Dear Tesla Stock Fans, Mark Your Calendars for September 30

Yahoo

a day ago

Few events on the calendar carry as much weight for U.S. electric vehicle buyers — and Tesla (TSLA) investors — as Sept. 30, 2025. That date marks the end of the $7,500 federal EV tax credit under U.S. President Donald Trump's 'One Big Beautiful Bill Act,' signed into law in July. The move effectively shortens what was, under the President Joe Biden-era Inflation Reduction Act, a generous incentive slated to run through 2032. Now, with the clock ticking, the U.S. EV market is bracing for a major shift.
In this article, we'll explore what the Sept. 30 deadline means for Tesla, how it could reshape U.S. EV demand, and why investors should mark their calendars for what may be one of the most pivotal dates for TSLA stock in 2025.
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About Tesla Stock
Tesla is a prominent innovator dedicated to accelerating the global transition to sustainable energy. The Elon Musk-led powerhouse designs, develops, manufactures, leases, and sells high-performance fully electric vehicles, solar energy generation systems, and energy storage products. It also offers maintenance, installation, operation, charging, insurance, financial, and various other services related to its products. In addition, the company is increasingly focusing on products and services centered around AI, robotics, and automation. TSLA's market cap currently stands at $1.1 trillion.
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Shares of the EV maker have dropped 15.8% on a year-to-date basis. Tesla shares have been on a steady upward trend since Aug. 5. Several factors have supported the stock's gains. First of all, there's risk-on sentiment across markets, driven by Federal Reserve rate-cut expectations, easing global trade tensions, and a strong Q2 earnings season in the U.S. U.S. EV demand also appears strong in the third quarter, though this is likely driven by the impending loss of the $7,500 federal tax credit in September.
Tesla Rides Sales Surge Ahead of Tax Credit Expiration
The third-quarter EV buying frenzy is underway. The main reason is that consumers are rushing to purchase EVs ahead of a looming deadline to claim tax credits of up to $7,500. As a reminder, U.S. President Donald Trump's 'One Big Beautiful Bill Act,' signed in July, eliminates the tax credits for new, used, and leased EVs after Sept. 30.
The tax credits, worth up to $7,500 for new EVs and $4,000 for used ones, are designed to make EV purchases more financially appealing to consumers. The EV tax incentives were among several policies implemented by the Biden administration to help reduce U.S. greenhouse gas emissions, with the transportation sector being the nation's largest emitter. Notably, under the Biden-era Inflation Reduction Act, the tax credits were initially set to be available to consumers through 2032.
'We're expecting Q3 may be [a] record for EV sales because of the tax incentives going away,' said Stephanie Valdez Streaty, a senior analyst at Cox Automotive. The firm's data revealed that consumers bought nearly 130,100 new EVs in July, marking the second-highest monthly sales on record, trailing only roughly 136,000 sold in December. Streaty said that July's figures represent a 26.4% jump from June and an increase of nearly 20% compared to the same month last year. In addition, EVs made up roughly 9.1% of total passenger vehicle sales in July, the highest monthly share on record. All of this indicates that the impending expiration of the federal tax credit is fueling a surge in demand this quarter.
Analysts noted that dealers are leveraging the upcoming deadline to create a sense of urgency among consumers and drive sales. Tesla's homepage now displays the message '$7,500 Federal Tax Credit Ending' in bold lettering. Beneath it, the automaker added, 'Limited Inventory — Take Delivery Now.'
Meanwhile, Tesla CFO Vaibhav Taneja stated during the Q2 earnings call that the company is prioritizing building and delivering as many vehicles as possible in the U.S. before the tax credits expire. The company has recently extended the estimated wait time for its best-selling Model Y to four to six weeks, up from the previous one-to-three-week range. It's an indication of increased order activity.
On the back of higher U.S. demand, Wall Street projects Tesla will deliver 430,000 vehicles globally in the third quarter. That represents an increase from the 384,000 vehicles delivered in the second quarter but remains below the 463,000 sold in Q3 2024.
How Could EV Tax Credit Elimination Impact Tesla?
The federal electric vehicle tax credit program has played a major role in boosting Tesla's U.S. sales. With the expiration of these credits approaching, Tesla could soon be selling vehicles at effectively higher prices for consumers. And this applies not only to Tesla, but also to other automakers selling EVs, with analysts warning it could trigger a sharp drop in U.S. EV sales in the fourth quarter and beyond. Notably, there are already precedents for how similar policy changes have impacted EV adoption, as seen in Germany, where EV sales dropped sharply following the end of subsidies in late 2023. So, the first obvious implication is a decline in consumer demand.
Of course, automakers could lower prices to help offset the loss of tax subsidies. For instance, Ford (F) cut prices on its Mustang Mach-E after it lost a $3,750 tax credit in January 2024, while General Motors (GM) provided a $7,500 incentive on models that lost the credits at that time. In Tesla's case, this would impact its unit gross profits, as average vehicle selling prices would have to drop substantially to offset the loss of the EV tax credit. And this comes at a time when its average selling prices have already been under pressure in recent quarters due to intense competition.
With that, regardless of Tesla's response, the elimination of EV tax credits represents a significant headwind for the company. Tesla CEO Elon Musk, during the Q2 earnings call, warned of tough times ahead for the company as incentives such as the EV tax credit phase out in the U.S. 'We probably could have a few rough quarters,' Musk said.
Meanwhile, the company is expected to launch its more affordable vehicle, which Musk described as resembling a Model Y, to the public in the fourth quarter. On the one hand, the vehicle is likely to provide some support to delivery volumes. On the other hand, the affordable model could cannibalize Model Y sales since it is essentially a stripped-down version of the latter. With that, monitoring delivery figures will be key to assessing the potential impact of cannibalization. Anyway, I expect a decline in deliveries, both sequentially and year-over-year, in Q4.
Over the past few months, analysts have gradually reduced their estimates for Tesla's fourth-quarter top and bottom lines. They currently expect Tesla's adjusted EPS for Q4 to fall 45.5% year-over-year to $0.36, while revenue is projected to remain largely unchanged at $25.81 billion.
What Do Analysts Expect for TSLA Stock?
Wall Street analysts remain split on Tesla, with the stock carrying a consensus 'Hold' rating. Among the 41 analysts covering the stock, 12 rate it as a 'Strong Buy,' two as a 'Moderate Buy,' 17 recommend holding, and 10 assign a 'Strong Sell' rating. TSLA stock is currently trading above its average price target of $299.28.
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com