Analysts at Morgan Stanley sparked a shakeup across auto stocks Wednesday as the firm moved to the sidelines on automakers and turned more positive on dealers and parts companies.

What Happened: Morgan Stanley analyst Adam Jonas downgraded Ford Motor Co (NYSE:F), General Motors Co (NYSE:GM) and Rivian Automotive Inc (NASDAQ:RIVN) on Wednesday as he cut his overall U.S. auto industry outlook from Attractive to In Line.

Jonas' more sour view of the auto industry landscape is being driven by a combination of factors he believes may not be fully understood by the market, including climbing inventories...