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We have analyzed Q3CY25 results and guidance of key global auto PV and CV original equipment manufacturers (OEM), such as Tesla, Ford, General Motors (GM), Mercedes, Stellantis, Toyota, Suzuki, Hyundai, Volkswagen, BMW, Audi, Porsche, Volvo, Paccar, Daimler trucks to gain insight on the demand, profitability, and electrification trends. The key takeaways are: 1) China’s OEM continue to gain share in the EU, led by growth in PHEV, 2) Europe’s OEM have downgraded guidance in October & Q3CY25, mainly for profitability with significant downgrade in JLR & Porsche, 3) global production growth for CY25 while still muted sees some upgrades in last couple of months, vs estimates given at the start of the year (which is one reason for the recent rally in global auto stocks), 4) OEMs continue to look for alternate source of supply chains, especially post the Nexperia chip crisis, although no major impact is likely, 5) margin pressures to persist (even ex of tariffs) for most OEM in CY25, and 6) medium- and heavy-duty truck markets to remain muted with -9% to -19% volume growth for North America and -1% to -14% for the EU, as per Daimler Trucks. Notably, for CY26, Volvo group expects heavy duty truck sales in EU to increase by ~2% YoY (positive for TMCV) while North America to decline by ~6%.

Cautious commentary on demand; tariff headwinds remain; worsening supply chain: While OEM continue to see headwinds from tariffs persist even in Q4CY25 and CY26 (Ford estimates similar net tariff impact in CY26 as well), which dragged profitability in the low-mid single digits for most global OEM. The supply chain issue remains challenging, especially with the Nexperia chip crisis. However, due to low-value commoditized nature of chips, most OEM expect no major impact. Although the production outlook for CY25 has improved vs Q2, global PV production is set to decline ~1% in CY26, as per S&P mobility November forecast. Provisional November data so far released show that US sales are down by ~6% YoY, while EU top 5 up by 3% YoY in Oct+Nov. US sales were impacted by decline in BEV sales (down 40% YoY in Oct+Nov) post federal credit expiry in Sep-end.

China’s brands continue to gain share in China and the EU (ex-Russia): In CY25 YTD, China’s brands share reached ~69% in China, which was a mere 36% in CY20. China’s brands also continue to gain share in Europe (EU+the UK) reaching ~5.6% vs a mere 3.0% in CY24 YTD. The market share gain by China’s OEM in the EU is sharper in PHEV than BEV. This was driven by China brands focus on PHEV exports to the EU post tariffs on China’s BEV imports.

Read through for India-listed companies under our coverage: Slowing global PV growth as well as shrinking profit pool of global OEM in China, market share pressures of legacy OEM in the EU and slowing US growth are cause for concern for SAMIL (with limited margin expansion potential; we reiterate Sell). Some US OEM have started to refocus on ICE and hybrid models, which means the ICE and hybrid product segment (starter motor) for Sona BLW could see growth in the medium-term vs a structural decline expected earlier. However, growth pressures for Tesla remains an overhang for Sona BLW. The EV demand recovery in the US also remains key monitorable post the slump in October and November after the federal tax credit expiry. For JLR, China is a structural concern (as is the case for all legacy OEM), market share loss in other geographies and recent production losses pose as additional headwinds along with weak global demand outlook (retain Sell on TMPV). Muted global CV demand will remain cause for concern for Bharat Forge, especially as OEM (Volvo) have downgraded NA Class 8 market growth for CY25; however Volvo’s EU heavy duty truck growth expectation of +2% in CY26E, means EU trucks bottoming out

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