Sales Surge Amid Expiring Incentives
Tesla reported record-breaking sales in the third quarter of 2025 as American buyers rushed to purchase electric vehicles before the $7,500 federal tax credit expired on September 30. The company sold 497,099 vehicles globally from July through September, edging past its previous record set in late 2024. The total was up 29% from the second quarter and 7% higher than the same period a year earlier, marking Tesla’s first year-over-year sales gain this year.
Despite the strong quarter, experts caution that the surge is unlikely to last. The tax credit, originally introduced under the Biden administration, was eliminated as part of President Donald Trump’s latest spending and tax legislation. Analysts predict the pre-expiration buying spree may depress demand in the coming months. Year-to-date, Tesla’s sales remain 6% lower than the same timeframe in 2024.
Impact on Markets and Musk’s Fortune
News of the sales record initially boosted Tesla’s stock by 2% in early trading, bringing it close to its all-time high. That pushed CEO Elon Musk’s net worth above $500 billion, making him the first person in history to surpass the half-trillion mark, according to Forbes. However, the rally was short-lived. Shares fell 4% by the afternoon, pulling Musk’s net worth back down to $490 billion.
Tesla only reports global sales totals, without regional breakdowns. Still, the rush for EVs in the U.S. was evident across the sector. General Motors said its EV sales more than doubled in the quarter, while Ford reported a 30% increase. Hyundai also announced its U.S. EV sales doubled, though it quickly followed up with price cuts averaging $9,155 on its IONIQ 5 to maintain competitiveness after the tax credit’s expiration.
Growing Competition and Market Shifts
Even as Tesla hit a quarterly high, registration data indicates its market share continues to decline globally. The company faces increasing competition, particularly from Chinese automakers that are expanding aggressively in Europe and Asia. Chinese EV giant BYD reported a 31% rise in quarterly sales, reaching 1.6 million EV passenger cars sold so far this year. In comparison, Tesla’s year-to-date total stands at 1.2 million.
BYD’s growth, achieved without selling in the U.S., has positioned it to potentially surpass Tesla as the world’s largest EV manufacturer. Meanwhile, Tesla has also been impacted by backlash tied to Musk’s political activities, which have sparked protests in the U.S. and Europe, adding further challenges to its brand perception.
Outlook for the EV Market
Industry analysts say the removal of federal incentives could reshape the U.S. EV market, leading to potential price cuts across the board to maintain consumer interest. Automakers are preparing to adjust pricing strategies as the industry transitions to competing on affordability and features rather than relying on subsidies.
While Tesla’s third-quarter results highlight its continued strength, the longer-term outlook underscores a more competitive and uncertain landscape, with rivals like BYD narrowing the gap and shifting the balance of power in global EV sales.