Finance
Tesla posts record deliveries, concerns mount over EV demand post-tax credits
Published by Global Banking & Finance Review®
Posted on October 2, 2025
4 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 2, 2025
4 min readLast updated: January 21, 2026
Tesla reports record deliveries but faces concerns over future EV demand as U.S. tax credits expire, impacting sales and share prices.
By Akash Sriram and Abhirup Roy
(Reuters) -Tesla announced record quarterly deliveries on Thursday, but concerns that an expiration of the U.S. tax credit for EVs would turn a rush of buying into a trickle weighed on its shares.
The Elon Musk-led carmaker went all in to drive sales before the withdrawal of the $7,500 federal tax credit, using a combination of discounts, financing deals, social media ads and customer emails.
"I'm skeptical that this will be sustainable and I think we could see a soft couple of quarters," said Elliot Johnson, chief investment officer at Evolve ETFs, which manages investments in Tesla.
The sales surge reflected pulled-forward demand, possibly to lock in incentives, rather than growing consumer interest, Johnson said, adding it would not be irrational for investors to "sell the news" and buy again next year.
Tesla shares were down 3.4% in afternoon trading. The stock has rallied recently - up nearly 14% this year as of Wednesday's close - after the company's board proposed a mega pay package for Musk, who has also bought more shares.
Tesla, like its rivals, received the credits from the government and used them to offer attractive leases. Following the expiry, Tesla has raised lease prices for its vehicles. The prices of Tesla vehicles, excluding the credit, remained unchanged.
On Thursday, the company said it delivered 497,099 vehicles for the three months ended September, up 7.4% from 462,890 a year earlier, and well above Wall Street expectations of 443,919 vehicles.
The deliveries included 481,166 Model 3 compact sedans and its best-selling Model Y crossovers. The carmaker is set to report quarterly results on October 22.
Strong demand for its refreshed Model Y helped sales in China, said Troy Teslike, an independent Tesla researcher.
It also began delivering the six-seat Model Y L in China in September, a family-focused variant aimed at boosting demand in the world's largest EV market.
Europe, however, remained a weak spot as rivals aggressively promoted plug-in hybrids, while Chinese EV brands started gaining ground in the hyper-competitive market.
The company'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.
Tesla's full-year 2025 deliveries are projected to be about 1.61 million, roughly 10% below 2024, according to Visible Alpha. Tesla will need to deliver 389,498 vehicles in the December quarter to meet that projection.
Meanwhile, smaller rival Rivian on Thursday lowered the midpoint of its annual deliveries forecast, but beat estimates for quarterly deliveries owing to a boost in demand from buyers rushing to take advantage of tax credits.
MUSK AND TESLA
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 $500 billion mark on Wednesday, bolstering his position as the world's richest person.
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 $1 trillion, if performance and valuation targets are met, including delivering 20 million vehicles over a 10-year period.
The billionaire has been positioning Tesla more as a technology company than an EV maker by focusing on AI-based self-driving systems, robotaxis and humanoid robots.
CHEAPER MODELS
Tesla has delayed rolling out the lower-cost Model Y in the U.S., pushing the timing by several months, with an eventual plan to build the variant in China and Europe.
Tesla said in June that it had made "first builds" of the vehicle, but would start selling it in the fourth quarter and ramp up output slower than planned.
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 U.S. by 2026, sources told Reuters earlier this year.
(Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Anil D'Silva)
Electric vehicles (EVs) are cars that are powered by electricity instead of gasoline or diesel. They use electric motors and batteries to operate, offering a more environmentally friendly alternative to traditional vehicles.
Market share is the portion of a market controlled by a particular company or product. It is usually expressed as a percentage of total sales in a specific market.
A quarterly report is a financial statement that publicly traded companies must file with the SEC every three months. It includes financial performance, earnings, and other key metrics.
A lease in automotive terms is a contractual agreement that allows a person to use a vehicle for a specified period in exchange for regular payments, without owning the vehicle outright.
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