From CNBC: 2025-06-05 12:57:00

The automotive industry faces unprecedented disruption and uncertainty due to regulations, electric vehicles, software innovations, and competition from China. The “Car Wars” report predicts future products and plans. Automakers like Tesla and Honda are above average in replacement rates, while Nissan and Toyota are at the bottom. General Motors and Stellantis are in the middle.

Analyst John Murphy predicts multibillion-dollar write-downs for automakers regarding EVs due to slower market development than expected. Automakers are returning to core products like internal combustion engines to generate capital. The “ICE Age Cometh as EV Plans Freeze” investor note title reflects this change.

China’s auto industry, the world’s largest, is experiencing a price war and stalling sales. Price cuts are affecting hybrid, battery-only, and traditional fuel-powered cars, with the average car retail price falling by 19% in the past two years. Analysts predict mass consolidation of China’s automotive brands due to the price war.

“Car Wars” forecasts a shift in new vehicle introductions, with a slowdown in replacement rates and a focus on core products. Crossover vehicles, which have grown in popularity, are expected to decrease in launches over the next four years. The surge of crossovers is reported to be over, with fewer models expected to be launched compared to previous years. Automakers are shifting focus to updating full-size pickup trucks, impacting the industry. Japanese automakers have also experienced product cadence volatility, focusing on cars. Investors have been skeptical of auto stocks due to faltering growth areas, but potential lies in software for automakers and retailers. The aftermarket industry and dealership business represent $2.4 trillion in revenue, with untapped profitability through vehicle connectivity. Dealers play a crucial role in driving customers to dealerships for increased profits and growth opportunities.



Read more at CNBC: Five auto insights investors should know from top BofA analyst