U.S.-Japan trade pact; Alphabet, Tesla to report - what’s moving markets
Investing.com - Bernstein has cautioned that tariff pressures will dominate second-quarter results for U.S. automakers, with analyst Daniel Roeska stating that "risks continue to outweigh the opportunities" in the sector. This assessment aligns with broader industry indicators, as revealed by InvestingPro data showing significant headwinds across automotive manufacturers, with many facing weak financial health scores and mounting debt pressures.
The firm notes that while Q2 volumes appear resilient, this strength is largely driven by tariff-related demand pull-forward that is unlikely to be sustainable, with production cuts by manufacturers signaling an expected sales slowdown in the second half of 2025, projecting Q4 2025 as the low point. Industry analysis available through InvestingPro indicates widespread challenges, including negative EBITDA margins and concerning debt-to-capital ratios among major players.
Ford Motor Company (NYSE:F) posted strong Q2 sales growth, highlighting short-term gains from tariff-related demand shifts, but Bernstein expects rising tariff costs and weakening consumer demand to pose significant risks to revenue and earnings in the second half of 2025.
For General Motors (NYSE:GM), Bernstein anticipates growing headwinds from tariff costs and rising consumer weakness to present pressures that the company will "unlikely be able to fully offset," potentially causing the automaker to miss its updated fiscal year 2025 guidance.
Electric vehicle adoption faces additional challenges as federal support wanes, with the removal of 30D and 45W tax credits scheduled for the end of Q3, while tariff-driven inflation combined with a shift toward lower-paying jobs is eroding consumer purchasing power, likely curbing discretionary spending on automobiles later this year. For deeper insights into the automotive sector’s financial health and detailed company analysis, including exclusive Fair Value calculations and comprehensive financial metrics, visit InvestingPro.
In other recent news, Polestar (NASDAQ:PSNY) Automotive Holding UK Plc reported significant growth in vehicle deliveries, with 18,049 vehicles delivered in the second quarter of 2025, marking a 38% increase compared to the same period last year. For the first half of 2025, the company delivered 30,319 vehicles, a 51% increase from the first half of 2024. Despite these strong delivery numbers, Cantor Fitzgerald maintained a Neutral rating on Polestar, citing paused 2025 financial guidance and substantial capital requirements estimated at over $2 billion through 2028. The firm also noted that Polestar faces challenges from tariffs and geopolitical tensions due to its primary manufacturing operations in China. Additionally, Polestar secured a $200 million equity investment from PSD Investment Limited, a significant financial commitment from a major stakeholder. The investment involves selling approximately 190.5 million Class A American Depository shares at $1.05 per share. Polestar’s recent sales growth was driven by its Polestar 3 SUV, contributing to an 83% increase in U.S. sales in June. The company continues to expand its retail presence globally, operating in 27 markets across North America, Europe, and Asia Pacific.
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