Tesla’s third-quarter deliveries trounced Wall Street estimates on Thursday after several quarters of weak performance, powered by an unusual sales boost from US electric vehicle buyers rushing to lock in popular tax credits before they expire at the end of September.
Tesla said it delivered 497,099 vehicles in the third quarter, up 7.4% from 462,890 a year earlier. It also delivered 481,166 units of its Model 3 compact sedan and Model Y crossover in the September quarter, well above Wall Street expectations. The carmaker is set to report quarterly results on 22 October.
Full-year 2025 deliveries are projected to be about 1.61m, roughly 10% below 2024, according to investment research firm Visible Alpha. Tesla will need to deliver 389,498 vehicles in the December quarter to meet that projection.
Elon Musk’s carmaker had frequently talked up the expiry, using it alongside discounts and financing deals to spur sales and leases of its electric vehicles. However, worries over cooling sales in the upcoming quarters due to the withdrawal of the $7,500 federal tax credit weighed on the company’s shares, which fell in morning trading.
“While the third quarter was strong, we expect fourth quarter sales will see a decline, consistent with the first half of the year, largely due to the US tax credit expiration,” said Seth Goldstein, senior equity analyst at Morningstar.
Tesla had reported declining delivery numbers in recent quarters as it failed to refresh an ageing lineup of vehicles and suffered global backlash against Musk’s heavy involvement in politics. The company’s newest model, the Cybertruck, has not succeeded in significantly boosting sales.
Europe remained a weak spot as rivals aggressively promoted plug-in hybrids, while Chinese EV brands started gaining ground in the extremely competitive market. Tesla’s European sales, including the UK, fell 22.5% from a year earlier in August, cutting its market share to 1.5%, according to data from the region’s Automobile Manufacturers’ Association.
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In China, Tesla began delivering the long-wheelbase, six-seat Model Y L in September, a family-focused variant that was expected to spur demand in the world’s largest EV market. Tesla has delayed rolling out the lower-cost Model Y in the US, pushing the timing by several months.
Analysts said Tesla’s ability to cushion a post-credit slowdown will depend heavily on its push into lower-priced models.
“The challenge now is dealing with the potential slowdown that follows, and that’s where a new, more affordable model becomes crucial to keeping momentum going,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown, who personally owns Tesla shares.
The stripped-down version is designed to be roughly 20% cheaper to produce than the refreshed Model Y and could scale to about 250,000 units a year in the US by 2026.
Tesla holdings account for the bulk of Musk’s wealth and a recent surge in the company’s stock price helped his net worth breach the $500bn mark on Wednesday, bolstering his position as the world’s richest person.
As of last close, shares of the company were up nearly 14% this year.
The company’s board has proposed a shareholder vote on a new CEO award that could grant Musk about 12% of the company, worth up to $1tn, if performance and valuation targets are met.
The billionaire has tried to position Tesla more as a technology company by focusing on AI-based self-driving systems: robotaxis and humanoid robots.
