America Finally Has Enough Crossovers, Thank You Very Much

I attended the Houston Auto Show in 1996 as a car-pilled 12-year-old, and I distinctly remember a concept for a “crossover” vehicle from some random supplier. It wasn’t quite a car, but not a body-on-frame SUV. I talked to the reps for the company, and they said it was the future. We’d all be driving crossovers! They were not wrong, and the Toyota RAV4s that were slowly filling the streets around that time were a testament to their prognostications.

It’s now 30 years later, and there are plenty of crossovers. Too many crossovers? The latest Bank of America “Car Wars” report says we’ve probably reached crossover saturation, finally. The percentage of new car models that are crossovers might even go down in 2029 by a decent margin.

As a regular reader of The Morning Dump, you’re probably aware that one of the reasons we’ll see a drop in crossovers as a total percentage of the market is that automakers are cancelling EV projects, and a lot of those were supposed to be CUVs. One company that’s pushed forward is General Motors, and they say it’s working out for them. It’s also working out for BYD, but in a way that’s destabilizing the local and global economies.

Tesla was the original EV disruptor, but now it’s been disrupted, and some big analysts are saying the stock is a little overweight.

The Crossover Saturation Point Has Been Reached

You will not be surprised to learn that Crossovers, which were merely one option for many years, have suddenly become the default option. According to Bank of America’s “Car Wars” report, from 2016 to 2025, crossovers made up 50% of new model launches by volume, compared to just 25% for light trucks (SUVs and trucks), 11% for small cars, 5% for luxury/sports cars, and just 9% for mid-sized/large cars.

The Crossover is a result of both taste and the inevitable carcinization of the car market. People want big things that have a lot of space, thus the success of wagons, followed by minivans, followed by SUVs. What people thought they needed didn’t change, but preference and fashion did dictate the form in which that functionality would be delivered.

A crossover, though, is sort of a mix of SUV, minivan, and wagon, depending on what your particular flavor is. A Cadillac XT6 is a minivan without sliding doors, just like a Subaru Outback is a wagon that shops at REI, or a Bronco Sport is an SUV that doesn’t go to the gym.

Looking at the chart above, you’ll see the non-volume weighted percentage of new car reveals (either brand new models or significant refreshes). You’ll see small cars vanish as they’re replaced by crossovers both large and small. That changes a bit in the last couple of years as EV crossovers and new electric sedans started to come on the market, as well as a new Camry and some other reveals. In 2029, there’s another relative decline in crossovers, reflecting both a cancellation of EV projects and the full-size truck lifecycle.

As BofA puts it:

Since the MY1997 launch of the Toyota RAV4 and the Honda CR-V, crossover utility vehicles (or CUVs) have been the fastest growing vehicle segment in the US. However, that trend is finally slowing and may be plateauing. Specifically, 79 of the 159 new models we forecast for MY2026-29, or 47% of estimated new volume, will be CUVs. Although, there is still a focus, the relative mix of new CUVs drops meaningfully through MY2029. The CUV segment now appears saturated by almost all automakers increasing competition and putting the segments’ profitability at risk.

This is somewhat analogous to the proliferation of light truck nameplates in the early 2000s (Exhibit 11), but the CUV proliferation has been more than 2x and broadbased. It is unlikely that the CUVs will drop like trucks did, but it will be interesting to watch.

Basically, most car companies can’t necessarily make more money by releasing a bunch more crossovers. Where would a new crossover even fit within Toyota’s lineup?

GM Releases Non-Quarterly EV Sales To Brag About EV Sales

General Motors decided in 2018 that it didn’t want to do monthly sales releases, shifting instead to a quarterly number. As a data person and a journalist this kinda sucked, but I suppose this is a not my pig, not my farm situation. GM can do whatever it wants.

As proof, GM decided to release some EV sales numbers to brag about becoming the 2nd biggest EV company in the United States (After Tesla, supplanting Ford).

In the 2025 first quarter, Chevrolet became the fastest growing domestic EV brand, surpassing Ford. For the year through May, Chevrolet has sold more than 37,000 EVs in the U.S., compared to 34,000 for Ford. GM will report second quarter sales on July 1.

GM’s portfolio includes highly capable full-size trucks with impressive, available range like the Chevrolet Silverado EV, GMC Sierra EV, and GMC HUMMER EV; groundbreaking luxury SUVs from Cadillac like the Escalade IQ; and the budget-friendly Chevrolet Equinox EV.

May was GM’s second-best month in history for EV sales, which follows 94% year-over-year growth in the first quarter. In the first two months of the second quarter, GM’s share of the U.S. EV market was about 15.5%, more than double our position a year ago and approaching the company’s national market share of 17%.

General Motors makes good electric cars. It makes a lot of them. It even makes a relatively affordable EV in the form of the $35,000 Equinox EV, which I drove and was impressed with! Some of this is fun with numbers, because if I could do two pullups last year, and now I can do four pullups, I’ve increased the number of pullups I can do by 100% (note: I’m not sure I could do that many pullups).

Still, it’s an accomplishment, and GM is proving that it can still find new customers for electric cars in spite of headwinds.

Everyone Is Mad At BYD

Yikes. Just… yikes. BYD is probably going to be the biggest electric automaker in the world this year, thanks both to building affordable cars of reasonable quality and to a brutal, never-ending price war. The company is bringing a specific type of energy to its endeavors that would make Patti LuPone blush.

Like LuPone, the rest of the industry is mad at BYD, and the country’s leaders are starting to recognize that a victory for BYD over Tesla might be a pyrrhic one. Why? While China is not a profit-focused country in the EV space at the moment, carmakers are trying to lower costs by squeezing suppliers until they pop like a homemade stress ball.

Per Bloomberg:

Some auto manufacturers have been asking steelmakers to reduce the price of steel plates used in vehicles by more than 10% since last year, the China Iron and Steel Association said in a statement published in China Metallurgical News on Tuesday. Some carmakers have also delayed payments to mills by months, it said.

The country’s EV industry is in the throes of a vicious price war, sending share prices tumbling and prompting government intervention to try and prop up the market. It’s a fresh headwind for Chinese steel mills who have been grappling with a yearslong property market crisis and, more recently, slowing economic growth caused by US-led trade wars.

And that’s not all, from Nikkei Asia, BYD’s also putting pressure on global rubber futures:

International prices for natural rubber are plummeting as price cuts by major Chinese electric vehicle maker BYD triggered concern that a possible price war in the country’s auto sector will weigh on tire prices.

Speculation that price reductions for EVs and plug-in hybrids will lead to downward pressure on tire prices has resulted in a drop in the natural rubber market. Tires account for 70% of natural rubber demand.

Benchmark rubber futures on the Osaka Exchange fell 4% on June 3 to 280 yen ($2) per kilogram, the lowest price since February 2024. Though futures prices had tumbled after U.S. President Donald Trump announced his sweeping tariffs in early April, they rebounded later as tariff tensions between Washington and Beijing eased.

Dang, I was going to pay for my kid’s college with the collection of WHAM-O Super Balls I’ve been keeping under my bed.

Tesla Gets Downgraded Again

Tesla CEO Elon Musk, fresh from reportedly getting in a fight with the Secretary of the Treasury, is now having to wrestle with a couple of downgrades from analysts, as Bloomberg reports:

Both Argus Research and Baird cut the stock to the equivalent of hold ratings, cementing Tesla’s reputation as the least-loved megacap stock among analysts. Shares fell 1.6% in premarket trading.

The downgrades mark the latest hurdle for Tesla, shares of which are down about 27% in 2025, making it the weakest performer of the so-called Magnificent Seven stocks. Tesla shares had rallied in the wake of Trump’s reelection, which Musk vigorously supported, but are down almost 40% off their peak in December.

Much of the stock’s recent decline came after the high-profile blowup between Musk and Trump last week. While Musk subsequently suggested he was open to making amends, the tensions are seen as a significant headwind overhanging the shares.

Musk deleted a lot of his mean tweets and the stock price went back up, so maybe it’s just that easy.

What I’m Listening To While Writing TMD

I adore Talking Heads. An all-time band. Sometimes my favorite band. I went to see Stop Making Sense in a theater in 2024 because I care. For reasons mostly of timing, the band never released an official video for “Psycho Killer.” The Internet is weird, and an older band’s most popular songs now might not be what was most popular back then. Why is Pavement’s “Spit on a Stranger” so popular? Who knows? Partially due to Guitar Hero, maybe, “Psycho Killer” has had almost double the number of Spotify streams as the band’s second-most-streamed song. Anyway, it was worth the wait to get Saoirse Ronan in a Talking Heads video.

The Big Question

What’s your favorite crossover?

Top Photo Credit: Toyota