Tesla, Ford, General Motors, and Stellantis: Why Auto Stocks Just Had A Bad Tuesday

The S&P 500's 7-day winning streak ran out of gas on Tuesday, with the index declining 0.38% to 6,714.59. Bad news from U.S. automakers Ford  (F) , Tesla  (TSLA) , and General Motors  (GM) are partially to blame for the tumble.

As covered in our daily live blog, Stock Market Today, it was a tumultuous Tuesday for the four firms, which saw their stocks fall 6.1%, 4.5%, and 1.6% respectively. The bad news comes as the firms face difficulty from new Trump tariffs, still-high interest rates, and weaker consumer spending, 

However, there's no singular explanation for the three firms' declines, even as the bad news spread about the industry. We explore:

Ford's Supplier Fumble

Earlier today, the WSJ reported that a "devastating fire" at a Novelis New York aluminum plant could mean a shortage of sheet aluminum for domestic automakers for months to come.

That's especially bad news for the plant's biggest customer: Ford Motor  (F) , which relies on sheet aluminum to build its best-selling F-150 pickup. The WSJ reports that the plant might remain offline until "early next year."

The issue is considered so bad, in fact, that Ford might be made to address it in its shareholder call later this month. On the news, the company's stock fell over 6.1% on Tuesday.

Tesla's Price Cut Tumble

A few days ago, Tesla  (TSLA)  teased a big announcement for Tuesday, stirring hopes that the automaker might finally be rolling out a new, low-cost vehicle to join its lineup.

Instead, it simply rolled out cheaper, scaled-back 2026 models of its Model 3 and Model Y sedans. Tesla fell 4.45% on the news.

The new "standard" models boast rear-wheel drive, less range, and fewer features than the existing "premium" fleet options. However, they come with a more approachable price tag: a Model Y starting at $39,990 and a Model 3 starting at $36,990.

Those prices might help the company navigate the end of the federal electric vehicle (EV) tax credit, but it remains to see how much it can do, particularly as consumers demonstrate reluctance to big-dollar purchases. The bad news weighed on competing electric car companies like Polestar PSNYW (-5.28%), Li Auto  (LI) (-2.41%), Rivian  (RIVN)  (-1.78%).

Plus, there's also ongoing political controversies with CEO Elon Musk, which have seen one-time fans of the brand turn away; buying intent has also collapsed, particularly overseas. 

General Motors and Stellantis Loses Funding

Capping off a bad day for automakers, General Motors  (GM)  and Stellantis  (STLA)  got some bad news from the government: they want their $1.1 billion back.

Just a few days after Stellantis said it would plan to spend over $10 billion in the U.S., Reuters reported that the U.S. Department of Energy was reportedly looking to revoke $1.1 billion in "retooling grants" to the two firms as part of a government shutdown cost-cutting measure.

The cost-cutting is part of more than $12 billion in projects expected to be cancelled. On the news, GM tumbled 1.6%, while Stellantis clung to a 0.56% gain.

This article was part of our daily Stock Market Today live blog. To read Tuesday's entire live blog, check it out here:

Related: Stock Market Today: S&P 500's 7 Day Winning Streak Snapped By Oracle, Tesla News