2025: The year the Big 3 backed away from EVs

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• The execution at GM has been way more consistent, which is the reason why their margins have been so much larger compared to Ford over the past seven, eight years. I think GM has been [more consistent in execution] under Mary Barra. We've seen as the tables turn, more decisive steps, more control over all the things that the industry throws at them, whether it's supply chain shocks from bottlenecks that emerge, labor union negotiations, you name it.

  80% confidence

• I wouldn't be surprised if more charges were to happen, and that's only because after Q3 when they put out the $1.6 billion charge announcement, there was a pretty clear statement in their filing which said there could be more material announcements related to program cancelations, supplier charges, etc., very similar to what Ford announced

  80% confidence

• We're going to do the right hybrids that we think are important for our portfolio, but I also think we have a very strong EV portfolio and a very strong internal combustion [portfolio]. We're going to be positioned to compete well, but also be good stewards of our owners' capital and how we deploy R&D dollars.

  80% confidence

• Stellantis has launched new ICE product in the US to capitalize on the trend of prolonged combustion engine life and should benefit from a mix skew to ICE particularly in the US

  80% confidence

• There's no question that the demand environment is going to be challenging. Companies generally expect EV adoption to hit about 5% to 7% of new vehicle sales over the very near term. But our message over the next couple of years is don't sleep on the US EV market.

  80% confidence

• Ford could conceivably be vulnerable to any upside from EV demand, should it arise

  80% confidence

• After over-investing in luxury EVs and electric trucks, automakers are now pivoting toward the sub-$35,000 segment, think revamped Bolts and Leafs, to keep EV adoption alive

  80% confidence

• Overall, ICE technology will be around for longer which is positive for mix of OEMs but at the same time requires additional investments to keep the technology up to date and has caused write-offs on EV model lines. We find that others like GM and Ford are increasingly promoting the narrative around flexible manufacturing.

  80% confidence

• We view it as a decisive, strategic reset. Historically, Ford's been a little slow to act on very important strategic items in terms of cutting losses early

  80% confidence

• We think that for Stellantis to get back towards levels of profitability we see at GM, it's going to take a while

  80% confidence

• It does give them long-term flexibility and near term we see the path towards less losses, because they're going to be having less underutilized EV assets

  80% confidence

• They still have a wide portfolio and enough capacity to adjust to market demand, and they'll have, of course, new technologies as well

  80% confidence

• We can't allocate money for things that will not make money. As much as I love those products, the customers in the US were not going to pay for them. And that was the end of that.

  80% confidence