General Motors announced on Tuesday that its upcoming quarterly results will reflect a $1.6 billion expenditure tied to electric vehicle investments, marking the latest in a series of negative disclosures regarding EVs from major automakers.

Ford CEO Jim Farley indicated last month that he expects demand for pure electric vehicles to drop by 50% following the expiration of federal tax credit programs. Prior to this, Stellantis, which owns brands such as Chrysler and Jeep, announced it would abandon its goal of producing only electric vehicles in Europe by 2030, and also downgraded its aggressive targets for the U.S. market, especially for the Chrysler brand.

The industry, already facing significant challenges from the Trump administration, now confronts further uncertainty as consumers can no longer benefit from the $7,500 tax credit when purchasing electric vehicles. This incentive policy, part of Trump’s hallmark expenditure legislation, expired at the end of September.

Amid traditional automakers scaling back their investment expectations, one name notably absent from this narrative is Tesla. Although Tesla's market share has diminished due to intensifying competition and declining brand value, it remains the unrivaled leader in electric vehicle sales in the U.S. According to data from Motor Intelligence, Tesla's estimated market share stood at 43.1% in the U.S. EV market at the end of September, down from 49% at last year's end.

Tesla is set to release its third-quarter financial results next week, and Wall Street eagerly anticipates insights into its demand forecasts following the loss of tax incentives. Recently, the company introduced lower-priced "standard" variants of its popular Model Y SUV and Model 3 sedan to mitigate some of the actual price hikes caused by the removal of tax credits.

Steve Greenfield, managing partner at Automotive Ventures, suggested that the retreat of traditional automakers from the electric vehicle sector could bode well for Tesla, potentially allowing its market share to rebound. He remarked in an email that Tesla has "extremely strong brand loyalty."

Greenfield stated, "It is likely that the majority of Tesla owners will still choose this brand when purchasing their next new car."

However, significant challenges are already apparent. He pointed out that consumer demand for electric vehicles was "pulled forward" as buyers rushed to purchase before the expiration of tax credits, suggesting that interest in pure electric vehicles may "dramatically decline" in the fourth quarter. Greenfield warned that Tesla could face a "double whammy" by year-end: declining pure electric vehicle sales and reduced profit margins on cars already sold.

Tesla has not yet responded to requests for comment.

Investor sentiment has shifted to a more optimistic stance. Despite Tesla's stock price dropping 36% in the first quarter of this year, it rebounded, achieving over 7% growth year-to-date, bolstered by Musk's acquisition of around $1 billion in Tesla stock in September.

The sharp decline in Tesla's stock price earlier this year was connected to consumer backlash against Musk's provocative political statements in the U.S. and Europe, his support for Trump's federal workforce cuts, as well as his public backing of far-right groups, including Germany's Alternative for Germany (AfD), which sparked public discontent.

Joint Challenges Ahead

According to data from the London Stock Exchange Group (LSEG), analysts anticipate that Tesla’s third-quarter earnings report, scheduled for next Wednesday, will show a 3.5% year-over-year revenue increase to $26.1 billion. However, analysts predict a revenue decline in the fourth quarter, with annual revenues for 2025 potentially decreasing by 3.5%. If accurate, this would mark the first annual revenue decline in Tesla's history.

Earlier this month, Tesla reported a 7% increase in vehicle deliveries year-over-year for the third quarter, marking a recovery following consecutive declines in the first two quarters of the year.

Mark Wakefield, the global automotive market leader at AlixPartners, stated in an interview, "It's not as simple as saying that 'if all the other companies retreat, Tesla can take the whole market.'"

Wakefield noted that consumer demand for pure electric vehicles had already been stagnating even before the spending bill was proposed by Republicans in July. Buyers have been waiting for a "breakthrough moment" when electric vehicles can competitively price against hybrids or gasoline vehicles.

He added, "The market needs something fresh," and the new low-cost variants of the Model Y and Model 3 "aren't exactly disruptive."

The Trump administration has not made the situation any easier for the industry.

Robbie Orvis, a senior director at the nonpartisan climate policy think tank Energy Innovation, stated that automakers' asset write-downs had been anticipated and stemmed entirely from policy changes, rather than simply the elimination of tax credits.

Orvis noted that the Trump administration also "revoked California's waiver to set its own auto standards, canceled billions meant for EV charging stations and transforming auto plants to produce electric vehicles, and is moving to eliminate emissions standards aimed at promoting EV adoption."

He pointed out that these policies, combined with tariffs, have cost U.S. automakers billions, leaving them unable to invest in new market sectors.

Tesla has not escaped these effects, which are particularly evident in international markets.

Meanwhile, Musk continues to try to redirect investor focus to other sectors. He insists that the company's future lies in the markets of robotaxis and humanoid robots, both of which Tesla has yet to achieve significant breakthroughs in. While Tesla is testing its robotaxi service on a limited scale in some cities, it is lagging far behind Waymo, the self-driving vehicle unit of Google's parent company Alphabet, which is quickly expanding its commercialization efforts.

In March, Musk stated that Tesla plans to produce 5,000 Optimus robots this year, but the departure of key personnel from the project has raised questions about the feasibility of this target.

In September, Musk tweeted that "about 80% of Tesla's value will come from the Optimus robot." Last year, he predicted that the Optimus robot would eventually make Tesla a $25 trillion company— a value that at the time represented more than half of the total market cap of S&P 500 component companies.

This narrative may be attractive to some long-term Tesla optimists and loyal investors. However, for the time being, Tesla’s business heavily relies on electric vehicle sales. Although Tesla's market share may see potential growth in the U.S. market, the entire electric vehicle "pie" appears to be shrinking, at least in the short term.