Tesla demand attracts attention after President Trump induces GM and Ford to withdraw from EVs

general motors Tuesday’s announcement that its next quarterly results will include a $1.6 billion charge from electric vehicle investments is the latest in a series of troubling EV-related disclosures by major automakers.

ford Chief Executive Officer Jim Farley said late last month that demand for all-electric vehicles was expected to be cut in half after a federal tax credit program ended. His prediction comes after Stellantis, the parent company of auto brands like Chrysler and Jeep, announced it was rescinding its goal of producing only electric vehicles in Europe by 2030 and ambitious targets for the United States, particularly Chrysler.

The industry, which was already facing hurdles imposed by the Trump administration, now faces significant uncertainty as consumers no longer have access to the $7,500 tax credit for EV purchases. The incentives expired at the end of September as part of President Trump’s signature spending bill.

As automakers reset investor expectations, there’s one name that hasn’t gotten much attention from the conversation. tesla.

Elon Musk’s company is by far the largest EV seller in the United States, but its market share is declining as competition intensifies and brand value erodes. 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 to receive as credit becomes unavailable. Tesla recently introduced stripped-down, lower-priced models of its popular Model Y SUV and Model 3 sedan to offset some of the de facto price increases associated with the loss of incentives.

Steve Greenfield, general partner at investment firm Automotive Ventures, said the exit of traditional automakers from the field could be good news for Tesla, as Tesla’s market share could start to recover. He said in an email that the company has “very strong brand loyalty.”

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

But significant challenges stand in the way. He said interest in battery electric vehicles is “very likely to shrink dramatically” in the fourth quarter due to “demand pre-emption” as consumers rush to buy EVs before their credits expire. Greenfield said Tesla is likely to face a “double whammy” toward the end of the year: lower BEV sales and lower profit margins on the cars it sells.

Tesla did not respond to a request for comment.

Investors are becoming more bullish. After falling 36% in the first quarter, the stock has rebounded, thanks in part to Musk’s September purchase of about $1 billion worth of Tesla stock, and is up more than 7% since the beginning of the year.

The year’s rough start was linked to a backlash among consumers in the U.S. and Europe over Musk’s inflammatory political rhetoric, President Trump’s efforts to cut federal workers, and support for far-right groups, including Germany’s AfD party.

Analysts expect the company’s third-quarter earnings, scheduled for next Wednesday, to result in sales of $26.1 billion, up 3.5% from a year ago, according to LSEG. Analysts expect sales to decline in the fourth quarter and fall 3.5% in 2025, the first full-year decline in history.

Tesla reported earlier this month that car deliveries rose 7% in the third quarter compared to the same period last year. This marked a recovery from two consecutive quarters of decline since the beginning of the year.

“This isn’t just a setback for other companies, it’s Tesla running away with the market,” Mark Wakefield, head of global auto markets at Alix Partners, said in an interview.

Wakefield said that even before Republicans introduced their spending bill in July, consumer demand for all-electric vehicles was “already flattening out a little bit.” Car buyers were looking for a “breakthrough moment” when EVs would become cost competitive with hybrid and gasoline-powered cars.

“There needs to be a sense of newness in this market,” Wakefield said, adding that the new low-cost Model Y and Model 3 options aren’t exactly “mind-blowing.”

The Trump administration is not making life easy.

Robbie Orbis, senior director at the nonpartisan climate policy think tank Energy Innovation, told CNBC that writedowns for automakers are expected and are driven solely by policy changes beyond tax credits.

Orvis said President Trump is also “in the process of rescinding California’s exemption to set its own vehicle standards, canceling billions of dollars in funding for EV chargers and retooling auto factories to produce EVs, and rescinding vehicle tailpipe standards that encourage EV adoption.”

These policies and tariffs have already cost U.S. automakers billions of dollars in losses, which means automakers are not in a position to invest in new market segments, Orbis said.

Tesla is also feeling the pain, and nowhere is it more evident than in international markets.

“Chinese automakers are rapidly displacing U.S. automakers in overseas markets because they can offer cheaper, higher-quality new cars, especially in markets where demand for electric vehicles is growing significantly,” Orbis said.

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

He argues that the company’s future lies in robotaxis and humanoid robotics, two markets that Tesla has yet to meaningfully tap into. Tesla is testing robotaxi-branded service in limited capacity in some cities, but with significant delays of the alphabet Waymo is rapidly expanding its commercial business.

Musk said in March that Tesla aims to build 5,000 Optimus robots this year, but key departures from the group have cast doubt on that plan.

In September, Musk wrote in X magazine that “about 80% of Tesla’s value will be in Optimus.” Last year, he predicted that Optimus Robots would one day turn Tesla into a $25 trillion company, more than half the entire value of the S&P 500 at the time of his comments.

That’s a compelling enough story for longtime Tesla bulls and Musk fans. But for now, the company still relies on EV sales to drive its business. And while Tesla’s market share may be trending upward in the U.S., the overall pie appears to be shrinking — at least in the short term.

—CNBC’s Mike Wayland contributed to this report

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