Nokia Drive 3.1 - How does the automatic switching between day and night mode work in Nokia Drive? Does it use a light sensor or is it based on the time of day?

It's based on the time of day. Night mode switches on around the time the sun sets at your location, and day mode switches on around sunrise.

Also, night mode is automatically switched on, if Nokia Drive notices that you drive into a location where it probably is dark, for example, a tunnel.

If you want to disable the automatic mode switching, you can force the map to be in day or night mode by changing the map mode in Settings > Map colours