High Grade Automotive Weekly Road Trip

Research evidence excerpt

High Grade Automotive Weekly Road Trip

J P M O R G A N North America Credit Research

24 July 2026

High Grade Automotive

Weekly Road Trip

North America Corporate Credit -

Autos & Auto Parts and

Manufacturing (IG)

Evan Piascik AC

(1-212) 834-4432

evan.piascik@jpmchase.com

Welcome to this week's edition of the Weekly Road Trip. The JULI Automotive index

Max Berman

tightened 4bp YTD to 97bp while JULI widened 2bp YTD to 92bp.

(1-212) 834-2380

Topical This Week: max.berman@jpmorgan.com

J.P. Morgan Securities LLC

• On Wednesday, S&P published a bulletin on GM and stated that its 2Q26

results and improved 2026 margin and free cash flow guidance demonstrate its

positive momentum “relative to its ‘BBB+’-rated peers” (GM is rated BBB/

stable by S&P). S&P expects GM’s EBITDA margins to be “nearly 10%” in

2026 (up from 9.5% prior) and above 10% by 2027 with FOCF/sales of over

4% by 2027. The anticipated EBITDA margin expansion to 10%+ in 2027 and

2028 (v. upgrade trigger of sustained EBITDA margins “well above 10%”) is

expected to be driven by further-reduced EV losses, launches of new high-

margin trucks, and increased penetration of digital services. S&P is not

assuming material profit upside from the growing defense business and GM’s

investment in Peak Energy (sodium-ion battery cells for grid-scale storage),

and it will seek to understand how changes in the USMCA could influence

future onshoring investment by GM. We view GM as well-positioned for

ratings upgrades, as we highlighted in our ratings screen published on Tuesday.

• On Thursday, Ford announced a Manufacturing JV with Geely Automobile

(66%/34% ownership, respectively) at Ford’s Valencia, Spain facility. The JV

will target ~500k units of annual capacity at Valencia, with operations