Why NADA Is Backing the Connected Vehicle Security Act

As debate over Chinese-connected vehicles intensifies in Washington, franchise dealers are closely watching legislation that could reshape the future of the U.S. automotive market. In this episode, Mike Stanton, President and CEO of the National Automobile Dealers Association (NADA), discusses the advancement of the Connected Vehicle Security Act of 2026 and what it means for dealers, automakers, and consumers.

Stanton explains why NADA supports the bill, how concerns over connected vehicle technology extend beyond competition, and why the association views the legislation as an opportunity to create a more level playing field rather than a permanent barrier to Chinese automakers. He also shares updates on NADA's broader advocacy efforts, including direct sales, FTC advertising guidance, and the REPAIR Act.

Key discussion points:

• What the Connected Vehicle Security Act of 2026 would do
• Why NADA supports restrictions on Chinese-linked vehicles and technology
• How dealers view future competition from Chinese automakers
• NADA's ongoing work on direct sales, FTC compliance, and the REPAIR Act
• Why the legislation still faces key hurdles before becoming law
• What dealers should expect as the bill moves through Congress

Stanton offers an inside look at one of the industry's most significant policy debates and the issues shaping dealership advocacy in 2026.

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Transcript

Welcome And Bill Breakthrough

Jim Fitzpatrick 0:06

Welcome to Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick. Thanks so much for joining us this morning. I've got Mr. Mike Stanton with us, the president and CEO of the NADA, National Auto Dealers Association, with us this morning. Mike, thank you so much for taking the time out of your schedule to join us on the show.

Mike Stanton 0:26

Jim, my pleasure. Always great to be with you. Great.

Jim Fitzpatrick 0:29

Thanks for having us. First, congratulations on it looks like the uh the Chinese bill, so to speak, uh, is moving through. And uh so talk to us about that. What what stage are we at with this? It looks like the the committee approved it and um uh and and it could go to the next next level now to the Senate.

Mike Stanton 0:46

Well, two words you rarely hear here in Washington, and that's bipartisan support and unanimous support. Yeah. So yeah, a victory, an important victory step toward making sure that the Chinese stay out of our market, at least in the near term here. You know, Jim, we've talked about this over the many months. I think it's gosh, it's been three years plus that NADA has been engaged trying to get smart on the industry from a global perspective. We've been to China, we've been to many countries across the globe talking to dealers that represent uh Chinese brands. And Jim, we don't like what we see, not just from our perspective, but from our consumers and for this country in terms of national security, for our OEMs and their franchise dealers to compete with the Chinese government is something that is just not gonna work here. And so I mentioned, you know, bipartisan, yeah, unanimous. We have alignment. I mean, the car companies agree on this, and dealers who will sell anything to anybody, as you know, we have worked with our board. Yeah, we're aligned on the administration's policies, we're we're aligned with this bill, and then I visit and support many state and metro dealer associations, and we're getting a lot of head nodding in those meetings as well. So, as an industry, as a country, as a Congress, so far, we are together on the concept that it's best for all involved. Most importantly, our our country to keep the Chinese OEMs out of this country at this point in time.

Jim Fitzpatrick 2:26

Yeah. I should mention that uh Senator Bernie Moreno was one of the co-author of this uh bill along with uh Senator Slotkin from Michigan. Um they did a great job on it, and and you're right. It's not often that we hear in DC that something is passed on a bipartisan basis. And uh so let me ask you this what's what's next now? Where does this go from here?

Mike Stanton 2:49

Yeah, so it's just it it passes out of committee. And uh did you have a chance to watch the actual back and forth? Yes. Uh it it was I thought it was fascinating. Yeah, it was great. Yeah, yeah.

Jim Fitzpatrick 2:58

Senator Marino did a great job.

Mike Stanton 3:00

Yeah, he he it's not ready to go forward. Yeah, it did pass unanimously, but there is still a lot of work to be done. Senator Cruz mentioned Mercedes-Benz, particularly. There are other uh manufacturers involved, and of course that the manufacturers are involved, the dealers are involved, NADA, you know, we represent all franchise dealers. So we're gonna continue to work uh as we do, it's our day job. We're gonna continue to work to make sure that we get this right uh for the members that that we represent. But generally speaking, we're very supportive of the bill, and that there's just a lot of work to be done. It's got to go before the whole Senate, it's gotta go over to the House. So there's a lot of things that that need to happen between now and then. And we're in dialogue up on the hill, but we're also talking with our car company partners and the Alliance for Auto Innovation as well. Again, we're all on the same page in terms of the Chinese threat, uh, but in what the final, final language looks like, there's still some work to be done, and that's what

Product Quality And Fair Competition

Mike Stanton 4:00

we'll be doing.

Jim Fitzpatrick 4:00

Sure, sure. Um, as you know, the chairman of Ford, Bill Ford, came out in a couple of uh days ago, or maybe a week ago now, and said that you know it's inevitable that Chinese vehicles will be here, so therefore we really got to ramp up and and build a better product here in the U.S. What's your take on his comments?

Mike Stanton 4:18

Well, we as I mentioned, I've been to China, I've I've seen the product, I've driven the product, experienced it. It is good. You know how it holds up over the long term uh in terms of quality, yeah, uh no one knows yet. Time will tell. But the product is good, the pricing is good. Dealers that I talk to, and I talk to a lot of dealers, they want to sell, of course, it's just human nature, they want to sell the best product on the planet. Right. And we need to make sure that we've got a fair fight going on. We also need to make sure that we create an environment where our manufacturers are producing the best vehicles in the world because that's what we want to sell. And if that involves the Chinese down the road, yeah, under the right terms, my primary t term would be that they use the franchise system. Sure. Well, we'll see how that develops. Sure. But for right now, I I really think we're in a good spot in terms of consensus on where we should be.

Jim Fitzpatrick 5:12

Yeah. Do you think that this the the pressure has been put upon the automakers already, even though they're they're not in the U.S. And it looks like maybe they won't be for a long time if this gets passed um through the House and the Senate. But do you think, I mean, you've got Ford now that's you know talking about uh designing and coming out with a $30,000 uh EV uh pickup truck that uh it would be very affordable, very very welcomed, you know, among consumers and dealers for that matter. Um do you think that that's what's driving some of that innovation?

Mike Stanton 5:44

I do. I think pressure drives a lot of things. It drives innovation, it it drives motivation. I mean, that pressure is not a bad thing. It uh the status quo is is never good enough. Nobody's standing still. Right. And and I do think from from that perspective, you know, absolutely. It's you look at the map, the map of the world. I know. Uh I I had just heard that in Mexico, the Chinese brand, 17%. They're gonna let them in in Canada now. So if you look at the map of the world, we are the only country that that is keeping the Chinese vehicles out. And to me, that is for a period of time. I don't know what that period of time is, but it gives our manufacturers some breathing room to catch up, do what they need to do to make sure that we are the best. That's that's what we all want.

Jim Fitzpatrick 6:31

Sure.

Franchise Dealers And National Security

Jim Fitzpatrick 6:32

Um the many of the dealers I've spoken to on this topic have raised their hand and said I I would I or I should say they would raise their hand if in the event the day comes that that the uh Chinese are either building cars here or shipping cars here to be a franchise dealer. I know that you've said in some comments that yeah, if that day comes, then you support the franchise dealer, whether they're selling a Chevy or a Chinese vehicle, right?

Mike Stanton 6:56

That's that's right.

Jim Fitzpatrick 6:57

Yeah.

Mike Stanton 6:57

You know, and dealers are gonna do what's best for them when the opportunity presents itself in a fair way. But you know, you've traveled to the NADA show, you've traveled to state metro dealer associations, yeah. While they compete every day. Yeah, every day of the year dealers are competing. There's also a concept of what's best for the greater good of this industry. And thankfully, that's where we are right now in terms of keeping the Chinese out. What's best for our industry, not just our wallets, right? This is this is a matter of industry, consumer privacy, and national security and manufacturing here in the United States.

Jim Fitzpatrick 7:40

Yes, Senorina brought up a lot of points of the market.

Mike Stanton 7:43

What we sell here, and other factories have made commitments. So what the Trump administration has asked of our car companies, they're doing. And these things don't happen overnight. It takes time, but that's going to set us up well from a national security uh perspective. So again, the dealer ability, and I've seen it time and time again, compete every day, uh, but then work for the greater good is uh is something that this is a great example of.

Jim Fitzpatrick 8:10

Sure, sure. Um

NADA Priorities For 2026 And Beyond

Jim Fitzpatrick 8:11

while I got you here, and we'll change gears for just a second. Um you guys just had your ATAE conference, uh, heard great things from a number of your colleagues. Um can you give us uh kind of an update on what's on the agenda for the balance of 2026 and maybe 2027?

Mike Stanton 8:28

Yeah, that meeting is a fantastic time for us to get together and not just talk about the issues of the day, but to really, you know, cement or form new relationships with new members. Because a big part of our job as as association leaders is to make sure we're all on the same page, that we're aligned, we're moving together. So meetings like this are super you know, super valuable, and something I look forward to to going to you know every year. We've talked about a lot of the things that you know are on our agenda. Of course, the direct sales threats. We we feel like we're we're in a very good position, Washington State, state of California, Florida, we're working in Colorado to support all of those challenges. So I would put that at the top of the list, and then the the second, second would be right right next to it, would be the the issue we're talking about today, which we we had good momentum on, which is the the Chinese OEM threat. And then certainly right to repair. That's something that uh, you know, the Repair Act, this is something that we've continued to fight. Yeah uh we've made good momentum there. This is not about consumers being able to fix their own vehicles or a competitive marketplace for consumers. Yeah, this is about an intellectual property grab. Yeah, you know, this is about big box parts, insurance companies. We feel good, we're on a good path with right to repair, you know, and there's there's just always something out there. You you name it. Oh, yeah. Even dealers are concerned with with Carvana, with with the fact that they're a new dealer now, what's what what's that gonna look like down the road? So never a dull day at NADA. There's always something going on. Absolutely. It's part of what makes my job, you know, my job so interesting.

Sales Outlook And Affordability Pressures

Jim Fitzpatrick 10:06

Sure. As we uh now we're in the second half of 2026, from your perspective with all that we see out there um, you know, that uh in the world and in the country, uh gas prices, interest rates, uh affordability that we hear so much about. The president loves to say the affordability. But um but what what is your take on this on the second half of this year? What you think we'll finish strong, or you think there might be some further headwinds?

Mike Stanton 10:31

Well, I I don't know. It could be both. And it could just go with the bigger one.

Jim Fitzpatrick 10:35

You know it's gonna be one or the other.

Mike Stanton 10:36

I mean, gosh, you know, Jim, I talked to a dealer, uh, two dealers today. One is absolutely on fire. She told me she may set it set a record, all-time record for her stores this month. There you go. The other one says he's in a market where he they're just killing each other.

Jim Fitzpatrick 10:50

Yeah.

Mike Stanton 10:51

Uh and and then they're not doing doing as well. The traffic is is not there. So I mean, that's a survey of today of two.

Jim Fitzpatrick 10:58

Sure.

Mike Stanton 10:58

Uh, I think our chief economist, Patrick Monzi, still thinks we're gonna we're gonna finish strong 16 plus.

Jim Fitzpatrick 11:04

Okay.

Mike Stanton 11:04

You know, anytime you can be in that neighborhood of 16, 16 plus, yeah, we're we're in good shape. Most dealers describe the situation as good. And with dealers, it can always be better. Right, right. But uh, you know, I I I think the general consensus are things are are going pretty well.

Jim Fitzpatrick 11:21

That's good.

FTC Compliance And Ad Transparency

Jim Fitzpatrick 11:22

That's good. Um, last thing in that, just to touch uh or an update on the FTC. Uh as you know, we had our conference last month in DC there. Um got you know just uh 150 people in the room in a very short period of time, but uh of course some great representatives uh that uh that spoke uh there from NADA on this very important topic. Anything to report on that?

Mike Stanton 11:45

Just that we've got good momentum. Dealers are paying attention. You know, I the vendors are seeing more business in the compliance area. NADA continues to engage with the FTC. We're looking to put out some advertising guidelines in in the short, short term here. Uh, we're gonna get a full FAQ back from the FTC, hopefully uh sooner rather than later, but it could be later this year. But we're engaged. Yeah and part of it is uh our job is to educate uh the FTC because there's some, you know, our business is just not dealers selling cars. You got tier one, tier two, tier three OEM programs, you've got third-party listing sites, and we're working with all, and and I've I've seen good progress from everybody. This is not about just an individual dealer fixing a policy. No. I mean, gosh, I was on with Cox Automotive yesterday, and it you dealer prices a car and it goes so many different ways. There's just a lot of a lot of plumbing and a lot of IT work to make sure that even if the dealer wants to comply, that they can do so. So we're working working through all of that. And as you and I have talked, and I and I think the general consensus is this will be a good thing once once we work out the uh you know the bumps here, this will be a good thing for for our image and for our relationship with customers. Yeah. And just remember, too, dealers sold 96.2 percent of the car franchise uh dealers sold 96.2 percent of the cars in the United States last year. Right. Okay, you want to sell them all.

Jim Fitzpatrick 13:16

Yeah.

Mike Stanton 13:16

But uh but part of part of that is not about just defeating the direct sellers, it's about getting better every day. And and we're doing just that. And obviously, we do that here at NADA through our 20 group program, Academy, and the other training offering.

Jim Fitzpatrick 13:30

And and and to kind of echo what you were just saying, I hear most of the dealers I talk to, in fact, by far the majority, uh have you know said this is a in the long run, this is a good thing that the FTC has stepped in to level the playing field and so that we're not a dog eat dog, you know, situation with all of our you know, fellow dealers out there and that everybody's working off the same sheet of music with regard to you know uh transparency in their pricing. So it it had to happen. We've kind of did it to ourselves in the industry, and now it's time to sit up and fly right, you know?

Mike Stanton 14:04

Yeah, you know, the the easy kind of analogy is nobody minds standing in line until somebody butts. Right. And and if if there's enforcement actions about the people that are jumping the line, and I and the FTC has told us that there there will be more coming this year, then I think that's that that will be more motivation to uh you know to to do the do it the right way.

Jim Fitzpatrick 14:27

Yeah.

Mike Stanton 14:27

I mean, how can we be anything but for transparent pricing?

Jim Fitzpatrick 14:32

Right. You know? Right, right. Yeah. The time has come. There's no question about it. And I think the OEMs, you know, the OEMs have got to be in there with the dealers on this. I continue to see ads in our market here in Atlanta where I'm thinking, well, you just came out with a number and prices, and I don't see anything about a dealer fee, doc fee, nothing else. How are they going to acquire that car from a dealership? Uh, the dealer would have put the doc fee in the ad, you know, in the advertised price. But uh, but the OEM doesn't have to, or what what does that look like? So I think there, to your point, there's a lot, a lot more uh questions that have to be answered on this topic, right?

Mike Stanton 15:06

Well, yeah, I should invite you to our meetings with the FTC. Yeah, I could imagine. But I like you too, I like you too much to do that to you, Jim.

Jim Fitzpatrick 15:13

I'll leave that to the to the professionals at the NADA. So but thank you for the invite. So,

When Dealers May Need To Rally

Jim Fitzpatrick 15:20

Mike Stanton, thank you so much for taking the time on your busy schedule to join us here at CBT News to give us the update on all the things that are happening. Congratulations to you and your team uh helping uh Senator Marino and Slotkin uh you know get get this to the first uh to the first stage here. And uh, you know, it now it's the question as to, you know, how long a period of time does something like this take before uh you know, assuming everything works out that the that the bill gets signed by the president?

Mike Stanton 15:47

I I I don't know. Yeah because I asked the senator that question yesterday and he said he would get back to me.

Jim Fitzpatrick 15:53

Get back to you, okay.

Mike Stanton 15:54

We're we'll we'll figure it out. I would just ask your listeners to you know keep keep an ear to or keep an eye on on the email, listen to uh or or read what your state ATAEs are sending out, what the NADA is sending out, because there will be a time to activate, and I don't know if that's in a week or two weeks or two months yet. Right. But when when it's time to rally, yeah, nobody's better at it than the dealers. We'll get them moving all with one kind of message, one voice, sure, and hopefully we'll get this done. I'm confident that we will.

Jim Fitzpatrick 16:28

Yeah, I am too. I am too. Thanks so much, Mike. Really appreciate it. Have a great weekend.

Mike Stanton 16:32

You too, Jim. Thank you. Thanks.