Barclays has downgraded its outlook on the U.S. automotive and mobility sector from neutral to negative, citing concerns over President Donald Trump's tariff policies. These tariffs could pressure automakers' earnings and hinder investment. This sentiment aligns with Goldman Sachs' recent forecast, which reduced U.S. car sales expectations by nearly one million units for the year.
Despite a temporary pause on tariffs for most imports, levies on cars, steel, and aluminum remain unchanged. Barclays analyst Dan Levy noted that the challenging environment complicates short-term investment planning for the auto industry. The persistent car tariffs and their underestimated risks in valuations are troubling.
Barclays downgraded General Motors (GM, Financial) from overweight to neutral, highlighting that nearly half of its U.S. sales are from vehicles assembled abroad, including its economical electric cars produced in Mexico. The firm slightly favors Ford, as a higher percentage of its vehicles are assembled in the U.S.
Additionally, Barclays lowered ratings for automotive technology companies Aptiv, Mobileye Global, and Visteon. Concerns over pricing may lead automakers to delay further tech investments.
