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Tesla (TSLA) reported record-breaking third-quarter vehicle deliveries of 497,099 units on October 2, 2025, substantially exceeding Wall Street expectations of around 447,600 deliveries. The 7% year-over-year increase came as buyers rushed to purchase electric vehicles before the expiration of a federal tax credit that ended as part of President Donald Trump’s spending bill passed in July. The strong delivery numbers pushed Tesla shares up over 1% following the announcement, with the company set to report full financial results on October 22, 2025.

Record Q3 Deliveries Fueled by Expiring EV Tax Credits
 

Tesla’s third-quarter performance marked a significant turnaround after two consecutive quarterly declines earlier in 2025. The company delivered 497,099 vehicles during the period ended September 30, up from 462,890 deliveries in the same quarter of 2024. Production totaled 447,450 vehicles for the quarter, with the company manufacturing 435,826 of its popular Model 3 and Model Y vehicles. The surge in deliveries was partially driven by U.S. customers rushing to take advantage of a federal tax credit for electric vehicle buyers before it expired at the end of September.

The tax credit expiration was part of President Donald Trump’s spending bill that passed in July 2025. This deadline created urgency among potential EV buyers, particularly offsetting weakness in European markets where Tesla faced declining sales due to consumer backlash against CEO Elon Musk’s political activism and increased competition from manufacturers like Volkswagen and BYD. The company’s energy storage business also performed strongly, deploying 12.5 GWh of battery storage products including Megapack and Megablock systems, up significantly from 6.9 GWh in the third quarter of 2024.

Shares Hold Momentum, But Profit Margins Raise Questions
 

As of 10:06 AM EDT on October 2, 2025, Tesla stock (TSLA) was trading at $458.26, down $1.20 or 0.26% for the day, though shares had climbed over 1% immediately following the delivery report announcement. The stock has demonstrated remarkable momentum recently, jumping 40% during the third quarter and turning positive for the year with a 14% year-to-date gain, compared to the Nasdaq’s 18% rise. Tesla’s market capitalization stood at $1.523 trillion, with the stock trading at a trailing P/E ratio of 261.79 based on earnings per share of $1.75.

Despite the strong delivery numbers, Tesla faces significant headwinds in the fourth quarter and beyond without the federal tax credit incentive. Analyst price targets for the stock range widely from a low of $115 to a high of $600, with an average target of $345.50, suggesting substantial uncertainty about the company’s valuation. The company’s automotive margins have compressed from 23% to 17.2%, raising questions about profitability as Tesla competes with lower-priced competitors like BYD’s $10,000 vehicles. Investors will be closely watching Tesla’s October 22 earnings call for guidance on how the expiration of federal EV incentives will impact demand in future quarters.

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