Tesla's Q3 2025: A Critical Juncture as US EV Tax Credit Nears End

Tesla is facing a pivotal moment in 2025, with a slow start to the year in deliveries. However, the upcoming third quarter could mark a significant turnaround, especially with the impending end of the $7,500 EV tax credit in the United States. This creates a critical three-month window for consumers to purchase electric vehicles with the incentive, potentially boosting Tesla's sales volume.

US EV Tax Credit Set to Expire

The United States House of Representatives has passed President Trump’s “Big Beautiful Bill,” which includes the termination of the $7,500 EV tax credit. The bill, already approved by the Senate, is expected to be signed by President Trump before his July 4 deadline. This means the tax credit will officially end on September 30, 2025, making EVs effectively $7,500 more expensive for most buyers thereafter.

• The tax credit is available to single filers earning under $150,000 annually, heads of household earning under $225,000, and couples filing jointly earning under $300,000.

This move aligns with the Trump administration's policy leanings towards fossil fuels, a stance that has been a point of contention with Tesla CEO Elon Musk, who has criticized what he calls an “EV mandate.”

Tesla's Opportunity Amidst Policy Shift

The impending expiration of the tax credit presents a unique opportunity for EV manufacturers, particularly Tesla, due to its high sales volume. Consumers who have been considering an EV purchase now have a strong incentive to act within the next three months.

To capitalize on this, Tesla could implement additional strategies:

• Financial Incentives: Offering 0% APR, special leasing, or financing options.

• Promotional Offers: Providing unique advantages, such as the recent free Red, White, and Blue paint option for a limited time in celebration of Independence Day.

Delivery Performance and Future Outlook

Tesla's delivery figures for 2025 currently stand at just under 721,000 vehicles, putting the company on pace for approximately 1.4 million deliveries by year-end. This would represent a decrease from the 1.8 million vehicles delivered in each of the past two years.

Historically, the second half of the year has been Tesla's strongest in terms of deliveries. The company's top three quarters for deliveries include:

• Q4 2024: 495,570 vehicles

• Q4 2023: 484,507 vehicles

• Q3 2024: 462,890 vehicles

With the right incentives and a strong push during this critical period, Tesla has the potential to significantly boost its Q3 sales and reverse the slow start to 2025, potentially making it one of the company's best quarters on record.