By George Glover

U.S. car stocks looked set to give up some of their recent gains Thursday. The outlook for the sector remains murky, even after President Donald Trump gave auto makers a one-month reprieve from tariffs.

Ford slipped 1.1% and General Motors fell 1.3% ahead of the opening bell. Stellantis, the Netherlands-based car manufacturer whose brands include Chrysler, Dodge, and Jeep, was down 1.8%.

Shares in the Detroit Three had surged Wednesday after Trump said he would give them a one-month exemption from his 25% tariffs on imports from Mexico and Canada.

But the drop in car stocks in Thursday's premarket suggests investors aren't getting carried away. Morningstar autos equity analyst David Whiston said in a research note published Thursday that the one-month exemption may merely be delaying the inevitable unless the U.S., Canada and Mexico are able to broker some sort of broader tariff deal.

Whiston wrote that the levies, which are now set to come in on April 2, "could erase most of GM's and Ford's annual profit," adding that he hopes that "a deal is reached in some form to at least spare the North American trade zone for autos."

Toyota Motor American depositary receipts were down 1.4% in premarket trading. The Japanese company exports cars to the U.S. from Canada and Mexico, as well as Japan.

German car makers were having a better time of it. Volkswagen rose 2.7% and BMW climbed 2.4% in European trading, to build on their gains since Trump won the U.S. election on Nov. 5.

Write to George Glover at george.glover@dowjones.com

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March 06, 2025 06:29 ET (11:29 GMT)

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