Barclays Downgrades U.S. Auto Sector

Barclays has downgraded its rating on the U.S. autos and mobility sector to "negative" from "neutral," citing concerns that President Donald Trump’s tariffs could squeeze automakers’ earnings and dampen future investment, Reuters reported.

Barclays downgraded General Motors to "equal weight" from "overweight." I Photo: General Motors

The downgrade mirrors a warning from Goldman Sachs last week, when the firm cut its estimate for 2025 U.S. vehicle sales by nearly 1 million units.

Though Trump temporarily paused tariffs on most imports and granted exemptions for certain Chinese goods, duties on autos, steel, and aluminum remain in effect. "Amid a highly challenging environment, making a near-term investment case for the autos sector is increasingly difficult," Barclays analyst Dan Levy wrote.

"Auto tariffs are seemingly here to stay, and valuations are seemingly not pricing in full tariff risk."

Barclays downgraded General Motors to "equal weight" from "overweight", noting that nearly half of GM’s U.S.-sold vehicles are assembled outside the country—including its affordable EVs, which are produced in Mexico.

The firm expressed a "modest" preference for Ford, which assembles a greater share of its vehicles domestically.

Barclays also downgraded shares of auto tech companies Aptiv, Mobileye Global, and Visteon Corp, warning that automakers may delay the adoption of new technologies amid pricing pressures.