- Over the last four years, automakers introduced more than 200 new cars
- In the next four, a new report says, they’ll show off just 159
- Insiders blame tariffs, regulatory changes, and an uncertain EV market
The auto industry is slowing down. Amid tariff turmoil, major changes to U.S. regulations, and shifting sentiment about EVs, automakers will design and release fewer new cars this year.
This year, they’re pulling back. A new report says we could see just 159 over the next four years.
Bank of America Securities has published its annual Car Wars report. It’s a document that industry insiders look to every year for a broad perspective on where the auto industry is going. If you’re a car shopper, it’s not worth a detailed read. But knowing the trends it highlights can help you plan.
The trend it highlights, this year, is a pause.
EVs and PHEVs Drove the Increase
- Growth came from building new EVs and hybrids while keeping gas-powered cars
In the last four years, automakers have released more than 200 new cars. The number has grown as they’ve added new electric vehicles (EVs), plug-in hybrids (PHEVs), and hybrids to their lineups while keeping the gas-powered ones.
That’s slowing as automakers delay new EVs.
The Detroit News notes, “Car Wars is predicting 71 EV nameplates being offered over the next four years. That’s about half of what the forecast had expected two years ago.”
Uncertainty Is Bad for Business
- EV policy was a ‘head fake’ for carmakers
- Tariffs, and constant tariff changes, make it hard for them to know their costs
Bank of America analyst John Murphy called recent government behavior an “EV head fake” that confused automakers. They moved heavily into EVs as the Biden administration launched a $7,500 tax credit for EV buyers and funded money for new chargers.
They’re pulling back as the Trump administration tries to end the rebate and freezes the charger funding.
“We have never seen this kind of change before,” he added.
On-again, off-again tariffs also make it hard for automakers to plan into the future.
Predicts China Collapse
- The report sees a bursting bubble for Chinese automakers
Bank of America makes one prediction we’ve heard from few analysts – that the ballooning Chinese auto industry is primed for a crisis.
The report, industry publication Automotive News notes, warns that China’s “overcapacitized market looks very similar to North America in the years immediately preceding the 2007-09 Great Recession, and that pricing wars currently raging there will be hard to break.”
CNBC adds, “In China, the average car retail price has fallen by around 19% over the past two years to around 165,000 yuan ($22,900).” Those prices can’t sustain a growing industry, the report says.