Nov. 12, 2025 | Toyota’s $10 billion U.S. investment; KPMG’s Lenny LaRocca

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The automotive US investment, Waymo, hits the highways, pulling further ahead of Tesla in the Robotexy race, and GM reportedly wants parts-makers to pull supply chains from China. Plus, KPMG's Lenny LaRoka joins the show to talk about ongoing turmoil in automotive supply chains and what's ahead for EV investments.

Let's run through all the news you need to know to keep up in the auto industry. Toyota is making another big bet on American manufacturing. The automaker says it will invest $10 billion in what it calls future mobility efforts across the US. Toyota hasn't said exactly where all the money will go.

Both America's CEO, Ted Ogawa, says the move strengthens Toyota's commitment to US workers, dealers, and communities.

This is tied to our build where we sell, by where we build philosophy.

That announcement comes as Toyota launch production at its first US battery plant in Liberty, North Carolina. The new facility will eventually include 14 production lines,

batteries for hybrids, plug-in hybrids, and a new three-row electric vehicle that's still under wraps.

Waymo is taking its Robotexies onto the highway. The alphabet-owned company says fully driverless freeway rides are starting this week in San Francisco, Phoenix, and Los Angeles.

The CEO, Dmitry Dolgov, says the move will make trips faster, and marks a major milestone for autonomy. It also strengthens Waymo's lead over Tesla in the race for Robotexie dominance, as Tesla continues testing its service with human safety drivers.

With the move, Waymo's Bay Area coverage expands to San Jose, including new airport service.

And General Motors is asking thousands of its suppliers to cut China out of their supply chains, that's according to a Reuters report citing people familiar with the matter.

The automaker has told parts makers to start finding alternatives for Chinese-made parts and materials, with some facing a 2027 deadline.

GM says the move is part of a broader push for supply chain resiliency that says US automakers grow increasingly frustrated with trade volatility and political risk tied to China.

A GM spokesperson declined a comment on the company's discussions with its supply base. CEO Mary Barra has said the company is trying to move more of GM supply chain to the US.

And those are today's headlines, you can find more details on all of those stories at autonews.com.

Speaking of US automakers rethinking their ties to China, there's another piece of the story that's just as critical, the minerals that make modern vehicles possible.

Reporter Molly Boygon has been digging into America's deep dependence on China for rare earth elements, and how that happened in the first place.

She joins me now from her home office in New York City to explain why rebuilding the supply chain here at home could take decades, and why the US may never fully catch up.

Molly, welcome back to Daily Drive.

Thanks for having me, Jake.

So you have a pretty comprehensive couple of stories here about the United States dependence on China for rare earth minerals.

You know, we've talked a lot on the show about that dependency, and we've actually seen some of the effects this year of that dependency.

But what a lot of listeners might not know is that we actually had a supply chain of rare earths here in the United States in the past. What happened?

There were a few factors that that's really just coincided as the perfect storm to negatively impact the US's domestic supply chain for rare earths.

So the US had ample rare earths at a mine in Mountain Pass, California, which was discovered in the late 40s, and for decades had not only the material, but processing capacity and the ability to produce the products that rare earths go into.

So for example, General Motors and a Japanese company both actually by coincidence independently, but at the same time developed the first rare earth magnets that they both announced at a conference in 1983.

So the US really was at the cutting edge, not only of the mining and processing, but of the production of rare earth magnets.

Then in the 80s, the US basically changed the way that it classified a material called thorium, which occurs naturally in rare earths.

It's kind of like a contaminant, and the government classified this as something that could go into fissile material that could go into material that would be made to make a nuclear bomb.

So that created all of these new requirements for waste handling and other requirements that made it really difficult to continue the manufacturer of rare earths in this country.

Around the same time, China developed its own rare earths capacity, and this was around the time that the Chinese government was looking at the economy, looking at the country's lack of domestic fossil fuels and saying, okay, we better invest in heavy industry, we better invest in renewables with just incredible foresight bordering on prophecy, I would say.

And they then developed this supply chain over the course of decades, just as the US was kind of declining.

And China also had a price edge, which was enabled by lower labor costs and less environmental regulation.

And so US companies began processing their material in China and using Chinese companies, and little by little just the domestic industry was just decimated.

So it sounds like the US has the capability, at least based on what we've done in the past and some supply at the very least, how likely is it that the US could eventually catch up with China if it tried?

So you're right that the US does have rare earths geologically, the challenge is in processing.

The Chinese government has just created a very well vertically integrated supply chain.

So for example, some rare earths are harvested from the process of producing iron ore, so it's almost like they already have the kind of feed stock to be able to produce rare earths and process them easily while producing iron at the same time.

For something like that for the US, I asked analysts this question and it's sort of hard to estimate because in addition to already having the vertical supply chain, China, because of its volume and because of the dominance it's built over the years, also has a cost edge.

So I mean, long story short, I think it would be really hard and would kind of take the government firing on all cylinders for decades like the Chinese government did in the 80s to begin to compete in any meaningful way with the Chinese government.

The one caveat that I will say is it's possible that the US will develop a rare earth supply chain as kind of an insurance policy.

So in the event that something like rare earth export controls are implemented again, the US will not be completely without supply.

But in terms of competing on the global stage, it's unlikely that the US will match China in the near future and I would say even probably in the medium term future too.

It's a fascinating and really important topic for the automotive industry here in the US.

And we'll hear more about this story tomorrow on Thursday's show.

Molly, you spoke with Colin Hendrix of the Peterson Institute for International Economics.

And again, that's coming up on Thursday's episode of Daily Drive, so make sure to tune in for that.

Molly's story is titled China Dominates Rare Earths. The US may never catch up.

You can check that out on autonews.com. Molly, thanks so much for joining us today.

Thanks, Jake.

Coming up, KPMG's Lenny Laroka joins the show to talk about the state of automotive supply chains and EV investments as we near the end of 2025.

That's next on Daily Drive.

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Welcome back to Daily Drive. I'm Jake Eier.

It's been a year defined by volatility for the global automotive industry, from shifting trade policies and tariff uncertainty to slower EV adoption and rising competition from China.

To help make sense of it all and to look ahead to what 2026 might bring, our own John Irwin caught up with KPMG's US automotive industry leader Lenny LaRocca.

Welcome back to Daily Drive. Thanks John. Happy to be here. Absolutely.

There's no shortage of things that we can talk about right now, but it's hard to believe we're already toward the end of 2025.

It's been a very eventful year for the auto industry between ups and downs with changes in trade policy, electrification, changes to automakers, EV plans, etc.

As we look back at this year, I was hoping to take stock with you where we're at right now. What's your sense of how the market and the auto industry in general has been holding up a global scale, considering all of the changes that we've been seeing this year?

Absolutely. I think it could really define this year as a year of uncertainty.

Lots of volatility. I mean, you had a lot of volatility around tariffs, depending on what they have the week it was, different tariffs coming through, the EV slowdown, EV volumes sort of really coming down this year compared to what people were expecting.

And you had a significant impact of the Chinese OEMs on the global market. And so we really sort of view this year as a real year of uncertainty and compounding volatility.

And so if you take a step back and we think about what's going to happen for next year, I really would like to just maybe kind of go around the world and then land in the US.

And so in China, China market is still very strong. The China market is growing. There's impacts under the hood though in China. You don't necessarily see here from the US.

So the China market is significant over capacity. So they have capacity of about 50 million units and they produce around 30, right, just broadly speaking.

Chinese OEMs don't really make any money in China. So they're even despite all the subsidies that they get from local governments.

So when you take a step back, China is growing, but they're not really generating cash flow, right, they're not generating return. And so we've anticipated that there needs to be more consolidation in China, right.

There's 100 so brands, but consolidation by itself doesn't necessarily drive cost reductions, right. You would really need to sort of consolidate plans, get the capacity more in line with the utilization.

And so there's still work to be done in China to really make the Chinese market profitable. Right now there's significant price war in China.

But that being said, Chinese OEMs are super innovative. They've got great product, a very low cost product. And because they have to in their market and the hyper competition.

So I think you're going to continue to see Chinese OEMs look to exports and look to go abroad.

And so that kind of brings us to Europe, right. In Europe, the traditional OEMs sort of went all in on EVs, right.

So it was like, we're going to go straight to EVs. They built plants specifically dedicated to EVs and the EV volumes in Europe are where they thought they would be.

Right. It's moving much slower than anticipated. It's costing a lot more money. And so you're seeing the Chinese invest in Europe.

The Chinese OEMs are investing in Europe. And so I think at this point, Europe is I think going to take a step back and look at hybrids as a more medium term solution, right.

Instead of going directly to EV, I would anticipate that a lot of the investment dollars that we're going to go into EVs are now going to be diverted into hybrids, plug in hybrids and you know range extenders, right.

So I think that market is going to continue to fluctuate. I mean, unlikely going to grow by much there. But if they can't right size the portfolio and pivot to hybrids, you're going to see much more restructuring in Europe, right.

You've already seen some now and some plants getting closed. And I think that's going to be much much more in the near term if they can't pivot.

So maybe we should go to the US. What kind of questions you have on the US side?

Yeah, all sorts, but you know, considering, I mean, this year in the US obviously we're, you know, I've been covering for automotive news.

A lot of the trade policy changes that we've been seeing. And a lot of that idea behind it, at least, is to bring in manufacturing to the US.

But I've seen automotive companies in the US or in North America more broadly have viewed the market as North America.

It's not necessarily just US if you look, the supply chain is like a North American supply chain.

You know, given trade policies and everything else is that changing to any meaningful degree or how might that change moving forward?

You know, as we look ahead to the New Year and beyond, is that changing to any meaningful degree and how might that look if so?

Well, you're starting to see, I think you're starting to see the OEMs and suppliers really move.

So when the tariffs came out, it was sort of like, what's my immediate now term strategy, right?

Like, I've got to come up with ways of mitigating the cost, you know, maybe easy move you could make to mitigate the tariff impact.

So if you had excess capacity in a facility, you could maybe move some production there or maybe move some suppliers to the US that might help you save money.

So a lot of that work has already been done, right? That was, I would say, the first few months of, you know, a lot of the tariff implications, right?

And so now you're starting to see the OEMs and suppliers move into like, what's my medium and long term strategy?

Right? Like obviously it's not sustainable to continue to pay significant tariff costs. So what do I need to do to start to move, move my production, move my strategy to respond to these, to these actions?

So you've already seen certain, you know, companies make announcements, a further investment they're going to put in the US.

But what we're seeing from our side is that investments, you know, they're still cautious, right?

There's still a lot of analysis and, you know, a lot more things that go into a deciding to build production facility in the US than just cost, right?

So you think about, you know, we have to make sure we have the right labor, right?

Certain skill trades, you see it every day now, right?

Skill trade shortage, you know, whether it's welders or electricians, but think about like, you know, casting as an example, right?

It's in the area that, you know, there's a very highly skilled labor needed for that. A lot of cost needs to go into that.

We're seeing that move pretty slow as companies sort of assess what they build and what they move.

But like you mentioned, the supply chain is very integrated across North America, right?

So that process of assessing and move is, it's very complex, very complicated.

And no doubt, and, you know, speaking of sort of complicated decisions that, you know, companies have made, you know, obviously in recent years, you know, companies, you know, throughout the globe, even in the year of North America, you know, made significant investments into their electrification programs and investing,

assembly plants, suppliers, investing in their factories, you know, kind of with the thinking that EV sales will take off to a certain point in the coming years.

Obviously, you know, those sales numbers, a lot of projections haven't necessarily gotten to that level.

And then now, you know, this year, of course, back in September, we saw the federal EV incentive being faced out.

What does, you know, we talked about hybrids in Europe.

What does, you know, the future of, you know, those types of, you know, investments, I mean, automakers and suppliers have already poured in a lot of capital into those facilities that are pivoting now.

And what might that look like moving forward as, you know, companies try to figure out what their footprints should look like and what their product plans should look like?

Yeah, that's right. I mean, the EV, I would say the slow adoption of EV is a huge impact on the auto industry in North America, right?

And like you said, it was most investment ever made, something like 300 billion, I mean, people were making significant amounts of investment into into EV's production capacity in North America in the last, you know, a couple of years, right?

And that ripple down effect in from the OEM to the supplier. And so with that uncertainty of where EV volumes were going to go, you know, it was already sort of disrupting the supply chain, right?

We already saw many suppliers, you know, who had invested heavily in EV's, but weren't getting the volumes just recently, you've seen more around potential cancellation of EV programs.

And so going forward, I anticipate that you're going to start seeing, you know, write offs of assets, right?

Because with that amount of investment and the volume not being there, I could anticipate that in the next year, you'll start seeing, you know, different write offs, you'll start seeing companies, maybe not be able to survive completely on their own.

So they would need to, you know, generate maybe maybe it's a consolidation target, maybe it's a M&A activity or further cost reductions.

And so I think that disruption is going to continue for the next 12 to 18 months.

Yeah, on that note, you know, M&A, that's something that, you know, I've been hearing, especially in the supply side of things as a potential way to, especially as costs set up and as, you know, companies look to be nimble to either, you know, look at, you know, spinning off, you know, part of their business, we're seeing some suppliers do that, or mergers, acquisitions, or we're seeing companies even look pursue partnerships, maybe more than they might have in the past.

You said, you know, we can expect to see more of that over the next 12 to 18 months, you know, how might that kind of change how, you know, the supply chains even look in North America, I mean, you know, they have essentially companies partnering or merging that right now, we're competitors.

I mean, what are the ramifications of that long term?

Yeah, yeah, well, that's actually my favorite topic.

So I love, you know, M&A, I think it's very, you know, it's been needed in the supply chain. It's needed at the OEM level. I mean, the industry has actually gotten much more fragmented over the last 10 years.

If you look at the introduction of, you know, EVs and new players at the OEM level that then ripples down to new suppliers. So the industry has actually gotten much more fragmented.

And I do believe that the industry is in need of consolidation in many areas, right? It's just deals in auto are very difficult.

You have, you know, direct competitors, you know, buying out a direct competitor is not an easy transaction.

There's a lot of rules to follow. There's a lot of things to follow, but there's also like, you know, it's just not easy deal to get done because you're dealing with two competitors.

Now, that being said, I mean, I think there will need to be more consolidation. And the buyers will have to get comfortable around the, I mean, fundamentally auto industry boils down to, you know, platform mix, right?

Platform mix, program mix. So are you on the right platforms? Are you on the right programs? Are those programs profitable?

And, you know, that's where the sort of rubber hits the road and doing deals in auto, right? Like, you really need to get down to that level of detail. You need to understand what, what they're, what the forecast looks like, what platforms are on.

And that's how it makes sense, right? Because in some cases, if you're a competitor, you look at your, you know, why would I buy that business if they're on all the wrong platforms, right? And so that's what makes deals really difficult in auto.

Yeah, it's going to be interesting to see how that plays out moving forward. Really over the past several years, I mean, we go back to COVID, you know, through, you know, semiconductor shortage and all the supply chain shocks inflation.

You know, I've been hearing a lot from companies about how they, you know, like to say that they feel like they're more nimble now than maybe they were, you know, before COVID or several years ago.

Generally speaking, do you feel like the industry is at that point, does that have a long way to go to kind of be able to be as nimble as it wants to be or, I guess, how would you assess kind of where the industry is at when it comes to, I guess, resilience, yeah, shocks the supply chain on recent years.

Yeah, absolutely. I actually think that better, that words better resilience versus nimble. I mean, the industry is not known for being nimble. It does take time, but it is resilient.

And, you know, when COVID hit, for example, we thought there were going to be a ton of bankruptcies like 0809 kind of level, right, and you saw very few when, you know, the EV slowdown or the EV, you know, slow adoption of EVs was happening.

We thought there would be much more impact, right. You know, tariffs as an example, right, when tariffs hit, you know, it was going to destroy the industry still plugging along and people are still generating cash.

And so I think they just take the hits, the industry takes the hits and, you know, adapts and moves and is able to find a way to get through it.

I mean, the real question is, how long can they withstand the compounding volatility, right, as things happen, right, you see more and more, you know, things, what could be next that's going to take a hit.

And, and I think that sort of playbook that the OEMs and suppliers, you know, has been very well vetted over the years, just continues, continues to the, the option, the question is, is that going to be enough as you get into as you continue to see these volatility.

Yeah, that'll be the question. And, you know, as we monitor it, we'll, we'll stay in touch.

Yeah, yeah, it's going to be interesting.

Money, LaRocca, US Automotive Industry Leader at KPMG. Thank you for joining Daily Drive.

Yeah, thank you. I really appreciate it.

That's Daily Drive for today. I'm Jake Near in for Helen Walker.

Thanks to Automotive News Journalists, Omar Gardner, Hans Grimell, Lauren Seiliff, and Molly Boygonne for their reporting for today's podcast.

You can get the latest news on supply chains, US manufacturing investments, and everything happening in the auto industry at autonews.com.

Come back tomorrow for a conversation with Colin Hendrix, senior fellow at the Peterson Institute for International Economics,

who talks more about the US dependence on China for rare earth minerals.

The real problem is going to be finding municipalities in the United States that are willing to onboard what is an incredibly energy intensive,

water intensive, and not particularly lucrative or high margin, kind of process.

We'd love to hear from you. Let us know what you think of the show and the topics we covered today.

Send us an email at DailyDrive at autonews.com, or leave us a voicemail at 313-444-2774.

And if you enjoy the podcast, remember to like, leave a review, and subscribe so you never miss an episode.

Nov. 12, 2025 | Toyota’s $10 billion U.S. investment; KPMG’s Lenny LaRocca

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