Detroit 3 urged to focus on 'core'
'Car Wars' report: Double down on trucks, leave China
BY BREANA NOBLE
The Detroit News
Detroit's three automakers should focus on their core businesses, including gas-powered trucks, and not the Chinese market in the next few years while pursuing advancements in electricvehicle technologies until they can be produced with similar profitability as Tesla, a Bank of America Corp. analyst said on Tuesday.
With a $17,000 component cost difference between the average U.S. EV and a Tesla, EVs being produced by the Detroit Three aren't competitive and won't be for several more years, John Murphy, Bank of America Securities research analyst, said during a presentation of the annual “Car Wars” report. That means General Motors Co., Ford Motor Co. and Stellantis NV should focus on where they are making profits now to fund the research and development needed for the EVs of the future that customers will be able to afford.
Centering on those key profit makers also includes leaving China, the largest automotive market in the world, Murphy said. Although the Detroit Three all have said they remain committed to selling in the country, excessive capacity and competition and advanced technologies offered by domestic manufacturers there have made the market tougher and boosted pressure on pricing. GM lost money there in the first quarter. Meanwhile, there's a high
risk of tariff retaliation. Murphy likened the situation to Europe when GM sold off its brands there in 2017.
“Focus on your core,” he said before the Automotive Press Association at Bank of America in Farmington Hills. “And China is no longer a core strategy to GM, Ford or Stellantis.”