Tesla’s quarterly sales increased for the first time this year, buoyed by a last-minute rush from U.S. consumers eager to claim a $7,500 federal EV tax credit before it expired on September 30.
The strong quarter has also helped drive Elon Musk’s personal fortune to a historic $500 billion, cementing his position as the richest man alive. But analysts caution that the real challenge lies in sustaining this momentum, given Tesla’s struggles in China and Europe, where the company faces mounting competitive and political headwinds.
Between July and September, Tesla produced 447,450 vehicles — 435,826 Model 3 and Model Y units and 11,624 “other vehicles” such as the Model S, Model X, and Cybertruck. That represented a 5 percent decline compared to the 469,796 vehicles produced in the third quarter of 2024. Deliveries, however, climbed 7.4 percent year-on-year to 497,099 vehicles, including 481,166 Model 3 and Model Y units and 15,933 other models, up from 462,890 last year.
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For a direct-to-consumer automaker like Tesla, deliveries are the clearest measure of sales, and the spike was largely fueled by the deadline for the U.S. EV incentive. The company delivered nearly 50,000 more vehicles than it produced, cutting into excess inventory that had been building throughout the first half of the year.
However, beyond the U.S., Tesla’s position is less secure. In Europe, sales are down 37 percent year to date compared with 2024, a slump worsened by the company’s strained relationship with regulators and consumers amid Musk’s polarizing political views. Analysts say Tesla has yet to fully repair its brand image in the region, where buyers increasingly see alternatives from Volkswagen, BMW, Stellantis, and now, Chinese models, as safer choices.
In China, Tesla is also losing ground to domestic rivals BYD and Geely, whose aggressive pricing and rapid innovation cycles have allowed them to capture a growing share of the world’s largest EV market. Musk has acknowledged that the competition is “fierce,” with Tesla forced to cut prices several times this year to keep pace — a strategy that has pressured margins.
With the U.S. tax credit now expired, some analysts believe that sales could drop sharply in the coming quarters. Musk himself has admitted that Tesla faces “a few rough quarters” as it adjusts to life without incentives. Still, he insists the company’s future lies not in its current EV lineup but in its AI-driven ambitions, including robotaxis and humanoid robots. By the end of 2025, Musk has pledged that half of the U.S. population will have access to Tesla’s robotaxi network, though so far it operates only in Austin and San Francisco.
The latest sales figures arrive amid Tesla’s high-stakes governance drama. Its board has proposed an audacious $1 trillion pay package for Musk, tied to ambitious milestones including producing over a million robots, launching a million robotaxis, and creating $7.5 trillion in shareholder value. If approved at a November 6 shareholder meeting, the package could double Musk’s net worth and potentially make him the world’s first trillionaire.
Musk recently bought $1 billion in Tesla stock — his first open-market purchase in over five years — in what he described as a vote of confidence. Tesla also unveiled its latest “Master Plan,” pivoting from its day-to-day EV operations toward a long-term future centered on AI and robotics.
Still, that future is far from guaranteed. Analysts note that Tesla’s latest growth was tied almost entirely to the federal credit, rather than an organic rebound in global demand. Without significant progress in China and a repaired relationship with Europe, sustaining growth will be difficult. Meanwhile, Tesla’s current lineup is aging, and the company has yet to provide a firm timeline for a cheaper Model Y variant originally slated for volume production in the second half of 2025.
However, Tesla’s results have given Musk another historic milestone — a $500 billion personal net worth. But as the glow of the U.S. tax credit fades, the EV maker faces the bigger test to rebuild trust abroad and secure lasting demand for its next generation of products.
In a surprise turnaround from the first half of the year, Tesla’s global deliveries grew 7.4% in the third quarter compared to the same period last year. The Elon Musk-owned carmaker delivered a record 497,099 Teslas during the three-month period, exceeding analyst expectations of 456,000. Tesla is one of several EV companies that benefited from a rush to purchase electric vehicles before a $7,500 federal tax credit expired Sept. 30. Rivian said Thursday that its deliveries jumped by a whopping 32% in the third quarter.