Tesla's Record Q3 2025: Deliveries & Strategy Shift

Tesla is poised to report its biggest quarter ever in Q3 2025, with an estimated 512,000 vehicle deliveries, surpassing Wall Street expectations. This episode explores how Tesla leveraged the expiring U.S. EV tax credit to boost sales, maintained strong margins, and set the stage for future growth with affordable models and advanced self-driving technology.

Key Takeaways

• Tesla's Q3 2025 deliveries hit 512,000 units, a record high, beating Q4 2024’s 495,000.

• The end of the $7,500 EV tax credit drove demand without Tesla lowering prices.

• Gross margins are expected to near 17%, bolstered by high production volume.

• Competitors like BYD face sales declines, while Tesla rebounds.

• Tesla plans to launch affordable models and monetize self-driving software (FSD V14).

Tesla’s Q3 2025 is shaping up to be a landmark period, with delivery forecasts reaching 512,000 vehicles, a significant jump from the previous high of 495,000 in Q4 2024. The surge was fueled by a strategic push to highlight the expiring $7,500 U.S. EV tax credit, which ended on September 30, 2025, prompting buyers to act quickly. Unlike prior quarters where Tesla relied on price cuts, this approach preserved margins, potentially reaching 17% or higher due to optimized production.

While Tesla regains momentum, competitors like BYD are seeing their first sales decline in five years, impacted by oversupply and supplier payment delays. Tesla’s resilience marks a shift in market perception, moving away from narratives of declining EV demand. Looking ahead, Tesla faces challenges with the tax credit gone but is countering with lease credits of up to $6,500 for Model 3 and Model Y, alongside plans for a stripped-down, affordable model to capture a broader market.

The episode also highlights Tesla’s focus on its Full Self-Driving (FSD) V14 software, expected to offer unsupervised driving capabilities. By selling vehicles at cost and monetizing FSD subscriptions, Tesla aims to transition into a software-driven company, potentially generating significant recurring revenue. The Cybercab, a fully autonomous vehicle without steering wheels or pedals, was also teased, though regulatory hurdles remain. This episode underscores Tesla’s strategic pivot to affordability and software as it navigates a competitive EV landscape.