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Good morning! It is Monday, July 20, 2026, and welcome to The Morning Shift, your daily summary of leading automotive stories from across the globe gathered in one spot. Here you will discover the key developments influencing how Americans travel and commute each day.

Today's edition highlights that electric vehicle registrations declined modestly yet the drop proved smaller than recent trends, offering encouragement for the category. Canadian Ford employees also endorsed a fresh three-year labor agreement, Honda explores building another facility across North America and the Blue Oval announced three recalls covering more than 620,000 units.

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1st Gear: EV registrations decline modestly year-over-year

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Typically a year-over-year sales drop signals trouble, yet sometimes prior figures were so weak that even a small reduction counts as progress. That situation applies to fresh electric vehicle registrations, which posted a partial rebound in May after an extended slowdown triggered by the end of the federal tax credit under President Trump. Shoppers have gradually reentered the EV space as manufacturers roll out more discounts.

May 2026 EV registrations fell just 0.7 percent compared with May 2025, reaching 98,684 units. This represents the smallest drop in eight months, per Mobility Global figures. Tesla drove much of the improvement with a 55.2 percent segment share, reflecting a 12 percent rise from the prior year. Other brands also performed well. From Automotive News:

Hyundai's May registrations climbed 27 percent to 6,027, securing second place. Toyota recorded a 234 percent surge to 3,867 vehicles, taking sixth among EV brands, the data indicated.
Battery-electric models held 7 percent of the light-vehicle market in May, down 0.1 percentage point from a year earlier. Hybrids are excluded from the data.
In the first five months, EV share of the light-vehicle market slipped to 5.9 percent from 7.3 percent a year earlier while registration volume fell 23 percent to 392,136 units, the data showed.
Mobility Global projects 2026 EV share at 6.8 percent, below 2025's 7.8 percent and 2024's 8 percent. Libby anticipates only gradual growth in EV share into the early 2030s.
Analysts had anticipated stabilization this year after sharp swings in late 2025 when buyers rushed for the tax credit then demand plunged.
Recovery has advanced slowly. EV registrations dropped 41 percent in January, 37 percent in February, 25 percent in March and 9.8 percent in April versus prior-year months, Mobility Global reported.
Average incentives for new EVs in May stayed near prior-year levels at $7,611 per vehicle while average transaction price declined 4 percent to $54,532, Cox noted. Incentives equaled 14 percent of average EV price in May.

The leading five brands by May EV registrations were Tesla at 54,448 units (up 27 percent), Hyundai at 6,027 units (up 27 percent), Rivian at 4,686 units (up 21 percent), Chevrolet at 4,462 units (down 47 percent) and Cadillac at 4,037 units (up 3 percent).

2nd Gear: Unifor members finalize Ford labor agreement

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5,150 Unifor-represented Canadian autoworkers ratified a new three-year Ford contract with 74 percent approval. The deal runs through September 19, 2029 and delivers a 3 percent annual wage increase, stronger job protections and higher pensions along with additional perks.

Ford CEO Jim Farley stated the pact invests in employees and Canada's future. Ford will commit $500 million to its Windsor Operations and Essex Engine Plant, which produce F-Series engines. Another $400 million will support retooling at Oakville Assembly to add stamping capacity as Super Duty production begins there in the third quarter and continues through the contract term. From the Detroit Free Press:

"With this agreement and our continued investments in Oakville, Windsor and Essex, we are building on more than a century of manufacturing leadership in Canada and strengthening Ford's ability to compete and win for years to come," Farley said. "A strong, integrated North American manufacturing system is essential to our competitiveness, and a revised USMCA is critical to fending off the cost and currency advantages enjoyed by imported vehicles from Korea and Japan."
Base wages for production employees will exceed $50 per hour over the contract life. Skilled trades wages will exceed $62 per hour. Union leaders view the investment commitments as the primary achievement.
Job security terms include renewal of a no-closure pledge and program commitments at all Ford sites, plus a planned third shift at Essex Engine plant starting in 2029.
The union entered talks expecting smaller wage gains than the 2023 record due to economic conditions. Members sought steady wage and pension progress, product commitments for job security and no concessions.
In the United States, the UAW contract with Detroit automakers expires May 1, 2028, yet the union and officials are monitoring Unifor outcomes closely.
Ahead of talks, as the Detroit Free Press noted last month, Payne described the negotiations as "the most consequential" of Unifor leaders' lifetimes because of industry pressures including the unchanged USMCA, unresolved U.S. conflict in Iran and 25 percent tariffs imposed by President Donald Trump on imported vehicles and parts.

I would like to extend warm wishes to fellow workers everywhere for a very happy "Solidarity Forever."

3rd Gear: Honda evaluates additional North American plant

Honda

CEO Toshihiro Mibe indicated Honda is considering an eighth assembly facility in North America. North America remains Honda's largest and most profitable region, representing roughly 40 percent of global sales last year, while existing plants in the U.S., Mexico and Canada operate at full capacity.

An extra plant would provide supply-chain flexibility and support sales growth, particularly for models such as the CR-V. From Automotive News:

"It's almost in full production," Mibe told Japan's Yomiuri Shimbun. "If you don't have a buffer, you can't recover production."
"I want to increase the number of sales in North America a lot," Mibe said in the interview published July 18. "The basic idea is to produce in a place where there is demand."
In the U.S., American Honda targets more than 9 percent market share in 2026 and expects to exceed industry growth.
Honda's U.S. plants in Ohio, Indiana and Alabama run at 85 percent of 1.2 million total capacity, according to GlobalData. Overall North America utilization stands near 90 percent of 1.8 million units.
A Honda spokesperson noted the company is "continually evaluating" production needs.
"The possibility of a capacity increase is always a consideration for the future growth of our automobile business in North America," the spokesperson said. "However, no decisions have been made regarding a new U.S. plant."

This review follows Honda's indefinite pause of a $15 billion electric vehicle and battery hub in Ontario several months ago as part of a broader shift toward hybrids over EVs. The company recorded roughly $15.8 billion in write-offs, its first annual loss in nearly 70 years, and the situation nearly ended Mibe's tenure.

4th Gear: Ford recall total nears 13 million

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July has brought additional Ford recalls. The company issued three separate actions covering 621,540 vehicles. The first concerns roof rail covers detaching on 288,314 2016-2019 Explorers, the second addresses a trailer brake light concern on 315 integrated trailer kits and the third involves 387,911 2020-2027 Aviators and 2020-2026 Explorers where second-row seats may shift unexpectedly. The National Highway Traffic Safety Administration describes each as follows:

Roof Rail Covers May Detach:

Summary:
Ford Motor Company (Ford) is recalling certain 2016-2019 Explorer vehicles. The roof rail covers may come loose and detach from the vehicle.
Remedy:
Dealers will inspect the roof rail covers and as necessary, repair or replace the push-pins, rail clips, or roof rail covers, free of charge. Interim letters, notifying owners of the safety risk, are expected to be mailed August 24, 2026. Additional letters will be sent once the remedy is available, anticipated in September 2026. Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 26S54. This recall expands previous NHTSA recall number 21V316. Vehicle Identification Numbers (VINs) involved in this recall became searchable on NHTSA.gov on July 16, 2026.

Trailer Brakes and Lighting May Be Lost

Summary:
Ford Motor Company (Ford) is recalling certain ITRM accessory kits with part number RL3Z-19H322-AA, ML3Z-19H322-AA, AB, BA, BB, CA, and CB that were sold as aftermarket accessory kits for Ford 2021-2026 F-150 vehicles. The integrated trailer module (ITRM) may lose communication with the vehicle, causing a loss of brake function, turn signals and brake lights. As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard number 108, "Lamps, Reflective Devices, and Associated Equipment."
Remedy:
Dealers will update the ITRM software, free of charge. Owner notification letters are expected to be mailed August 3, 2026. Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 26C35.