Automakers face rising costs and weak growth heading into 2027

The risks extend beyond the United States. Automakers face intensifying competition from Chinese manufacturers in other markets, a thinner pipeline of new vehicles after some companies pulled back from all-electric plans, and challenges specific to individual companies and regions.

“With investor focus increasingly shifting to 2027, the setup appears challenging,” Barclays analyst Dan Levy wrote in an investor note last month. He cited rising inflation, continued pressure from China, affordability concerns in the U.S. and a flat global production outlook, which he said point to another year of limited earnings growth.

Several Wall Street analysts say automakers will need to maintain pricing strength and find further cost savings to offset inflation, higher investment spending and the possibility of a weaker economy. Without those supports, even maintaining current earnings levels could prove difficult.

The outlook varies by region. “It’s a little bit more optimistic in the U.S. and then very pessimistic in Europe,” RBC Capital Markets analyst Tom Narayan told CNBC. “As a whole, there’s some negativity on ’27.”