(Detroit)

The Wall Street Journal has published that we consider an important and engaging piece about the US auto industry and its disconnection with the direction of the rest of the world. While other major markets, like Europe and Asia, are moving to an ever-cleaner, ever-smaller, ever more electric paradigm, the US is moving further into the “bigger is better” mantra and cutting fuel standards. The disconnection has at its heart two components—the first is Trump’s very different view of climate change and environmental regulation, and the other is cheap gasoline.

FINSUM: We don’t think this disconnect is any cause for alarm in the near-term, but investors should consider that if political winds change (such as in the mid-term elections), then regulations could change quickly, leaving US automakers with a bad product mix.