More than half of automotive businesses say supply chain issues are the biggest source of litigation risk exposure in 2026 as tariff-related fallout drives a wave of contract disputes, according to a study by US law firm Dykema.
Dykema’s 2026 Automotive Trends Report found that 61% of respondents were concerned about supply chain litigation, extending beyond traditional recall cost recovery into contractual disagreements.
Dykema said those disputes are being driven by fights over pricing adjustments, tariff responsibility and tariff-related cost recovery, particularly concerning tariff refunds where tariffs were paid but later contested.
The report notes that these disputes are coming at a time when manufacturers and suppliers are facing increased financial pressures, which is making supply-chain participants review contractual assumptions around capacity, pricing and long-term commitments.
Some 47% of respondents cited autonomous and ADAS (advanced driver assistance systems) product liability as the second biggest litigation exposure this year, followed by connected vehicle data privacy and cybersecurity class actions (41%) and EV battery fire and thermal runway litigation (39%).
When it comes to IP concerns, 53% cited IP theft as their number one worry, followed by ownership disputes over proprietary AI (35%) and AI patent eligibility under evolving US law (30%).
Dykema says the rise in concerns over IP theft is being driven by a shift in IP value from mechanical designs to innovations such as software algorithms, battery chemistries and manufacturing processes that can more easily be copied.
“Departing employees represent a primary threat vector, as engineers with expertise in electric vehicles, batteries and autonomous systems move between companies, sometimes taking proprietary code, designs or datasets with them,” Dykema said in the report.
Global supply chains also increase the risk of IP leakage, the report added.
More than half of respondents cited customs and border protection tariff and customs enforcement as their top regulatory compliance and enforcement risk in 2026 (52%), followed by National Highway Traffic Safety Administration scrutiny of recall remedies and completion rates (42%) and state and federal oversight of ADAS/ADS including crash reporting (32%).
The jump in concern over tariff and customs enforcement (up 28 percentage points since last year), comes as companies face audits, penalties and retroactive duty assessments that can result in significant financial hits for importers, Dykema says.
Laura Baucus, director of Dykema’s automotive, mobility and transport group, said: “Across the industry, issues that once felt emerging or contained to the boardroom are now showing up as immediate legal and business problems.”
The report was based on a survey of equipment manufacturers, suppliers, industry publications and advocacy groups, and outside financial, accounting and legal support across the automotive industry.
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