The American auto industry has rarely felt as split-screen as it does right now. General Motors is being rewarded for a disciplined, politically savvy transformation, even as Tesla shutters legacy lines to chase robots and autonomy and Rivian absorbs another punishing hit in the market. The gap between Wall Street’s praise for GM and its skepticism toward Tesla and Rivian says as much about investor patience as it does about electric vehicles themselves.
I see three intertwined stories here: an old-line giant that has finally convinced markets it can grow through upheaval, a onetime disruptor betting its future on humanoid machines, and a younger EV hopeful whose stock slide is turning into a referendum on whether pure-play electric startups can survive the next phase of the transition.
GM’s “shocking praise” moment
General Motors is enjoying the kind of reception that would have sounded fanciful a few years ago. After a strong set of 2025 results, The Detroit automaker’s stock surged to record highs on a Tuesday session, helped by a new $6 billion stock buyback authorization that signaled confidence in its cash generation under President Donald Trump’s policy mix. Another report noted that General Motors stock had already been atop a roughly 76% rally heading into that same Tuesday, with the move into a fresh “buy zone” driven by a clean beat on fourth quarter profit expectations and detailed 2026 guidance that impressed investors focused on earnings quality and capital returns General Motors.
Underneath that market reaction is a company trying to reinvent itself without losing sight of its core. As of early 2026, Introduction analysis describes General Motors Company, listed on the NYSE, as standing at a defining crossroads in its 118-year history, a reminder that this is not a startup learning on the fly. Once viewed as a lumbering industrial, GM is now pitching itself as a tech-aware manufacturer that can still squeeze profits out of trucks and SUVs while investing in software, batteries and autonomous platforms. That balancing act is what has drawn what I would call “shocking praise” from a market that, not long ago, reserved its admiration almost exclusively for Tesla.
Profit, tariffs and the politics of being the “safe” auto bet
GM’s current halo is not just about beating estimates, it is about convincing investors it can navigate a choppy policy environment. After the company raised its 2026 profit outlook, executives emphasized that they still see upside in a “resilient” U.S. market even as Tariffs are expected to again cost multiple billions of dollars. That kind of guidance, framed explicitly around trade frictions and regulatory uncertainty, plays well in a market that has been burned by overly optimistic EV timelines. Another breakdown of the quarter highlighted how GM’s adjusted EPS beat and upbeat 2026 guidance came despite a large special charge in the fourth quarter, with management still projecting robust margins and return on capital, a combination that helped the stock extend its strong run after a roughly 50% return in 2025 EPS.
From my vantage point, what investors are really applauding is GM’s ability to align its strategy with the political and economic realities of the Trump era. One detailed look at the company’s positioning underlined how Tuesday’s rally was fueled not only by earnings but by the perception that GM is “nailing” the balance between profit and politics, leaning into domestic production and jobs messaging that resonates in Washington while still pushing electrification. A separate investor-focused piece framed the stock’s recent surge as a new buying opportunity, noting that for 2026 GM expects profit growth and higher free cash flow compared with 2025, with the company planning to lift its dividend and expand buybacks as it moves from $2.7 billion in 2025 toward a higher target in 2026 For 2026. In a sector where many EV names are asking shareholders for patience and fresh capital, GM is offering cash back and a story of resilience.
Tesla shuts lines and chases robots
While GM basks in approval, Tesla is ripping up parts of its original playbook. The company has confirmed that it will cease production of the Model S sedan and Model X SUV by the end of the second quarter of 2026, a shift that CEO Elon Musk framed as necessary to free capacity and capital for a new, robot-focused future Key Points. Another account of the decision explained that Tesla plans to end production of its Model S and Model X vehicles in the spring and convert the freed-up factory space in Fremont to build Optimus humanoid robots and other autonomous products like robotaxis and humanoid robots, effectively turning a flagship car plant into a robotics hub Tesla plans. For a brand that once marketed itself around the “S3XY” lineup, this is a symbolic break with its own mythology.
The move is part of a broader pivot that Musk has been telegraphing. In a recent earnings call, he signaled that Tesla would no longer be a “S3XY” automaker, with commentary that the company would focus on the Model 3, Model Y and Cybertruck while winding down the Model S and Model X, a shift that one analysis summarized with the line that, very soon, Tesla will no longer be a S3XY automaker Very. Another report noted that Elon Musk announced on a Wednesday that Tesla will halt production of the Model X and Model S, two of the company’s most popular models, to focus on an autonomous future in 2026, underscoring how central self-driving and AI-powered products have become to his narrative for the company’s next decade Elon Musk.
Wall Street cools on Tesla’s stock story
Investors, however, are no longer giving Tesla a free pass on execution risk. One influential auto analyst at Morgan Stanley, Adam Jonas’s colleague Percoco, recently cut Tesla to Equal Weight from Overweight, arguing that while the company remains a leader in EVs, manufacturing and competitive pressures are raising questions around its long-term profitability. Another note from the same bank downgraded Rivian, Lucid and Tesla together, with Rivian, Lucid and Tesla all described as facing a tougher EV market, with Morgan Stanley citing slowing demand growth and intensifying price competition. That shift in tone matters because it signals that even Tesla is now being grouped with the broader EV cohort rather than treated as a category of one.
The company’s own financials are reinforcing that scrutiny. One summary of its latest earnings noted that Tesla’s revenue last quarter came in below some expectations as it announced the end of Model S and Model X production, with Musk using the call to emphasize the pivot toward autonomous technology and robotics instead of near-term volume growth Tesla ends. Another detailed piece on the Fremont plant explained that Tesla will kill off the Model S and Model X vehicles and convert the facility to build robots, with staff writer Aidin Vaziri describing how the company plans to support existing owners “as long as people have the vehicles” while retooling the site for its Optimus program By Aidin Vaziri. I read those moves as Tesla asking shareholders to buy into a second reinvention, one that may take years to prove out.
Rivian’s stock nosedive and the EV startup squeeze
If Tesla is being re-rated, Rivian is being punished. A recent delivery update showed that Rivian’s fourth quarter deliveries decreased by 31% year over year, a drop that immediately hit sentiment and led to a sharp fall in the share price, with one analysis bluntly headlined Rivian Stock Falls in Deliveries and stressing that 2026 is what really matters as the company prepares new models on its R2 platform. Another market recap noted that after the delivery report hit, Rivian’s shares slid about 3.5%, capturing the immediate Market Reaction and Rivian Stock Performance Investors’ concerns about whether the company can scale efficiently in the face of tariff-related cost pressures. For a business still burning cash, that kind of volume volatility is exactly what investors fear.
More from Morning Overview