The tip of U.S. electrical automobile tax credit is predicted to pose long-term challenges for business leaders like Tesla. However the coverage’s looming expiration fueled a surge in gross sales within the newest quarter. Tesla delivered 497,099 automobiles within the July-September quarter, a report excessive and up 7 % from the identical quarter final yr. The robust quarter marks a turnaround for the carmaker, which has struggled with intensifying EV competitors and rising backlash over CEO Elon Musk’s political exercise. Its earlier quarterly outcomes confirmed deliveries of 384,122, a 13.5 % year-over-year drop and the corporate’s second consecutive decline.
The push in gross sales was pushed largely by the September 30 termination of federal EV tax credit, which provided as much as $7,500 per buy. The coverage change, enacted earlier this yr by President Donald Trump, spurred consumers to shut offers earlier than the deadline. Tesla wasn’t the one beneficiary—Cox Automotive tasks whole U.S. EV gross sales within the third quarter will attain 410,000, a 21 % enhance over final yr.
“This was an awesome bounce again quarter for [Tesla] to put the groundwork for deliveries transferring ahead,” stated Dan Ives, a Wedbush Securities analyst, in a consumer notice. Nonetheless, “EV demand is predicted to fall with the EV tax credit score expiration,” he warned. Tesla shares are down by greater than 4 % right now (Oct. 2).
Whether or not Tesla can maintain this momentum stays unsure. Musk has more and more positioned his firm round a future dominated by self-driving vehicles and robotics, rolling out autonomous vehicles in Austin this summer time. However for now, the majority of Tesla’s income continues to come back from EV gross sales, accounting for almost three-quarters of its $22.5 billion in income final quarter.
The corporate faces explicit headwinds in Europe, the place political backlash has weighed closely on gross sales. Within the first eight months of 2025, Tesla registrations in European Union international locations fell 43 % in comparison with the identical interval final yr, based on knowledge from the European Vehicle Producers’ Affiliation. August alone noticed a 36 % year-over-year drop. General, nevertheless, EV adoption within the EU continues to climb, with market share rising to fifteen.8 % from final yr’s 12.6 %.
In China, Tesla can be dropping floor. Shipments from its Shanghai Gigafactory reportedly fell 4 % year-over-year in August, marking declines in seven of the previous eight months. In an effort to fight native EV rivals, Tesla not too long ago launched its Mannequin Y L to the area.
One brilliant spot for the corporate is its power storage unit. The unit deployed 12.5 GWh of storage merchandise over the previous three months, up greater than 80 % from final yr. The enterprise, which incorporates Megapack and Powerwall battery programs, is gaining traction with utilities and firms increasing their A.I. infrastructure. Musk’s personal A.I. startup, xAI, was amongst its purchasers, contributing almost 2 % of Tesla’s $10 billion in power income final yr.
