Goldman Sachs analysts on Thursday downgraded their outlook for the U.S. automotive and industrial technology sectors, citing growing concerns over global competition, weakening consumer demand and rising costs from tariffs.

The bank issued multiple rating changes and estimate revisions across the space, reflecting what it called a “more difficult cyclical dynamic” for the remainder of 2025 and beyond.

Ford downgraded on tariff exposure, weaker margins

Among the most notable changes, Ford Motor (NYSE:F) was cut to Neutral from Buy. Goldman acknowledged that its earlier bullish stance, initiated in September 2024, was overly optimistic.

Since then, the Wall Street consensus estimate for 2025 earnings per share has been revised down by 32% and the stock is down 10%, the analysts wrote, noting that the broader sector has fared even worse. Ford’s (NYSE:F) relative resilience was attributed to investor sentiment at the time of the previous upgrade and cost-cutting progress.

Still, the analysts flagged growing global competition, reduced consumer appetite and higher tariff burdens as key risks. While Ford’s (F) U.S. manufacturing footprint may help buffer against some tariff fallout, Goldman said valuation expansion compared with traditional peers and a slower-than-expected ramp in software and services are reasons for concern.

GM maintains Buy; Tesla and Rivian still Neutral

Goldman is sticking with its Buy rating on General Motors (NYSE:GM), citing its more attractive valuation versus Ford (F) and slightly lower expected tariff-related EPS impact. Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN) remain Neutral-rated, with the bank weighing risks from consumer softness and policy uncertainty against long-term opportunities in AI and vehicle architecture licensing, respectively.

Tier-1 suppliers hit hard: Lear, Visteon downgraded

The bank also downgraded auto suppliers Lear (NYSE:LEA) and Visteon (NASDAQ:VC) to Neutral from Buy, pointing to the sector's inability to fully offset lower industry volumes. Both companies face among the highest exposure to tariffs as a percentage of earnings before interest and taxes, which could significantly compress margins.

Goldman maintained Sell ratings on other suppliers with downside risk or structural headwinds, including Magna (NYSE:MGA), Luminar (NASDAQ:LAZR), QuantumScape (NYSE:QS) and ChargePoint (NYSE:CHPT).

Selective bright spots: BorgWarner, Sensata, Aurora

Despite the broader pessimism, Goldman upgraded a few select names:

• BorgWarner (NYSE:BWA) was raised to Buy from Neutral, with analysts pointing to its favorable China exposure, in-region manufacturing strategy, and potential growth across all powertrain types, especially in EV content and hybrid solutions.
• Sensata Technologies (NYSE:ST) was also upgraded to Buy, following a sharp 24% year-to-date selloff. Goldman called current valuation levels a trough, even on below-consensus earnings, and sees a path to EPS growth in 2026 and 2027 as industrial demand recovers and vehicle electrification gains pace.
• Aurora Innovation (NASDAQ:AUR) received a bump to Neutral from Sell, with analysts noting that their previous bearish catalyst — slower autonomous trucking ramp — has largely played out. Aurora (NASDAQ:AUR) stock has surged 99% since being placed on the Sell list in January, despite revenue downgrades. Goldman now sees a scarcity premium and long-term investor interest in autonomy as supporting the stock.

Aurora is seen as a first-mover in autonomous trucking and is expected to begin driverless commercial operations this year, albeit on a small scale, the analysts wrote, while cautioning that the company still faces a multiyear path to profitability and will likely need additional capital.

Outlook: Tariff drag, valuation pressures

Goldman’s reset on the industry reflects deepening concerns across the U.S. auto complex, especially as new tariffs add cost pressures and consumer sentiment deteriorates. The bank's analysts suggest investors should expect ongoing estimate cuts and tighter margins, but also see selective opportunities emerging in names with tariff insulation, flexible cost structures and clear long-term positioning.