American Carmakers And Analysts Are Nauseously Optimistic About The Future

I love the phrase “nauseously optimistic,” because that’s how I feel most of the time when something is going well. While I’m a generally positive person, I cannot entirely silence the voice in the back of my head that enumerates all the things that could go wrong. It’s how I would describe every Mariners fan going into the bottom of the 7th inning last night.

Are automakers happy about losing billions of dollars to tariffs and having to shift a bunch of their production? Probably not. Is it as bad as it could have been? Also, probably not. The temptation I always have when writing The Morning Dump is to give in to either doomerism or unqualified exuberance. To get lost in the sound of battle and not see the larger map.

This was the case when I started writing TMD, and it simultaneously seemed like the industry would never pull itself out of the chip shortage and somehow also sell 10 trillion EVs in the United States by the end of the decade. I like to think I resisted both, although I’m sure you can find examples of me giving in to temptation just a little bit.

With tariffs, it’s been easy to assume that everything would go wrong and automakers wouldn’t absorb any of the costs. That’s not quite what happened. Instead, GM thinks it’ll do ok, and most analysts are saying the sky hasn’t entirely fallen.

You want some doomerism? Here’s some doomerism: Toyota’s reasoning for not selling the Baby FJ is super bleak and makes me sad. It’s also the inverse of why some Europeans really don’t want our cars.

And optimism? Here’s some optimism: Dacia Duster. That’s it. Dacia Duster.

GM Slightly Revises Up Earnings Estimates For 2025

Going into the year, most automakers had rosy predictions for how much money they’d all make. For some reason, they didn’t take the threat of a global trade war seriously. And then it happened, and it was a mess, and none of it made any kind of sense.

The good news for automakers, depending on your perspective, is either that President Trump always “chickens out” (the TACO trade) or that the President is willing to listen and to adjust policy as necessary. You can imprint your views on the news that the White House is considering importing beef from Argentina to help bail out that country and lower costs, and what it means for a White House that’s trying to make the case that we should do the opposite for seemingly every other product sold from any other place.

Either way, GM sees things as not so bad. The company’s Q3 earnings data isn’t great, as earnings and net income both declined significantly. The market expected worse, and CEO Mary Barra, in her letter to shareholders, acknowledged that the company is in a position to slightly raise its lowered revenue guidance for the year:

Thanks to the collective efforts of our team, and our compelling vehicle portfolio, GM delivered another very good quarter of earnings and free cash flow. In the U.S., we achieved our highest third-quarter market share since 2017 with strong margins, and our restructured China business was profitable once again. Based on our performance, we are raising our full-year guidance, underscoring our confidence in the company’s trajectory.

One of the big changes, she notes, is the MSRP offset announced last week. Now that automakers can deduct a huge portion of tariffs if the cars are assembled in the United States, there’s going to be less of an impact going forward. This applies not only to American automakers, but also to any company that builds a lot of cars here (Honda, Toyota, et cetera).

This does make me wonder if the White House isn’t inadvertently encouraging companies to raise the MSRPs of their cars and then discount on the back end, thus giving themselves more tariff relief.

American Car Execs Are Less Freaked Out, But That Doesn’t Mean Things Are Perfect

As much as I’d like to enjoy the moment of blissful optimism, carmakers and CEOs are mostly saying it’s not going to be as bad as they thought, not that it’s going to be immediately great.

There’s a good CNBC article today that goes through a lot of what analysts and carmakers are saying, and it’s mostly: It could have been worse. Here’s a nice summation:

“There’s some positives for next year, but there could also be some really bad negatives if there’s a freak out on tariffs or the consumer finally breaks down or whatnot,” Morningstar analyst David Whiston told CNBC. “But no one’s calling for a complete crash.”

Whiston — who covers GM, Ford and several auto retailers and suppliers — characterized his outlook as “cautiously optimistic,” saying the significant industry concerns are countered by other bullish circumstances.

UBS analyst Joseph Spak agreed, noting a lot of challenges for automakers such as tariffs and losses on electric vehicles “have already been incorporated into 2025/2026 estimates,” he said in an investor note last month.

Again, some of this is premised on nothing bad ever happening. If there’s a drop in consumer confidence, a run on the banks, or whatever, this tenuous peace we have could break.

Toyota Says The Baby FJ Is Too Small For Us

We finally got to see the Baby Land Cruiser FJ, and I love it. At the same time that it was announced, it also became clear that we’re not getting it. Ugh! Why?

Here’s an answer from Automotive News:

The FJ will be built in Thailand and target emerging markets in Southeast Asia, Africa, the Middle East and Latin America, Uchiyama said. It will also be offered in Japan.

Uchiyama, who oversees the entire Land Cruiser family, said the FJ is too small for the U.S.

“There are no plans for America or Europe,” Uchiyama told Automotive News during an Oct. 20 preview at Toyota’s Higashi-Fuji technical center. “The start point for this is the global South.”

You sonofabiiiiiiish!

American Cars Are Too Big For Europe, Says Some Europeans

I love going to the UK and counting how many Mustangs I see. The Brits love a Mustang. Actually, all good people love a Mustang.

That being said, the environmental policy group Transport and Environment is not super pleased about the US and EU harmonizing standards as a way to get the Trump admin to lower tariffs. Why? Our cars are not built for European roads:

The deal agreed over summer states that “with respect to automobiles, the United States and the European Union intend to accept and provide mutual recognition to each other’s standards.” Yet, EU vehicle safety regulations have supported a 36% reduction in European road deaths since 2010. By contrast, road deaths in the US over the same period increased 30%, with pedestrian deaths up 80% and cyclist deaths up 50%.

Europe currently has mandatory requirements for life-saving technologies, such as pedestrian protection, automated emergency braking and lane-keeping assistance. Some of the most basic pedestrian protection requirements which have long been in place in the EU, such as deformation zones in the front of vehicles to reduce crash severity and the prohibition of sharp edges have made cars like the Tesla Cybertruck illegal to sell in Europe.

“Europe built its reputation on pioneering robust vehicle standards.To accept lower US standards would undo decades of EU progress,” say the signatories. According to the letter “the consequences of such a move for European road safety would be profound.”

Look, I don’t care about your facts; I only care about my feelings. And my feeling is that it would be a lot of fun to roll around Barcelona in a Bronco Raptor.

Also, yeah, many of our cars are not really built for European roads, which is why I think this is somewhat overblown. While a few people might import some interesting cars, I think generally American HD trucks aren’t going to be that appealing to Europeans.

You know what Europeans buy a lot of? The same sort of mid-size and smaller crossovers that Americans are buying in huge numbers.

Dacia Duster

You know what’s a small SUV I’d love to see here rebadged as a Nissan? The super cheap Dacia Duster. Here’s a Dacia Duster Extreme 4×4 being used by the Bridgnorth Community First Responders.

The volunteer-led organisation, which began in 2001 as part of an initiative to support ambulance services in remote areas, has grown into a vital lifeline for the local community. Trained by West Midlands Ambulance Service in advanced first aid, the eleven-strong team of volunteers respond to 999 emergencies across Bridgnorth and the surrounding villages, providing critical care in the vital minutes before an ambulance arrives.

To mark their upcoming 20th anniversary and keep pace with increasing demand, the group has invested in a new Dacia Duster Extreme 4×4, replacing their decade-old vehicle. It was a choice driven by both necessity and pragmatism.

I’m a fan of both necessity and pragmatism.

What I’m Listening To While Writing TMD

Have I really never done “Big in Japan” by Tom Waits off the excellent Mule Variations? That seems unlikely. Apologies if I’ve done this one before; it just fit today.

The Big Question

Answer the following:

• First, name a car too big for Europe.
• Name a car too small for the United States
• Name a car that’s the perfect size for everywhere

Top graphic images: GM; DepositPhotos.com