JPMorgan says sell Tesla to buy Aptiv and BorgWarner

JPMorgan analyst Ryan Brinkman recommends selling shares of Tesla (TSLA) to buy Aptiv (APTV) and BorgWarner (BWA), saying auto supplier shares offer relative value after underperforming the car makers since tariffs were announced despite “materially less” regulatory headwinds. The firm sees an opportunity in U.S. auto supplier shares, noting they have underperformed those of U.S. automakers in the time since tariffs were first announced even though headwind from tariffs and other regulatory changes “screens much more benign for suppliers than for automakers.” While Tesla and Rivian (RIVN) are less impacted by tariffs than General Motors (GM) and Ford (F), they could still stand lose up to roughly half of its global EBIT in the case of Tesla and more than all of its gross profit in the case of Rivian from planned cuts to electric vehicle subsidies which have been advancing legislatively alongside the executive actions on tariffs and subsequent trade negotiations, contends JPMorgan.