According to Zhitong Finance APP, after the Biden administration withdrew the electric vehicle mandate and emission restrictions, Ford Motor (F.US) was expected to benefit alongside other USA internal combustion engine Auto Manufacturers. However, Jefferies' Auto Analyst team downgraded Ford's rating from "Hold" to "Underperform Large Cap" and significantly cut its Target Price by 25% to $9, indicating that the stock price might drop by 13%. Behind this rating adjustment are a series of local rather than systemic challenges faced by Ford, including inventory backlog, strategic adjustments or exits from the Europe Business, and the widening gap between warranty reserves and Cash / Money Market.

It is understood that Ford's start in 2025 is particularly difficult, especially with a cumulative gap of $8.5 billion between warranty/quality reserves and Cash / Money Market outflows, while the company is also pushing an undisclosed electrification strategy that may center around range extenders. Jefferies believes this strategy may focus on range extender technology, which will be crucial for the company's future technological development.

Although Ford's balance sheet is considered "solid rather than strong," if the company wishes to maintain a conservative financial position, restructuring and warranty claims may consume the remaining Cash of Shareholders.

Meanwhile, the Jefferies team has maintained a "Hold" rating on General Motors (GM.US), believing that its robust capital allocation policy and ongoing tightening measures enable General Motors to occupy a favorable position when market trading conditions improve.

Although General Motors may face pressure from changes in electric vehicle policies in 2025, which could undermine its efforts to expand production for profitability, and while Stellantis (STLA.US) is also working to seize market share from General Motors, Houchois and his team are optimistic about General Motors' future profitability and Share Buyback potential.