The West EV market faces “demand headwinds, policy uncertainty, and rising costs” leaving only OEMs with “flexible architectures, cost discipline, and regulatory agility will be better positioned,” Bernstein analyst Daniel Roeska said on Friday.
In a new research note, the analyst said China’s EV market is “pushing ahead with scale and innovation” bifurcating the global EV industry and causing “distinct implications for OEMs, suppliers, energy players, and investors.”
“What follows is a capital intensive, politically volatile, and operationally complex expansion into the mainstream,” Roeska wrote.
Last week, Donald Trump’s bill proposing to cut EV tax credits was approved by the U.S. House of Representatives, moving to the Senate.
On Thursday, U.S. EV maker Tesla urged the chamber for a “sensible wind down” on clean energy tax cuts, as they could “threaten America’s energy independence.”
Bernstein considered the Jeep maker Stellantis to be the “best positioned in the EV-slowdown” due to its “new multi technology platform,” as the brand produces various types of powertrains.
Roeska also noted that the group benefits from the “exposure to a faster growing EV market in Europe,” which places Stellantis better “than Detroit peers.”
According to the analyst, General Motors has been “cautious” by “reducing planned investments in battery manufacturing.”
Despite “slower EV volume growth and delayed EV profitability, GM is also avoiding knee-jerk reactions and taking a longer-term view,” he said.
Roeska stated that Ford has been “prudent” by “delaying and canceling EV growth” as it continues to work on its Model e unit.
The U.S. company reported a sharp drop in first-quarter earnings.
Ford‘s EV unit reported a first-quarter EBIT loss of $849 million. In the new note, Roeska said that “the company’s reporting structure makes it very visible that it will continue to lose billions on its EV business unit Model e.”
This, combined with the lack of “significant volume growth,” could result in Ford being “unable to turn a profit in upcoming years.”
Last week, Daniel Roeska had raised Ford’s price target to $8.30 over a “lower tariff impact in 2025” than previously expected. However, the new target still implied a downside of 20%.
Roeska had maintained the Underperform rating on the stock as it expects a “weaker” second half of the year due to “production cuts and tariff headwinds.”
Citing uncertainty over the tariff scenario, the automaker suspended its financial forecast as it reported its quarterly results, stating that it expected a $1.5 billion hit from Donald Trump’s 25% tariff on imported vehicles and auto parts.
As of the time of writing, Ford shares are trading at $10.16 on Friday’s market session. Despite a slight growth of 3% year to date, the stock has lost nearly 16% over the past twelve months.
General Motors‘ shares rose 5% over the past twelve months and are currently trading at just below $50.
In contrast, Stellantis lost 53.7% since a year ago. As of the time of writing, the group’s shares are trading 1.2% lower at $10.19.
