The fourth-quarter earnings season for the Auto-Tires-Trucks sector is underway, with Tesla, General Motors, and PACCAR reporting. Tesla and General Motors beat earnings expectations, while PACCAR matched. The sector’s earnings are expected to decline by 12.9% year-over-year, with revenues estimated to contract by 5.7% for Q4 2025.

The U.S. auto industry faced challenges in Q4, with slowing vehicle sales, higher costs from tariffs, and inflation impacting profitability. The EV market saw a sharp slowdown post the expiration of federal tax credits. Affordability became an issue as new vehicle prices hit record levels.

Ford, QuantumScape, BorgWarner, and Lear Corp. are identified as potential outperformers this earnings season. Ford saw sales growth driven by hybrids, while QuantumScape’s solid-state battery technology and partnerships with automakers are promising. BorgWarner’s clean technology solutions and acquisitions position it for growth, and Lear’s strategic acquisitions and program wins support its strong performance.

Ford, with an Earnings ESP of +16.06% and a Zacks Rank #1, is set to release its Q4 results on Feb. 10. QuantumScape has an Earnings ESP of +17.02% and a Zacks Rank #3, with results due on Feb. 11. Lear, with an Earnings ESP of +1.75% and a Zacks Rank #3, will release results on Feb. 4. BorgWarner, with an Earnings ESP of +2.61% and a Zacks Rank #3, will report on Feb. 11.

Read more at Nasdaq: Auto Sector Q4 Earnings: 4 Stocks With Surprise Potential