$General Motors (GM.US)$ Ford Motor announced on Tuesday that its upcoming quarterly results will include $1.6 billion in charges related to electric vehicle investments — the latest in a series of negative disclosures from major automakers regarding electric vehicles.
$Ford Motor (F.US)$ Jim Farley, CEO of Ford Motor, said late last month that he expects demand for pure electric vehicles to drop by half following the end of the federal tax credit program. Prior to this, Stellantis, which owns brands such as Chrysler and Jeep, had already announced it would abandon its goal of producing only electric vehicles in Europe by 2030 and scaled back its aggressive targets in the U.S. market, particularly for the Chrysler brand.
The industry, already facing significant obstacles under the Trump administration, is now plunged into greater uncertainty as consumers purchasing electric vehicles can no longer benefit from a $7,500 tax credit. This incentive, part of President Trump’s landmark spending bill, expired at the end of September.
Amidst automakers lowering investor expectations, one name has notably been absent from the discussion — and that is Tesla. $Tesla (TSLA.US)$ 。
Despite a decline in market share due to increasing competition and weakening brand value, Elon Musk's Tesla remains the undisputed leader in electric vehicle sales in the U.S. market. According to data from Motor Intelligence, Tesla’s estimated share of the U.S. pure electric vehicle market stood at 43.1% as of the end of September, down from 49% at the end of last year.
Tesla, which is set to release its third-quarter earnings next week, is under intense scrutiny from Wall Street for its demand outlook following the elimination of the tax credit. Recently, Tesla introduced lower-priced 'streamlined' versions of its popular Model Y sport utility vehicle (SUV) and Model 3 sedan to offset some of the effective price increases resulting from the removal of the tax credit.
Steve Greenfield, General Partner at Automotive Ventures, stated that the retreat of traditional automakers from the electric vehicle sector could be good news for Tesla, potentially leading to a recovery in its market share. In an email, he noted that Tesla has "extremely strong brand loyalty."
Greenfield said, "It is highly likely that most Tesla owners will still choose this brand when purchasing their next new car."
However, significant challenges have emerged. He pointed out that due to consumers rushing to purchase electric vehicles before tax credits expired, demand has been "pulled forward," making it "highly likely that interest in pure electric vehicles will drop significantly" in the fourth quarter. Greenfield indicated that by the end of the year, Tesla may face a "double blow": a decline in pure electric vehicle sales and lower profit margins on vehicles already sold.
Tesla has not yet responded to requests for comment.
Investor sentiment has become more optimistic. Although Tesla's stock price fell by 36% in the first quarter of this year, it rebounded subsequently, with gains exceeding 7% year-to-date — a trend supported by Musk's purchase of approximately $1 billion worth of Tesla shares in September.
The sharp decline in Tesla's stock price at the beginning of this year was linked to a consumer backlash triggered by Musk: his inflammatory political remarks in the United States and Europe, his support for President Trump’s efforts to reduce the federal workforce, and his public endorsement of far-right groups, including Germany’s AfD, all sparked public discontent.
Shared Challenges
According to data from the London Stock Exchange Group (LSEG), analysts expect Tesla’s third-quarter earnings report, scheduled for release next Wednesday, to show a 3.5% year-over-year increase in revenue, reaching $26.1 billion. At the same time, analysts predict a decline in fourth-quarter revenue, with a potential 3.5% drop in full-year 2025 revenue — if this forecast holds true, it would mark Tesla’s first-ever annual revenue decline.
Earlier this month, Tesla reported a 7% year-over-year increase in third-quarter vehicle deliveries. Following two consecutive quarters of declines earlier this year, this figure marks a recovery in delivery volumes.
Mark Wakefield, Global Head of Automotive Markets at AlixPartners, stated in an interview, “It’s not as simple as ‘other companies retreat, and Tesla takes over the entire market.’”
Wakefield pointed out that even before the Republican spending bill was proposed in July, consumer demand for pure electric vehicles 'had already begun to stagnate somewhat.' Car buyers have been waiting for a 'breakthrough moment' — when electric vehicles can compete on price with hybrid or fuel-powered cars.
Wakefield added, 'This market needs novelty,' and the new low-priced versions of the Model Y and Model 3 'are far from being disruptive.'
The Trump administration has not made things easy for the industry.
Robby Orvis, Senior Director of Energy Innovation, a non-partisan climate policy think tank, said that asset write-downs by automakers were anticipated and entirely due to policy shifts — not merely the elimination of tax credits.
Orvis noted that the Trump administration also 'revoked California’s waiver to set its own vehicle standards, canceled billions of dollars in funding for electric vehicle charging stations and factory conversions to produce electric vehicles, and is moving to repeal vehicle emissions standards aimed at promoting the adoption of electric vehicles.'
He pointed out that these policies, along with tariffs, have cost U.S. automakers billions of dollars, meaning they are now unable to invest in new market segments.
Tesla has not been spared, and the impact is most evident in international markets.
Meanwhile, Musk continues to try to shift investors’ focus to other areas.
He insists that the company’s future hinges on autonomous taxis (robotaxis) and humanoid technologies.roboticsThese two major markets — Tesla has yet to achieve substantial breakthroughs in either field. Currently, while Tesla is testing its autonomous taxi service on a limited scale in some cities, it has fallen far behind Waymo, a subsidiary of Alphabet, the parent company of Google, which is rapidly scaling up its commercial operations.
In March this year, Musk stated that Tesla plans to produce 5,000 'Optimus' robots this year, but the successive departures of key personnel involved in the project have cast doubt on the feasibility of this plan.
In September this year, Musk posted on the social platform X, stating that 'approximately 80% of Tesla's value will come from the Optimus robot.' Last year, he also predicted that the Optimus robot would one day make Tesla a company valued at $25 trillion — a scale equivalent to more than half of the total market capitalization of S&P 500 companies at the time he made the statement.
This narrative is compelling enough to attract some long-term Tesla investors and loyal fans of Musk. However, for now, Tesla's business still relies heavily on electric vehicle sales. In the U.S. market, although Tesla's market share may rise, at least in the short term, the overall 'pie' of the electric vehicle market appears to be shrinking.
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