Tesla demand in focus after Trump leads GM, Ford to retreat from EV

General Motors’ The announcement Tuesday that its next quarterly results will include a $1.6 billion charge from electric vehicle investments was the latest in a series of troubling EV-related announcements from major automakers.

ford CEO Jim Farley said late last month that he expected demand for all-electric vehicles to drop by half after the federal tax credit program expires. His prediction came after Stellantis, the parent company of automobile brands including Chrysler and Jeep, made a statement to this effect. scrapping The goal of producing only electric vehicles in Europe by 2030 has fallen short of ambitious targets for the US and especially Chrysler.

Already facing hurdles imposed by the Trump administration, the industry faces great uncertainty at a time when consumers will no longer be eligible for a $7,500 tax credit to purchase electric vehicles. The stimulus expired at the end of September under President Trump’s signature spending bill.

While automakers are resetting investor expectations, one name is conspicuously absent from the talks: Tesla’s.

Elon Musk’s company is by far the largest seller of electric vehicles in the United States, although its market share has decreased due to increased competition and decreased brand value. Tesla’s share of the overall U.S. electric market was estimated at 43.1% at the end of September, according to data provided to CNBC from Motor Intelligence; This is down from 49% at the end of last year.

Tesla is scheduled to report third-quarter results next week, and Wall Street is eager to hear what kind of demand the company expects with loans no longer available. Tesla recently introduced stripped-down, lower-cost versions of its popular Model Y SUV and Model 3 sedans, offsetting some of the effective price increases that came with the loss of incentives.

Steve Greenfield, general partner at investment firm Automotive Ventures, said the withdrawal of legacy automakers from the segment could be good news for Tesla as its market share could begin to recover. The company has “very strong brand loyalty,” he said in an email.

“Most Tesla buyers will probably stay with the brand when buying their next new car,” Greenfield said.

However, significant difficulties arise. He said interest in battery electric vehicles was “likely to decline significantly” in the fourth quarter due to a “downturn in demand” as consumers flocked to buy electric vehicles before the credit expired. Towards the end of the year, Greenfield said Tesla will likely face a “double whammy” due to declining BEV sales and lower margins on the cars they sell.

Tesla did not respond to a request for comment.

Investors have become more optimistic. After a 36% decline in the first quarter, the stock rebounded and is now up more than 7% for the year. Musk bought approximately $1 billion worth of Tesla shares in September.

The grim start to the year was linked to a consumer backlash in the United States and Europe in response to Musk’s incendiary political rhetoric, President Trump’s push to cut the federal workforce and his support of far-right groups, including Germany’s AfD party.

Analysts expect the company to report 3.5% year-over-year revenue growth to $26.1 billion in third-quarter earnings scheduled for next Wednesday, according to LSEG. Analysts predict a revenue decline in the fourth quarter and a 3.5% decline for all of 2025; This would be the first drop on record all year.

Earlier this month, Tesla reports 7% year-over-year increase in quarterly vehicle sales deliveries for the third quarter. This marked a turnaround after two consecutive quarters of decline to start the year.

“It’s not just everyone pulling back and Tesla is running out of the market,” Mark Wakefield, global automotive market leader at Alix Partners, said in an interview.

Even before July’s Republican spending bill, consumer demand for all-electric vehicles was “already stagnating a little bit,” Wakefield said. Auto buyers are looking for a “breakthrough moment” when EVs will become cost-competitive with hybrid or gas-powered models.

Wakefield added that “this market needs a sense of innovation” and that the new, lower-priced Model Y and Model 3 options aren’t exactly “earth-shattering.”

The Trump administration is not making life easy.

Robbie Orvis, senior director at Energy Innovation, a nonpartisan climate policy think tank, told CNBC that automakers’ losses were expected and driven entirely by policy changes beyond tax credits.

The Trump White House also “revoked California’s exemption from setting its own vehicle standards, canceled billions of dollars in funding for electric vehicle chargers and retooling auto factories to produce electric vehicles, and is in the process of rolling back vehicle tailpipe standards that would encourage the adoption of electric vehicles,” Orvis said.

Orvis said these policies, along with tariffs, have already caused billions of dollars in losses for U.S. automakers, meaning they are not in a position to invest in new market segments.

Tesla also gets its share of this pain and it manifests itself most severely in international markets.

“Chinese automakers are rapidly displacing U.S. automakers in foreign markets because they can offer cheaper, higher-quality new cars, especially EVs, in markets where there is large and growing demand for these cars,” Orvis said.

Meanwhile, Musk continues to focus investors’ attention elsewhere.

He insists that the company’s future depends on robotaxi and humanoid robotics, two markets that Tesla has yet to meaningfully crack. Tesla is testing its Robotaxi-branded service at limited capacity in some cities, but it’s falling far behind alphabet Waymo is rapidly expanding its business operations.

Musk said in March that Tesla aimed to make 5,000 Optimus robots this year, but significant deviations from the group had thrown that plan into doubt.

In September, Musk wrote to X that “~80% of Tesla’s value will be Optimus.” Last year, Optimus predicted that his robots would one day turn Tesla into a $25 trillion company; this was equal to more than half the entire value of the S&P 500 at the time of commenting.

It’s an intriguing enough story for longtime Tesla enthusiasts and Musk fans. But right now, the company is still relying on electric vehicle sales to sustain its business. While Tesla’s market share is poised to grow in the US, the overall pie appears to be shrinking – at least in the near term.

— CNBC’s Mike Wayland contributed to this report

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