Tesla reports earnings next week while competitors retreat from electric vehicles, positioning Elon Musk's company to potentially capture market share as GM takes a $1.6 billion charge and Ford CEO predicts demand will be slashed in half following the end of federal tax credits under Trump administration policies.
Tesla is about to face one of its most pivotal earnings calls in years as the EV landscape shifts dramatically around it. While General Motors just announced a crushing $1.6 billion writedown on electric vehicle investments and Ford CEO Jim Farley warns that EV demand could get slashed in half, Musk's company finds itself in an unexpectedly advantageous position.
The latest retreat came Tuesday when GM revealed the massive charge in its upcoming quarterly results, joining a string of troubling disclosures from traditional automakers. Ford's Farley made his grim prediction last month after consumers lost access to $7,500 federal tax credits that expired in September under President Trump's spending bill. Stellantis, parent of Chrysler and Jeep brands, has already scrapped its 2030 target of producing only electric vehicles in Europe.
"The retreat of legacy automakers from the segment could be good news for Tesla as its market share may start to rebound," Steve Greenfield, general partner at Automotive Ventures, told CNBC. The company has "very strong brand loyalty," he noted, with most Tesla buyers likely to stick with the brand for their next purchase.
That loyalty may prove crucial as Tesla faces its own headwinds. The company's share of the U.S. all-electric market dropped to 43.1% at the end of September from 49% last year, according to Motor Intelligence data. Tesla recently unveiled stripped-down, lower-cost variants of its Model Y SUV and Model 3 sedans to offset the effective price increases from losing federal incentives.
Wall Street will dissect every word when Tesla reports third-quarter results next Wednesday. Analysts expect revenue growth of just 3.5% to $26.1 billion, with projections showing a revenue decline in Q4 and a 3.5% drop for all of 2025 - which would mark the company's first full-year decline on record.
The stock has rallied after a brutal first quarter, rising more than 7% for the year aided by Musk's $1 billion stock purchase in September. That early-year slump was tied to consumer backlash over Musk's political rhetoric, his work slashing the federal workforce under Trump, and endorsements of far-right groups including Germany's AfD party.
