Austin: US electric vehicle giant Tesla's net income dropped 37% year-on-year in the third quarter, despite a recovery in sales from the previous two quarters' declines and a rush by consumers to take advantage of a federal tax credit.
According to Anadolu Agency, Tesla's net income fell to $1.37 billion in the third quarter from $2.17 billion a year earlier, even though American consumers hurried to purchase electric cars before the expiration of a $7,500 federal tax credit last month.
Meanwhile, revenue for the firm rose to $28.1 billion in the June-September period, marking a 12% increase from $25.18 billion a year earlier. The company also experienced a 6% increase in automotive revenue, which grew to $21.2 billion from $20 billion during the same period last year.
The federal tax incentives for electric vehicles, which were removed as part of President Donald Trump's funding package, came to an end at the close of the quarter. This led to a rush of customers seeking to take advantage of the incentives before their expiration, thereby boosting sales within the quarter.
However, Tesla's automotive regulatory credit revenue saw a 44% decline, dropping from $739 million to $417 million during the quarter. Despite this, the company refrained from committing to a specific delivery target for electric vehicles and energy products by the year's end, citing uncertainties related to global trade and fiscal policies, cost structures, and demand for durable goods.
Tesla's CEO Elon Musk and Chief Financial Officer Vaibhav Taneja cautioned shareholders about the challenges posed by increased tariff charges and the expiration of tax credits during the company's most recent earnings call in July.
While overall sales growth has returned, the third quarter revealed a continued decline in sales in Europe, partly due to customer backlash against Musk, political controversies, and competition from EV manufacturers such as Volkswagen and BYD.
Despite a sharp decline at the beginning of the year, Tesla's stock has rebounded and is currently up approximately 9% in 2025. Following the release of the latest financial results, the company's shares fell about 1.8% in after-hours trading on Wednesday.