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

GM Tuesday’s announcement that its next quarterly results will include a $1.6 billion fees Its investment in electric vehicles is the latest in a series of troubling disclosures related to electric vehicles from major automakers.

Ford CEO Jim Farley He said Late last month, he predicted demand for all-electric vehicles would fall in half after the federal tax credit program expires. His predictions came after Stellantis, the parent company of auto brands including Chrysler and Jeep, announced that… cancellation Its goal is to produce nothing but electric cars in Europe by 2030, falling short of ambitious targets for the United States, particularly for Chrysler.

The industry, which was already facing hurdles imposed by the Trump administration, faces a heavy dose of uncertainty now that consumers can no longer Take advantage of $7,500 tax credits for purchasing electric vehicles. The incentives expired at the end of September as part of President Trump Sign spending bill.

As automakers reset investor expectations, one name has been noticeably absent from the conversation: Tesla.

Elon Musk The company is by far the largest seller of electric vehicles in the United States, although its market share has declined as competition increases and its sales grow. Brand value He refused. Tesla’s share of the U.S. all-electric vehicle market was estimated at 43.1% at the end of September, down from 49% at the end of last year, according to data provided to CNBC by Motor Intelligence.

Tesla is scheduled to report third-quarter results next week, and Wall Street will be eager to hear what kind of demand the company expects with credits not available. Tesla It was recently revealed Simple, lower-cost variants of the popular Model Y SUV and Model 3 sedans, offsetting some of the effective price increases that come with the loss of incentives.

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

“Most Tesla buyers will likely continue to stick with the brand as they purchase their next new vehicle,” Greenfield said.

However, significant challenges loom on the horizon. He said interest in battery electric vehicles “is very likely to shrink significantly” in the fourth quarter, due to “advancing demand,” as consumers rush to buy electric vehicles before credit expires. Greenfield said that by the end of the year, Tesla will likely face a “double whammy,” from declining sales of battery electric vehicles and lower profit margins on the cars it sells.

Tesla did not respond to a request for comment.

Investors are becoming more optimistic. After falling 36% in the first quarter, the stock has rallied and is now up more than 7% on the year, supported by financial factors. Buy musk About $1 billion worth of Tesla stock in September.

The year’s brutal start has been linked to a consumer backlash in the US and Europe in response to Musk’s incendiary political rhetoric, his work with President Trump on federal workforce cuts, and his endorsement of far-right groups including the AfD.

Earlier this month, Tesla Recorded a 7% year-on-year increase in quarterly compounds Delivery For the third quarter. This represents a turnaround after two consecutive quarterly declines at the beginning of the year.

“It’s not just that if everyone else backs out, Tesla will be able to escape the market,” Mark Wakefield, global auto market leader at Alex Partners, said in an interview.

Even before the Republican spending bill in July, consumer demand for all-electric vehicles was “already somewhat flat,” Wakefield said. Car buyers have been looking for a “breakthrough moment” where electric cars become cost-competitive with hybrid or gas-powered models.

Wakefield added that “this market needs a sense of modernity,” 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, a senior director at Energy Innovation, a nonpartisan climate policy think tank, told CNBC that the automakers’ stock writedowns were expected and stem entirely from policy changes beyond just tax breaks.

The Trump White House “also revoked a waiver granted to California to set its own vehicle standards, eliminated billions in funding for EV chargers and auto factories to retool to build EVs, and is in the process of rolling back vehicle exhaust standards that would encourage EV adoption,” Orvis said.

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

Tesla is experiencing its share of this pain, and it is showing up more acutely in international markets.

“Chinese automakers are rapidly displacing American automakers in overseas markets because they are able to offer cheaper and higher-quality new vehicles, especially electric vehicles, in markets where there is significant and growing demand for these vehicles,” Orvis said.

Meanwhile, Musk continues to try to focus investors’ attention elsewhere.

He insists that the company’s future depends on robotics and humanoid robots, two markets that Tesla has not yet been able to meaningfully penetrate. Tesla is testing its Robotaxi-branded service in a limited capacity in some cities, but it’s lagging far behind alphabet Waymo, which is rapidly expanding its business operations.

Musk said in March that Tesla aims to make 5,000 of its Optimus robots this year, but a major departure from the group has cast doubt on that plan.

In September, Musk wrote on X that “about 80% of Tesla’s value will be from Optimus.” Last year, it is anticipation Optimus robots will one day turn Tesla into a company worth $25 trillion, which is equivalent to more than half of the company’s total value. Standard & Poor’s 500 At the time of his comment.

It’s a compelling enough story for some Tesla bulls and longtime Musk fans. But for now, the company still relies on electric vehicle sales to boost its business. And in the US, while Tesla’s market share may be about to rise, 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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