The automotive industry is moving fast. From electrification to evolving regulations and a fast increase in new market entrants, the industry is navigating a changing landscape. Drawing on our work advising automotive industry participants, we have identified five key trends shaping the sector and the legal considerations behind them.
1. Electrification hits the real world
Electric vehicles remain central to the industry’s future, but expectations are not meeting reality. Slower adoption, supply constraints, and limited charging infrastructure pose a challenge to OEMs, particularly now that their fleets need to meet the new National Vehicle Emissions Standard. Dealers are adjusting facilities and inventory to meet changing demand, while hybrids continue to offer a popular middle ground.
2. Changes to retail and corporate structures
The automotive sector is seeing significant consolidation as dealer groups merge or are acquired to achieve scale, streamline operations, and adapt to changing market conditions. These transactions bring these groups opportunities to increase efficiency, expand their customer base, and invest in new technology. For OEMs, consolidation reshapes the sales and service network, requiring careful management of franchise agreements, supply arrangements, and reporting obligations. We’ve also seen some OEMs move away from the traditional dealer franchise model and adopt agency models, involving a major overhaul of supply, pricing and contractual arrangements.
3. ESG and sustainability under the microscope
Sustainability is now both a strategic and legal priority. OEMs and large dealer groups are embedding environmental targets and modern slavery risk obligations into contracts with suppliers. With ESG reporting requirements tightening globally and ‘greenwashing’ a key enforcement priority for regulators, businesses now face significant legal and reputational exposure for inaccurate or incomplete disclosures. Ensuring robust reporting processes, verifying data, and aligning marketing and operational practices with measurable, specific and achievable ESG commitments is essential to reduce regulatory risk.
4. Technology and data create new risks
The rise of connected vehicles is reshaping liability and compliance landscapes. Old laws don’t neatly apply to new technologies, so when launching connected vehicle features, OEMs must now consider a range of state and territory laws, ranging from road safety to telecommunications to surveillance. Detailed cybersecurity and product safety risk assessments are also required for connected vehicles. With increasing opportunities to commercialise vehicle data and analytics capabilities, OEMs face increasing scrutiny over the collection and use of telematics and customer data.
A new statutory tort for serious invasions of privacy and upcoming amendments to privacy laws require greater transparency around AI and automated decision-making processes using personal information, and it is essential for automotive businesses to integrate legal, compliance, and technology oversight into their strategy to anticipate and mitigate risks.
5. Customer complaints still in the spotlight
2025 reinforced a trend that has been building for years. Automotive complaints remain among the most reported issues under Australian Consumer Law. The ACCC received thousands of complaints about motor vehicle sales and repairs, mostly linked to breaches of consumer guarantees. Frustration grew over delays in EV and hybrid repairs, warranty disputes, and misleading advertising claims. Finance and insurance add-ons also remained under scrutiny.
Regulators have also been active in enforcing greenwashing claims, the Motor Vehicle Service and Repair Information Sharing Scheme and state-based dealer licensing legislation. For dealers and OEMs, the year highlighted that robust complaint handling and strict ACL compliance are critical.
Looking ahead
The automotive sector is evolving rapidly, and businesses face intertwined challenges across technology, regulation, and reputation. As 2026 approaches, legal strategy will be crucial for successful adaptation. With privacy and consumer laws tightening, ESG reporting expanding, and business models evolving, compliance can no longer sit in the passenger seat.
Organisations that embed legal risk management into commercial planning will not only minimise disputes, liability and enforcement penalties, but also gain a competitive advantage. Now is the time to stress test agreements, review compliance frameworks, and prepare for the next wave of regulatory change.
