3 car companies facing challenges: The transition to EVs is slowing and investors should be cautious

The U.S. automotive industry is undergoing major changes, primarily due to the transition to electric vehicles (EVs). Although sales of traditional gasoline-powered vehicles remain solid, the growth in EV sales is not progressing as fast as originally expected.

Morgan Stanley analyst Adam Jonas responded to this development by warning of a difficult future for automakers. He recently downgraded Rivian Automotive $RIVN, Ford Motor Company $F and General Motors $GM. Here are the main reasons for his decision and its potential impact on investors.

The View from the Heights

Jonas not only downgraded these specific automakers, but he also changed his view of the entire U.S. auto industry. He has moved it to "mediocre" from its former "attractive" status, suggesting that he now sees little room for stock value growth in the sector. He points to rising dealer inventories in the U.S., which typically pushes down new car prices. While this may seem like bad news for manufacturers like Ford and GM…