New York (AFP) – Tesla reported higher global third-quarter auto deliveries on Thursday, joining a broad slate of automakers seeing a surge in electric vehicles ahead of the phaseout of a US tax credit. The US EV maker reported deliveries of 497,099, up seven percent from the year-ago level, reversing a series of declines in three straight quarters attributed partly to backlash to CEO Elon Musk’s political activism.
While the figures did not break down sales by region, automakers saw a jump in US electric vehicle sales due to the September 30 expiration of a tax credit under legislation backed by President Donald Trump. Recent quarters have seen Tesla sales sink as the company faced blowback over Musk’s embrace of far-right political figures. Musk officially left his position with the Trump administration in May.
Tesla’s results have also been buffeted by rising competition in China from Chinese EV manufacturers and tepid demand for the Cybertruck, a futuristic stainless steel vehicle championed by the controversial CEO. Musk has touted Tesla’s potential for great growth due to its autonomous driving and artificial intelligence technology, but some analysts have expressed disappointment at the lack of progress on developing EVs at lower retail prices — long a stated goal of the company.
Tesla’s latest batch of sales figures “smashed expectations,” said a note from Hargreaves Lansdown analyst Matt Britzman that pointed out the “rush” of sales due to the US tax credit expiration. “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,” Britzman said.
Musk in July warned that Tesla faced a potentially “rough” period in terms of financial results once the tax credit expires. Trump’s sweeping fiscal package enacted in July the phaseout of a federal tax incentive of up to $7,500 per vehicle.
On Wednesday, Detroit automakers General Motors, Ford, and Stellantis were among the companies to report higher US sales in the third quarter, along with foreign brands such as Toyota, Honda, and Kia that are significant players in the US market. The third-quarter surge from the EV credit expiration is reminiscent of a sales uptick in the second quarter as consumers rushed to showrooms to beat out tariffs announced by Trump.
The annualized auto average sales rate rose to 16.4 million in September, topping expectations, JPMorgan Chase analysts said in a note Thursday. But the report, which also cited a buoyant stock market as supportive of sales, predicted “eventual moderation, likely as soon as October, as EV sales normalize lower.”
Cox Automotive chief economist Jonathan Smoke said solid 2025 sales thus far reflect “a stronger than expected economy and auto market” during a briefing last week ahead of the sales figures. However, Smoke said automakers still face questions on how much of the tariff hit to pass on to consumers after largely absorbing the costs so far. New tariffs add around $5,500 in costs to the average imported vehicle.
Smoke said the average US consumer is likely to see a four to six percent increase in average prices by this time next year, with some models up eight percent. Cox analysts highlighted the introduction of 2026 models as a likely opportunity to hike prices, noting that retail inventories are “relatively tight” and stand below year-ago levels.
© 2024 AFP
