A new report analyzing the auto industry says demand for trucks and SUVs has peaked while electric vehicles are “here to stay” even after President Donald Trump issued an executive order undoing EV policies by the Biden administration.
The report is a forecast from the Dave Cantin Group, an advisor to auto dealers. The report is being issued as the National Automobile Dealers Association has its annual convention in New Orleans.
Here are some of the highlights of the Dave Cantin Group forecast:
—Truck demand: The U.S. is “finally moving away from trucks and SUVs toward more affordable sedans, driven by concerns over vehicle affordability,” Dave Cantin Group said in a statement. “This trend promises to challenge manufacturers lacking competitive sedan offerings.”
General Motors Co., Ford Motor Co., and the U.S. operations of Stellantis have mostly given up on cars while emphasizing pickups and SUVs. GM and Ford are relying on pickup and SUV profits to finance their EV and hybrid investments.
Full-size pickups are the biggest profit generators for U.S. automakers: Ford’s F-150 and Super Duty, GM’s Chevrolet Silverado and GMC Sierra, and the Ram brand from Stellantis.
—EVs: Dave Cantin Group says EVs “are undeniably here to stay. Together, hybrid and electric vehicles are undeniably a growth driver and with dealers becoming more receptive to selling these models, we can expect the combined segment to steadily gain market share for the foreseeable future.”
Automakers have adjusted their EV investments as growth in the segment has slowed. GM said Dec. 2 it will sell its stake in an almost completed Lansing, Michigan, battery plant to its joint venture partner LG Energy Solution. Terms were not disclosed while the automaker said it expects to recoup its investment at Lansing.
Detroit-based GM will now rely on two joint venture plants in Ohio and Tennessee to supply the automaker’s factories that produce EVs.
At the same time, GM CEO Mary Barra is a big proponent of EVs. “We fundamentally believe EVs are better,” she said at a December gathering of the Automotive Press Association.
EVs face a challenge with a new administration in Washington. Trump’s executive order said it was eliminating “unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable.”
Despite that, Dave Cantin Group’s report is optimistic. It cites “maturing infrastructure, decreasing battery costs and new battery chemistries.” The report said that may lead to “the launch of lower-cost EVs in the coming years.”
—Korean automakers: “Consumer preference for Korean brands is outpacing all others,” the Dave Cantin Group statement said. Korean automakers “have achieved the perfect balance of product design, technology, pricing, and reliability leading to increased market share and positive consumer sentiment. The improvements and affordability have found a sweet spot with consumers.”
—Uncertainty: The report cites various uncertainties that may affect the auto industry, including “the unpredictability of pollical decisions – particularly regarding U.S. trade policies and tariffs.”
The report also says automakers “will be placing more big bets than ever to win market share and this will lead to clear winners and losers causing industry wide disruption of the status quo.”
