The Detroit Retreat: Fifty-Three Billion in Write-DownsNarrow moat

The traditional American automakers have pulled back hard from the electric vehicle programmes they announced with such confidence, and the cost is now on the record. Ford took $19.5 billion of electric-vehicle charges; General Motors booked $7.6 billion for 2025 and said more were likely in 2026; and Stellantis wrote off €22.2 billion, about $26.2 billion¹. Together that is more than $53 billion². Nor is Ford's electric unit profitable yet: it expects Model e to lose $4.0 to $4.5 billion before interest and tax in 2026, an improvement on the $4.8 billion it lost in 2025³.

On the face of it this is unambiguously good for Tesla: the competitors who were supposed to erode its American position have pulled back from the field, and the domestic market is less contested than anyone expected two years ago.

The catch is that both events have the same cause. Detroit retreated in large part because emissions and fuel-economy standards were rolled back — and those same standards were what compelled rivals to buy regulatory credits from Tesla. One policy change simultaneously removed Tesla's American competition and shrank a revenue line that was almost pure profit, examined on the Major Clients pages. Tesla did not choose that trade.

Watch American electric vehicle share against total American vehicle sales. If the whole category stops growing because the policy that created it is gone, winning a larger share of it is a smaller prize than it looks.