After a year of uncertain trade tariffs and geopolitical tensions, you might be thinking about 2026 He has To be a little easier for automakers. It may not be easy, but at least it’s predictable, right?
Well, maybe not. In fact, Hyundai Motor Group’s CEO warns that 2026 could be one of the toughest years the industry has faced in a long time. That’s saying a lot, considering how much volatility there will be for industry veterans and newcomers alike in 2025.
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Welcome back to Critical materialsYour daily report on everything related to electricity and technology in the field of cars. Also on deck: Electric vehicles take a back seat and Xiaomi’s car is betting on half a million cars. Let’s jump.
25%: Hyundai’s crystal ball predicts hardship for 2026
Photography: Patrick George
Yusun Chung, CEO of Hyundai Motor Group, has sounded the alarm about what a difficult year 2026 could become for the auto industry. Not just for Hyundai – although the South Korean automaker is likely at the top of his list of concerns – but for the entire global auto industry.
Things have changed. Free trade across one of the largest brand markets has become less about freedom and more about how well a country can negotiate tariffs for its various industries. This equates to billions of dollars annually, even for countries that play football. Hyundai, which has gone so far as to build factories in the United States to avoid import duties, is still paying the price.
Car News Reports:
In his New Year remarks, Chung warned that global trade tensions and intensifying competition would limit the industry’s profitability, while geopolitical conflicts may impact operations in some regions, which could lead to business suspension.
“This will be the year when the crisis factors we have always worried about become a reality,” Zhong said.
South Korea’s largest automaker was hit hard by the tariff system imposed by US President Donald Trump, which imposed a 15% tax on Korean-made cars. This cost Hyundai about 1.8 trillion won ($1.2 billion) in the third quarter alone.
Hyundai also faces tariffs on U.S.-manufactured vehicles shipped to Canada, where the federal government has implemented reciprocal duties on Trump’s tariffs.
Adding to the challenges, an immigration raid on a Hyundai-LG Energy Solution plant in the United States in September is expected to delay construction by at least two to three months.
Obviously, cars are Hyundai’s biggest concern. But as the industry shifts away from electric vehicles and toward artificial intelligence (more on this below), Hyundai knows it needs to innovate or it risks falling behind the competition.
Hyundai believes the answer is robotics. the “Physical artificial intelligence“Era, as some call it. Fortunately, Hyundai has robotics giant Boston Dynamics in its portfolio. The brand will use these skills to Build a giant robot army with a strength of 30,000 unitswhich will build its own cars, deliver your packages, and generally do mundane robotic tasks that even the biggest Silicon Valley giants can’t cope with.
“As the focus shifts toward physical AI, the value of our moving entities, such as cars and robots, and our manufacturing process data will become increasingly scarce,” Zhong said. “This is a powerful weapon that is unique to us and cannot be easily imitated by big tech companies.”
50%: Electric cars take a backseat to autonomous driving and artificial intelligence at CES 2026
Photo by: Hyundai
It wasn’t that long ago when CES looked like a big car show. EVs are out the wazoo (that’s the technical term), despite the show being a trade event meant to showcase the latest consumer technology like TVs and video games.
This year’s show is not like that. Experts and attendees say that sentiment is very much a pivot from a crash course in battery electric vehicles to full self-driving and artificial intelligence exhibition. These are the real money printers, after all, or at least that’s the flavor of the week.
That’s what Reuters knows:
In recent years, CES has emerged as a major destination for automakers debuting their electric vehicles.
But the Trump administration’s rollback of EV-friendly incentives and policies has weakened demand and forced many automakers to abandon plans to launch new electric vehicles and rethink their strategy.The disruption will be evident at CES. Most major automakers have no plans to launch any new electric vehicles this year, which is a stark difference from the past few years.
As mentioned above, political influences have certainly played a role in supporting electric vehicles. The next best thing (which is technically a driving factor for EVs, According to Rivian CEO RJ Scaringe) is self-driving.
This is where the money flows. Yes, although the cemetery is filled with tombstones of companies like Cruise, Argo and the like. Recent momentum from companies like Tesla and Waymo has revitalized the self-driving industry, and “eye-rolling” is the next big thing.
CJ Finn, automotive industry leader at Pricewaterhouse Coopers, explained to Reuters his view on why autonomous vehicles are becoming a laser-focused industry for companies across markets:
Commercializing self-driving vehicles has not been easy. High investments, regulatory challenges and post-collision investigations have forced many companies to close. But Tesla’s launch of a small robotaxi service with safety monitors in Austin, Texas, last year, combined with rapid expansion through Alphabet’s Waymo, has breathed new life into the industry.
Driver assistance systems for personal vehicles have also improved, with some automakers offering hands-free driving and automatic lane changes on highways. Some, like Rivian, aim to launch “look away” functionality and autonomous driving on city streets.
“This is starting to align with where people are putting their money and how they are allocating capital,” Finn said.
It’s hard to ignore that anxiety about cost still looms over everything. Automakers still absorb billions in electric vehicle writedowns and absorb tariffs while pivoting quickly behind To something he left in the dust years ago. Now there is increasing competition in the field of autonomy, especially in China.
This means that in order to stay relevant (and to fight off new car companies coming from the East), Western carmakers need to regain their share of buyers in global markets. This begs the question: Is autonomy an exciting new source of money, or just a move to appease Wall Street?
75%: Xiaomi, riding high in 2025, targets half a million cars in 2026
Photography: Patrick George
Xiaomi has hit the electric car industry like a tsunami. Coined as China’s Apple car, the SU7 sedan was an instant hit in Xiaomi’s home market, and the YU7 crossover soon followed. In 2025, its first full year, the brand sold a whopping 410,000 cars. For 2026, Xiaomi has set its sights higher to target more than 550,000 units. Here’s more Bloomberg:
Billionaire founder Lei Jun announced the target, which represents a 34% increase over last year’s sales of 410,000 vehicles, during a live broadcast on Saturday.
Xiaomi also plans to expand its portfolio beyond the SU7 sedan and YU7 sports car, and may launch four new and updated models in 2026, including a five-seat SUV and a seven-seat extended-range EV, Chinese outlet 34Kr reported on December 30. Long range electric cars have a small gasoline engine that recharges the battery when it runs out of power, providing a long range.
Xiaomi’s efforts have managed to attract the attention of some bigwigs. Ford CEO Jim Farley I didn’t want to stop driving itKarl-Thomas Neumann, former CEO of Volkswagen China, said the SU7 Ultra was a “high warning sign” for Western automakers. So it should come as no surprise that The automaker is looking to expand its product lineup to Europe in the future. Recent reports suggest that the brand is also expected to expand its lineup beyond the SU7 and YU7.
The company’s automotive unit also became profitable in record time. Xiaomi was able to achieve profitability in 18 months, which is about half the time it took Tesla to achieve the same feat. And it did so in a market saturated with electric car brands that are all struggling to make ends meet.
The 34% increase in sales represents a huge year-over-year jump for total sales. But as Xiaomi has already proven, anything is possible in the world of electric cars.
100%: Do you really want to drive yourself?
Photography: BYD
I keep hearing the term “personal autonomy.” It seems to be one of the biggest rising buzzwords in the auto industry, especially as brands look to find the next big thing that’s not related to batteries. However, brands seem to believe that everyone who buys a new car wants the car to be their personal driver (hence the race towards a self-driving future). What about you? Is this the factor that makes you choose a car over another option?
