The coming year has a lot of unknowns for the auto industry. Barclays analyst Dan Levy cut his rating on Ford Motor shares in response.
The industry has “an air of uncertainty in 2025,” wrote Levy in a Wednesday report. He cited several reasons for concern, including high inventories at dealerships, weakening new-car pricing, and President Trump’s tariff policies.
Trump has proposed 25% tariffs on Canadian and Mexican imports. That threatens either higher costs for consumers, lower profit margins for auto makers, or both.
Roughly 50% to 70% of the parts for popular cars assembled in the U.S. come from Canada or the U.S., according to the National Highway Traffic Safety Administration. Most of the imported parts come from Canada and Mexico. Roughly two-thirds of the cars sold in the U.S. are assembled in the U.S.
One offset for the potential financial damage from tariffs is Trump’s plan to relax U.S. emission standards, Levy said. Ford and General Motors lose money selling electric vehicles, so slower adoption of the cars, a likely result of the change to emission standards, could mean smaller losses for those two.
Levy still rates GM stock Buy, with a target of $70 for the price, but he lowered his rating on the stock to Hold from Buy. His price target went to $11 a share from $13.
Ford stock was down almost 2% in early trading at $10.23, while the S&P 500 and Dow Jones Industrial Average were up about 0.5% and 0.3%, respectively.
Overall, 27% of analysts covering Ford stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Ford shares is about $11.
About 59% of analysts rate GM shares Buy. The average analyst price target is about $60.
Coming into Wednesday trading, Ford stock was down about 7% over the past 12 months. GM stock was up about 53%.
Big share buybacks have helped. GM repurchased some $16 billion worth of stock in recent quarters, significant for a company with a market value of less than $60 billion.