Compounding existing uncertainty, the February 2026 Supreme Court ruling striking down the administration’s IEEPA-based tariffs did not affect tariffs enacted under Section 232, including those on steel, aluminum and certain vehicles. Expect ongoing volatility to continue to impact vehicle availability, model mix and consumer demand. Dealers will need to stay agile, managing customer expectations and adapting pricing, incentives and inventory planning as trade policy continues to evolve. Software-Based Vehicles and Remote Updates Software-defined vehicles are increasingly shifting value received by reason of a vehicle sale from the point of the actual sale to some period after the sale when software activations and subscriptions are purchased, allowing manufacturers to monetize features that were traditionally sold through dealers. Some states, including California, have acted to limit certain subscription practices involving hardware already installed, reflecting concern that manufacturers are using software to eliminate dealer margin. This year, expanded use of over-the-air updates and remote feature activation is renewing pressure on dealer participation, compensation, and the definition of what constitutes sales and service activities, long held to be reserved to the dealer under the franchise laws. At the same time, longstanding right-to-repair and vehicle data access laws in states such as Massachusetts and Maine are colliding with software-driven vehicles, setting up further legal and economic challenges over control of diagnostics, data and the customer relationship. Advanced Driver Assistance and Automated Driving Technologies Advanced driver-assistance and automated-driving features are entering a more consequential phase as manufacturers take increasingly divergent approaches to autonomy, often tied directly to pricing and brand positioning. Some manufacturers are making more aggressive autonomy claims and monetizing advanced features, while others are taking a more cautious approach, creating competitive pressure on dealers depending on brand alignment. Regulators are signaling closer scrutiny of how these systems are marketed, deployed and monitored, particularly as higher-profile incidents drive calls for clearer guardrails. This year is shaping up to be a period of recalibration, where more aggressive autonomy strategies may be reined in, and clearer regulatory standards could give more cautious manufacturers greater confidence to expand features. Dealers should expect increased attention to disclosures, customer education and potential changes in how autonomy is sold, priced and regulated across brands. In 2026, U.S. auto dealers face major disruption and opportunity, and success will depend on embracing innovation, ensuring compliance and making informed decisions. Those who act swiftly and strategically will lead the industry’s next era of growth. 30
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