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Illustration: Rebecca Zisser/Axios

The mood in Detroit is gloomy on the eve of next week's North American International Auto Show, and — for once — it has (almost) nothing to do with Michigan weather.

The big picture: Automakers are bracing for a cyclical downturn, exacerbated by the Trump administration's trade policies, rising interest rates and consumer rejection of 4-door sedans. While tightening their belts, they're still trying to fund massive investments in electric and self-driving cars they say are needed to secure their long-term survival.

Why it matters: The auto industry is undergoing an awkward transition, caught between the decline of trusted business models and the lure of an uncertain future in which cars run on electrons (not gasoline), are shared (not owned) — and where driving is optional.

  • The pressure has already resulted in GM plant closings and layoffs in North America and Ford cutbacks in Europe, with more bad news likely as the industry grapples with excess factory capacity worldwide.
  • Some companies are pooling their efforts on AVs and electric vehicles, like GM and Honda. Ford and Volkswagen are expected to announce such an alliance next week.
  • But that future isn't getting any closer. Bold predictions by Tesla and others that cars would be able to drive themselves by now have evaporated in the face of technology challenges and market realities.
  • The timeframe for commercializing driverless cars is now said to be 2020–2021, but even that is unclear.
  • "It seems like we’re kind of stuck where we are," says Eric Paul Dennis, who's been tracking AV promises made — and broken — since 2013 as a senior transportation systems analyst at the Center for Automotive Research.

Investors don't like uncertainty, which helps explain why GM, Ford and Fiat Chrysler stocks are down substantially. And for the time being, Wall Street is likely to focus on troubles confronting their core business (Auto 1.0), not the sexy stuff (Auto 2.0).

"Autonomous vehicles will take time and investors may need to rein in their enthusiasm in 2019/2020."
— Adam Jonas, automotive analyst, Morgan Stanley

What’s happening: The annual Detroit auto show is looking to be the quietest since the depths of the 2009 recession, with fewer exhibitors and a shorter media preview.

  • European luxury carmakers Audi, BMW and Mercedes-Benz aren't even showing up, following Jaguar-Land Rover and Porsche, which pulled out years ago.
  • Audi and Mercedes had splashy car reveals last week in Las Vegas at CES, the tech show that has been siphoning attention away from Detroit for years.
  • That competition — and the lousy weather in January — prompted show organizers to move the event to June starting in 2020. That lame duck status may be contributing to this year's blah-ness.

Yes, but: There will still be some notable vehicle debuts in Detroit next week, including new sports cars like the Toyota Supra and Mustang GT500, and crossover SUVs including the new Cadillac XT6, Kia Telluride and Ford Explorer.

  • Future mobility tech is still relegated to the basement of Detroit's Cobo Center, where the Automobili-D conference and exhibition will be held for the third year.
  • 65 startups from 10 countries — 20% more than last year — will participate, showing tech on everything from AVs to smart cities.

Go deeper

Big Tech lobbies hard against looming antitrust bill

Illustration: Sarah Grillo/Axios

Big Tech CEOs, including Apple's Tim Cook and Google's Sundar Pichai, have been jawboning lawmakers as a Senate committee takes up a key antitrust bill Thursday.

Why it matters: The bill prompting this lobbying frenzy could upend how tech's giants do business, and tech's critics see this as a "now or never" moment for Congress to check the industry's power.

Biden stock market gets Trumped

Data: Yahoo Finance; Chart: Jared Whalen/Axios

U.S. stocks markets performed worse during the first year of Joe Biden's presidency than during the first year of Donald Trump's presidency.

By the numbers: The S&P 500 rose 19.3% between the market close before Biden's inauguration and yesterday's market close, compared to a 24.1% increase for Trump during the similar period.

First look: Biden's Year One turnover

Expand chart
Data: Brookings Institution; Chart: Thomas Oide/Axios

Low first-year turnover among President Biden's senior staff marks a "return to normalcy" and a sign of stability after the Trump years, says a new Brookings Institution report reviewed by Axios.

Driving the news: The departure of five out of 66 "A-Team" officials puts Biden's departure rate as the third lowest since Ronald Reagan's presidency, above only George H.W. Bush and son George W. Bush, the report found.