Daniel Miller, The Motley Fool

Tue, Jun 10, 2025, 7:15 AM4 min read

• John Murphy's "Car Wars" report offers insights into the automotive industry.

• Ever-changing EV sentiment has made strategic planning a challenge for carmakers.

• Meanwhile, China's fierce price war is eating at automakers' bottom lines.

• 10 stocks we like better than Ford Motor Company ›

The automotive industry is currently whipsawing back and forth with the uncertainty of tariffs hanging over the manufacturers, suppliers, and -- ultimately -- consumers. That's perfect timing for one of the automotive industry's most highly anticipated presentations: Car Wars, by Bank of America auto analyst John Murphy.

This year's edition recently arrived, and it had a few important takeaways for auto investors as well as automakers -- from the young and niche players such as Rivian Automotive (NASDAQ: RIVN) and Tesla (NASDAQ: TSLA), all the way to more historical players such as General Motors (NYSE: GM).

"The unprecedented EV head-fake has wreaked havoc on product plans," Murphy said in the bank's annual report, according to CNBC. "The next four-plus years will be the most uncertain and volatile time in product strategy ever."

The electric vehicle (EV) industry is still growing, but it's just growing in the U.S. at a pace much slower than originally predicted. While countries such as China are testing EV market share around 50%, the U.S. is lagging behind, and the current administration could make things worse by pulling federal support for EVs.

But automakers' product plans, designs, and vehicle strategies span years, so changing course surrounding something such as EVs could get expensive, and that's partly what Murphy sees happening.

This is important for investors because big changes in plans could mean big charges and write-downs. One example is Ford Motor Company (NYSE: F) and its $1.9 billion in expenses and write-downs due to the cancellation of its planned electric three-row SUV. And it's just one of what will be many such developments in the coming years.

In his report last year, Murphy said, "I think you have to see the [Detroit Big Three] exit China as soon as they possibly can," according to Reuters.

Now, the situation in China is even worse, and the brutal price war has engulfed the entire EV industry. The problem is that it's likely to get even worse before it gets better, and some analysts question whether the industry can pull out of the price war before imploding with weakening demand, overcapacity, and too many brands.