After General Motors (GM) and Hyundai (HYMTF) announced a joint agreement to explore clean energy technologies and other automotive advancements, Wolfe Research managing director and senior research analyst Emmanuel Rosner joins Market Domination hosts Julie Hyman and Josh Lipton to explain why he is cautious about the auto industry.
“There are some real unprecedented structural challenges for the industry,” Rosner says, explaining that “megatrends” in the space, like electrification, autonomous driving, and software adoption, are “taking significantly longer to play out” than initially expected.
“Automakers have been making massive investments” into these trends but are yet to see the payoff as monetization is “taking significantly longer.”
Rosner notes that “massive market share shifts” also affect the auto industry as “there have been some winners in electrification,” namely Tesla (TSLA) and Chinese automakers.
“The five Chinese OEMs and Tesla have essentially been winning,” taking market share from traditional automakers.
The analyst remains cautious about the auto industry at large, saying that given these “tremendous structural challenges.”
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This post was written by Naomi Buchanan.