General Motors may face a tough time going forward as tariff pressures mount, according to Deutsche Bank. Analyst Edison Yu downgraded the automobile maker to hold from buy, citing “structural uncertainty” stemming from the rollout of U.S. tariffs. Yu’s updated price target of $43, down from $58, is roughly 1% below General Motors’ Friday close. GM 1Y mountain GM 1Y chart “At the core, assuming these tariffs are truly permanent, GM will face structural challenges for years. … Should the company decide to onshore, this will naturally lead to lower profitability and higher capex (i.e., in turn less FCF),” the analyst wrote. “Moreover, we suspect any attempts toward aggressive usage of automation and robotics (e.g., humanoids) would almost certainly be met with opposition by the UAW/politicians.” “For the full-year, we expect volume to present a headwind of about $2bnm,” Yu added. “Another key headwind to consider is the commodities cost. GM’s largest commodities exposures are steel and aluminum, both of which are subject to a 25% tariff. Steel prices have risen by ~30% YTD; approximately 1/3 of GM’s steel supply contract is based on spot buys, 1/3 on annual contracts, and 1/3 on multi-year contracts.” Shares of General Motors have tumbled 18% this year, weighed down by headwinds such as President Donald Trump’s announcement of a 25% tariff on “all cars not made in the United States.” Separately, Yu stood by his buy rating on electric vehicle maker Tesla. The analyst’s $345 per share price target implies that Tesla could rise 37% from here. “We continue to view Tesla favorably longer term as an embodied AI secular winner but acknowledge it faces many cross currents for the next quarter or two,” he wrote. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
