supreme Court Rules 2009 to intervene in the Supreme Court motor finance appeals.
Motor Finance: The FCA published its response to a letter from the House of Lords Financial Services Regulation Committee relating to the Court of Appeal judgment on motor finance commissions.
Cryptoassets: ESMA published a statement on the provision of certain cryptoasset services in relation to asset-referenced tokens and electronic money tokens that are non-compliant under MiCA.
17 January
DORA: The ESAs published a joint report (JC 2024 108) on the feasibility of further centralisation of reporting of major ICT-related incidents by financial entities, as required by Article 21 of DORA.
Basel 3.1: The Prudential Regulation Authority published a press release announcing that, in consultation with HM Treasury, it delayed the UK implementation of the Basel 3.1 reforms to 1 January 2027.
16 January
Cryptoassets: The European Banking Authority and ESMA published a joint report (EBA/Rep/2025/01 / ESMA75-453128700-1391) on recent developments in cryptoassets under MiCA.
14 January
FMSB’s Workplan: The Financial Markets Standards Board (“FMSB”) published its workplan for 2025.
FSMA: The Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025 (SI 2025/22) were published, together with an explanatory memorandum. The amendments allow the FCA to supervise, investigate and enforce the requirements of the designated activities regime.
Sanctions: HM Treasury and the Office of Financial Sanctions Implementation published a memorandum of understanding with the US Office of Foreign Assets Control.
13 January
BMR: The European Parliament published the provisionally agreed text (PE767.863v01-00) of the proposed Regulation amending the Benchmarks Regulation ((EU) 2016/1011) (“BMR”) as regards the scope of the rules for benchmarks, the use in the Union of benchmarks provided by an administrator located in a third country and certain reporting requirements (2023/0379(COD)).
10 January
Artificial Intelligence: The UK Government published its response to the House of Commons Science, Innovation and Technology Committee report on the governance of AI.
9 January
Collective Investment Schemes: The Financial Services and Markets Act 2000 (Collective Investment Schemes) (Amendment) Order 2025 (SI 2025/17) was published, together with an explanatory memorandum. The amendments clarify that arrangements for qualifying cryptoasset staking do not amount to a collective investment scheme.
8 January
EU Taxonomy: The EU Platform on Sustainable Finance published a draft report and a call for feedback on activities and technical screening criteria to be updated or included in the EU taxonomy. Please refer to our dedicated article on this topic here.
3 January
Consolidate Tape: ESMA published a press release launching the first selection for the consolidated tape provider for bonds.
 
Sulaiman Malik & Michael Singh contributed to this article.

D.C. Circuit Vacates PHMSA’s LNG-by-Rail Rule

On 17 January 2025, the D.C. Circuit Court of Appeals vacated a 2020 Pipeline and Hazardous Materials Safety Administration (PHMSA) rule—the “Hazardous Materials: Liquefied Natural Gas by Rail Rule” (the LNG-by-Rail Rule)—that allowed for the transportation of liquefied natural gas (LNG) on rail cars.1 The LNG-by-Rail Rule was challenged by a collection of environmental organizations, state governments, and tribal governments for failing to adequately consider the environmental impact of allowing LNG transport by rail. The decision to limit the domestic transportation of LNG conflicts with President Trump’s “American Energy Dominance” agenda and the stated intentions of the nominee for secretary of energy to expand US LNG infrastructure.2 In light of the D.C. Circuit vacating a PHMSA natural gas pipeline safety rule in August 2024 and the published-but-paused 17 January 2025 PHMSA final rule on pipeline methane emission detection requirements, this decision adds yet another element of regulatory uncertainty for domestic natural gas transportation as the second Trump administration prepares to implement its energy agenda.3
History of the LNG-by-Rail Rule 
The LNG-by-Rail Rule was first promulgated by PHMSA during the Trump administration in October 2019 and permitted LNG to be transported subject to specific rail car tank requirements and operational controls.4 PHMSA determined that the LNG-by-Rail Rule would not trigger the preparation of an environmental impact statement (EIS) pursuant to the National Environmental Policy Act (NEPA).5 The final rule was published in July 2020 but was promptly suspended in 2021 by President Biden in a series of executive actions that reconsidered various Trump administration rules and actions that were deemed inconsistent with the Biden administration’s climate policies.6 PHMSA implemented the suspension before LNG transport by rail could occur, and directed that the suspension would last until 30 June 2025 or until PHMSA completed rulemaking amending the LNG-by-Rail Rule, whichever occurred first.7
Despite the suspension of the LNG-by-Rail Rule, the Biden administration continued to defend the LNG-by-Rail Rule against challenges from environmental groups, state governments, and tribal governments.8 During oral argument, the federal government claimed that it had no intention of modifying the LNG-by-Rail Rule—meaning that the suspension would lift in 2025 and the LNG-by-Rail Rule would retake effect. Petitioners challenged, among other issues, PHMSA’s decision to forgo the preparation of an EIS as arbitrary and capricious. The D.C. Circuit agreed, vacating the LNG-by-Rail Rule and remanding to PHMSA for further proceedings.9
Summary of the LNG-by-Rail Rule 
In October 2019, PHMSA issued the Notice of Proposed Rulemaking in consultation with the Federal Railroad Administration after the Association of American Railroads (AAR) petitioned for a review of existing regulation concerning the transportation of LNG by rail.10 In its petition, the AAR cited the commercial interest in shipping LNG by rail, specifically from Pennsylvania to New England and between the US-Mexico border.11 The AAR noted that shipment by rail was “undeniably safer” that over-the-road transportation of LNG and compared LNG to the other, similar cryogenic liquids that PHMSA permits to be transported by rail.12 The petition specifically suggested that the DOT-113C120W (DOT-113) rail car be used for the shipment of LNG.13 
Nine months later, PHMSA published the final rule authorizing the transportation of LNG by rail in DOT-113 tank cars.14 DOT-113 cars are designed to carry cryogenic liquids and have “numerous safety features that reduce the risk of an explosion or the release of cargo.”15 DOT-113 rail cars have typically been used to transport refrigerated ethylene and argon, and PHMSA required a number of safety and operational updates for DOT-113 cars used for transporting LNG.16 First, The LNG-by-Rail Rule required several physical updates to tank cars transporting LNG, including increased tank thickness, improved steel quality, the installation of remote monitoring devices, and advanced braking technology.17 Second, the LNG-by-Rail Rule increased the maximum filling density of each tank to reduce the number of rail cars needed for LNG transport and required railroads to adopt routing safety requirements for analyzing LNG transportation routes.18 Notably, the LNG-by-Rail rule did not include speed limits or tank car-per-train limits for trains transporting LNG. 
PHMSA published an Environmental Assessment (EA) that “touted the demonstrated safety record” of the DOT-113 tank car and determined that the LNG-by-Rail Rule did not have a “significant impact on the human environment” and would therefore not require an EIS under Section 102(2) of NEPA.19 
Challenges to the LNG-by-Rail Rule 
A group of environmental petitioners, a collection of 15 states, and the Puyallup Tribe all petitioned the D.C. Circuit Court of Appeals to review the LNG-by-Rail Rule.20 The D.C. Circuit consolidated the appeals and reviewed petitioners’ arguments against the LNG-by-Rail Rule. Although the petitioners challenged the LNG-by-Rail Rule on multiple grounds, the D.C. Circuit only ruled on the question of whether PHMSA’s decision to forgo an EIS was arbitrary and capricious.21
Petitioners argued that PHMSA “disregarded” the DOT-113 tank car’s history of failure and ignored significant risk by failing to include car limits or speed limits for rail cars transporting LNG.22
The D.C. Circuit Court Ruling 
The D.C. Circuit sided with petitioners and vacated the LNG-by-Rail Rule. Judge Florence Pan authored the opinion, joined on the panel by Judges Patricia Millet and A. Raymond Randolph. Even though the LNG-by-Rail Rule was suspended and there was at least the theoretical possibility of pending rulemaking, the court concluded that the case was ripe for review. The court found that transporting LNG by rail poses a “low-probability but high-consequence risk” to the environment in the case of a derailment.23 The spread of a “suffocating vapor cloud” or an “explosion” of the flammable material were “real possibilities” that PHMSA failed to consider in its EA, according to the decision.24 The court held that PHMSA should have considered the history of DOT-113 car derailments—two derailments in the last four years—and concluded that the risk of another derailment was “neither remote nor speculative.”25 Given the small number of DOT-113 cars in use and the history of failure, the court held that PHMSA’s assessment of environmental risk was insufficient. 
Additionally, The D.C. Circuit held that by failing to impose a speed limit on rail cars transporting LNG or limit the number of LNG tank cars per train, the LNG-by-Rail Rule increased the risk of environmental impact from derailment.26 Although PHMSA did impose additional safety controls and mandated upgrades to the DOT-113 car, the court was unsatisfied by the safeguards and noted that PHMSA failed to explain how specific procedures were “adequate to address the extreme dangers associated with a derailment.”27 
The D.C. Circuit concluded that the risk of an accident while transporting LNG by rail under the LNG-by-Rail Rule was sufficiently significant to require an EIS and remanded the LNG-by-Rail Rule to PHMSA for further proceedings.28 The court noted that the LNG-by-Rail Rule “raise[d] substantial environmental questions” that may require further review once an EIS was prepared, but expressed no opinion on the “wisdom of any particular set of safety protocols” for transporting LNG by rail.29 
Revisiting the LNG-by-Rail Rule: The Trump Administration 
The D.C. Circuit’s ruling—which came down the Friday before President Trump’s inauguration—will add another layer of complexity to any effort to reinstate the LNG-by-Rail Rule. For now, this hurdle remains procedural. To reinstate the LNG-by-Rail Rule, PHMSA will have to prepare an EIS and take into account the environmental risks before approving the transportation of LNG by rail. And while the D.C. Circuit expressed “no opinion on the wisdom of any particular set of safety protocols,” it left the door wide open to later challenges, explaining that “future legal challenges to the substance of that decision would . . . be brought under some other statute, not NEPA.”30
The Trump administration has not made any comment on the D.C. Circuit ruling or the LNG-by-Rail Rule specifically. However, the new administration has taken several actions indicating a substantial departure from the Biden position on natural gas. President Trump’s day-one executive orders have directed federal agencies to begin reviewing any policies that affected domestic energy production. The “Unleashing American Energy” and the “Declaring a National Energy Emergency” executive orders identify the development, transportation, and export of natural gas as a top priority.31 
As the second Trump administration begins to take form and implement its “American Energy Dominance” agenda, regulating the domestic and international transportation of natural gas will remain a prominent focus. Over the coming months, the incoming leadership at the Departments of Energy, Interior, and Transportation are likely to act on a series of pressing natural gas policy questions. PHMSA will likely review major pipeline-related policies like the “Pipeline Safety: Gas Pipeline Leak Detection and Repair” rule finalized in the last days of the Biden administration but paused subject to President Trump’s “Regulatory Freeze Pending Review” executive order.32 Agencies have been granted emergency authority to “facilitate” domestic energy transportation, specifically on the West Coast, in the Northeast, and in Alaska.33 The Firm will continue to monitor this rapidly developing area of policy and provide relevant updates on our page. 
Footnotes

1 Sierra Club, et al., v. U.S. Dep’t of Transp., et al., 2025 WL 223869 (D.C. Cir. 2025).
2 Timothy Gardner, Trump’s Energy Department Pick Calls for More LNG and Nuclear Power, Reuters (Jan. 15, 2025), https://www.reuters.com/business/energy/trumps-energy-department-pick-call-more-lng-nuclear-power-2025-01-15/.
3 David Wochner, Tim Furdyna, Stuart Robbins, D.C. Circuit Vacates New PHMSA Rules Related to Natural Gas Pipelines, K&L Gates (Aug. 28, 2024), https://www.klgates.com/DC-Circuit-Vacates-New-PHMSA-Rules-Related-to-Natural-Gas-Pipelines-8-28-2024; Pipeline Safety: Gas Pipeline Leak Detection and Repair, Pipeline and Hazardous Materials Safety Administration, Docket No. PHMSA-2021-0039 (Jan. 17, 2025).
4 Unleashing American Energy, The White House (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-american-energy/.
5 Hazardous Materials: Liquefied Natural Gas by Rail, 85 Fed. Reg. 44994 (Jul. 24, 2020).
6 Exec. Order No. 13,990, 86 Fed. Reg. 7,037 (Jan. 20, 2021); Sierra Club at 10.
7 Sierra Club at 11.
8Id., at 10.
9 Id., at 24.
10 85 Fed. Reg. at 44996.
11 Petition for Rulemaking to Allow Methane, Refrigerated Liquid to be Transported in Rail Tank Cars, Association of American Railroads, PHMSA-2017-0020-0002 (Jan. 17, 2017) at 2.
12 Id., at 2-3.
13 Id., at 4.
14 85 Fed. Reg. at 44994.
15 Sierra Club at 6.
16 Id., at 20-21.
17 Id., at 9.
18 Id., at 9.
19 85 Fed. Reg. at 45027.
20 Sierra Club at 10 (Environmental petitioners included the Sierra Club, Center for Biological Diversity, Clean Air Council, Delaware Riverkeeper Network, Environmental Confederation of Southwest Florida, and Mountain Watershed Association; State petitioners included Maryland, New York, California, Delaware, the District of Columbia, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington).
21 Id., at 17 (Petitioners also brought claims under NEPA’s public participation requirement, the Hazardous Materials Transportation Act safety standards, the Administrative Procedure Act, and PHMSA’s failure to consider greenhouse gas emissions and environmental justice communities).
22 Id., at 17.
23 Id., at 19.
24 Id., at 19.
25 Id., at 20.
26 Id., at 22.
27 Id., at 23.
28 Id., at 24.
29 Id., at 23-24.
30 Id. at 23-24 n. 6.
31 Unleashing American Energy, The White House (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-american-energy/; Declaring a National Energy Emergency, The White House (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/.
32 Regulatory Freeze Pending Review, The White House (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/.
33 Declaring a National Energy Emergency, The White House (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/.