Tesla’s sales had stagnated for the past 18 months, but the company just achieved its highest-ever quarterly delivery numbers, largely because customers hurried to benefit from the $7,500 federal EV tax incentive before it expired.
On Thursday, Tesla revealed it delivered 497,099 vehicles in the last quarter. This marks a significant 29% rise compared to the previous quarter, about 7% more than the same period last year, and sets a new record for the company’s quarterly deliveries.
Other carmakers in the United States also experienced similar surges before the tax credit ended. The rush to secure the incentive was so intense that Cox Automotive predicted EVs would account for 10% of all U.S. vehicle sales for the quarter, setting a new benchmark.
This spike in sales arrived at a pivotal moment for Tesla. Prior to the third quarter increase, the company was on pace for its global deliveries to decline for a second consecutive year, which has eroded Tesla’s once industry-leading profit margins.
Several factors contributed to this situation. Aside from the Cybertruck, which has underperformed and been outsold by the GMC Hummer EV, Tesla hasn’t launched a genuinely new model in years. Additionally, CEO Elon Musk damaged the company’s reputation by spending hundreds of millions to support Donald Trump’s election, then quickly joining the new administration and overseeing sweeping, sometimes chaotic, cuts to federal agencies and programs through his Department of Government Efficiency.
Tesla could still surpass last year’s delivery numbers, but doing so would require an unprecedented fourth quarter. Even if achieved, this would fall short of the 50% annual growth rate the company once touted.
This may not be surprising, as Musk appears less interested in car sales. The company is now trying to shift public focus to technologies like self-driving and humanoid robots, even proposing a $1 trillion compensation package for Musk, mostly linked to the success of these ventures.
The future of Tesla’s sales remains uncertain. The end of the tax credit, combined with the Trump administration’s opposition to clean energy, has dampened short-term prospects for EVs in the U.S. This has led many established automakers to postpone or scrap new electric vehicle plans, which could give Tesla a chance to regain some market share.
Tesla is also working on a more affordable Model Y SUV, with more details expected by year’s end. While not a completely new model, this EV is anticipated to be priced in the low $30,000s. The key question is whether this lower price will be enough to attract buyers to a very basic version of a Tesla.
At the same time, other leading automakers saw their EV sales double as the tax credit expired. Companies like Ford and General Motors have announced they will offset the lost incentive on select leases, aiming to keep their electric vehicles appealing in a market without federal support.
