It’s a “new world order” for the US auto industry, says UBS, downgrading GM and slashing Tesla price target

Carmakers’ stocks tumbled again Thursday, unable to hold their gains after climbing on Wednesday when President Trump’s tariff pause news generated a massive market pop.

Wall Street appears to be sobering up and recognizing that the White House’s 90-day pause doesn’t apply to sector tariffs, like those on cars, and additional duties on auto parts are coming next month.

Case in point: a sweeping reassessment of the auto sector published this morning by UBS, declaring a “new world order” for the auto industry. The firm downgraded General Motors from “buy” to “neutral” and slashed its price target by 20%. UBS also slapped Tesla, Ford, and Rivian with double-digit percentage cuts to price targets. In addition, analysts cut price targets on 17 other suppliers and online dealers by 10% or more.

While the reciprocal tariff reduction might help reduce the risk of recession and a major drop in auto demand, UBS wrote that the sector-specific auto tariffs “are likely to remain for the foreseeable future.” Even if more car manufacturing does return to the US, UBS added that finding the workforce could be difficult and expensive.

“Bottom-line, all OEMs have higher costs going forward,” they wrote.