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ARTICLE · 24 MARCH 2026

Automotive: The Turbulent Times Continue

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Herbert Smith Freehills Kramer LLP

Herbert Smith Freehills Kramer LLP

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The sector continues to undergo huge transformation in the form of its dual, simultaneous revolutions: the EV transition and the digital revolution, in particular, the journey towards connected...

United StatesTransport
Roddy Martin
Roddy Martin
Gavin Guo
Gavin Guo
Lerryn Martin
Lerryn Martin
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Last year we predicted that there would be no major reduction in the challenges faced by the automotive sector. And, unfortunately, we were right.

Turbulence continued throughout 2025 and the industry, once again, ranked highest in the annual AlixPartners Disruption Index. 

The sector continues to undergo huge transformation in the form of its dual, simultaneous revolutions: the EV transition and the digital revolution, in particular, the journey towards connected, software defined vehicles (SDVs). OEMs and suppliers are having to make these capital-intensive transitions in the face of significant headwinds. 

Geopolitical tensions (including tariffs) came to the fore in 2025, creating more unwelcome instability and impacting margins further. These tough economic conditions continued to impact vehicle affordability. Meanwhile, the pace of the EV transition has stuttered, compounded by policy reversals in the US, which has meant that OEMs and suppliers have had to take large

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