Prime Highlights:
- Tesla’s vehicle sales rebounded strongly last quarter, delivering over 497,000 EVs—well above Wall Street expectations.
- The company plans to release a more affordable Model Y later this year and the 14th version of its full self-driving software, aiming to maintain momentum despite the loss of the federal EV tax credit.
Key Facts:
- Analysts had predicted Tesla would sell around 450,000 vehicles, making the actual deliveries about 47,000 units higher.
- Some U.S. states, including California, Colorado, and Vermont, still offer EV tax credits, helping to support buyer demand even after the federal incentive ended.
Key Background:
Tesla’s vehicle sales bounced back strongly last quarter, beating Wall Street expectations and giving investors some relief after a tough first half of the year. The company delivered over 497,000 vehicles from July to September, much higher than the 450,000 units analysts had expected. This represents a 7.5% increase compared to the same period last year and roughly 100,000 more vehicles than the previous quarter.
Analysts hailed the numbers as a “massive bounce back” for Tesla, which has faced delivery slowdowns and market challenges earlier this year. The surge in sales, however, is partially attributed to a last-minute rush from buyers eager to take advantage of the $7,500 federal EV tax credit, which expired recently after being in place for 17 years. The incentive helped reduce the price gap between electric and gasoline vehicles for U.S. consumers.
With the tax credit no longer available, Tesla acknowledged that consumer demand could be impacted in the near term. CEO Elon Musk said the company might have a few tough quarters, and some analysts expect sales to drop temporarily. Nevertheless, Tesla is struggling to maintain its strength with price changes, expansion in China and Europe, and a cheaper Model Y later in 2021.
The company also has an intention to release the 14th update of its full self-driving software that might make its cars more appealing despite the increase in price. Wall Street also responded in a defensive manner, as Tesla shares fell over 5 percent following the sales announcement, yet the company has continued to focus on innovation, market share control, and cost containment.
Experts note that other EV makers may benefit from the expired federal tax credit because they now have more flexibility in sourcing and pricing, though the savings won’t fully match the old incentive. Other states continue to offer EV credits, such as California, Colorado, and Vermont, and they may attract the interest of buyers.
In general, the recent growth in Tesla sales is an encouraging factor, without the federal tax credit. In the following months, people will be observing the way the company handles the prices, expands the market, and will be implementing new features.
