Tesla is about to lose a tax credit of $ 7,500 – again – and this time there is a cliff a lot

Tesla is going to shove the well -known political cliff. Federal tax credit of $ 7,500, which demand for electric vehicles in the US, the last large, healthy market Tesla ends after 30 September 2025. Tesla was here earlier, but the group looks very different.

Let’s dig into what happened for the last time, what is now changing, and why Elon Musk is already warning shareholders of “hard quarters ahead”.

We have here before. Tesla lost access to parts of the federal tax credit for electric vehicles in 2019 and lost it by 2020.

Flashback: Credit Phase 2019 – Out was painful – surviving bed

• Trigger: Tesla exceeded 200,000 cumulative US delivery in July 2018 and started a timer that reduced the credit to $ 3.750 1. January2019, and again at $ 1.875.
• Tesla’s Playbook: January 2, 2019 shaved $ 2,000 from the sticker of each model S, XA 3 to “partially absorb” the lost incentive.
• Ask whiplash: Reducing the price was not enough to have a huge sweater. Delivery increased in the fourth quarter of 2018, then dropped 31 % QoQ in Q1 2019.
• Fast recovery: Thanks to the arrival of the Y model and virtually zero trusted competitors EV, Tesla ended 2019 with 367,500 Global Deliveries ( – US DIP only 1 %) and yelled back 499 550 in 2020.

Most recently, the gradual procedures were gradual, Enabubling Tesla filled a hole with cut -outs.

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Most importantly, the period of gradual removal time coincided with the launch of the Y model, which never had full access to a federal tax loan, which made Tesla growing in the US without it.

Sunset 2025 hits everyone but it hurts the most tesla

The situation in 2025 is extremely different. First, the EV market has significant changes in the US. Tesla is still the largest brand, but it is not near where it was 5 years ago:

2020 Cliff	2025 Cliff
Who lost credit? Only tesla and gm	Each OEM but Tesla sells the most ev
Competitive field <15 mainstream EVS my dirty	> 60 Credit -Ecapitable Models in Showrooms
Tesla US Share ~ 75 % EV	46 % in Q1 2025 and sliding
Gross pillow ~ 22 % of the automotive industry	~ 17 % in Q1 2025 after a year of price reduction

Moreover, the impact of the tax credit was larger in the latest version. Biden Administration renewed Tesla’s access to a tax credit of $ 7,500 for electric vehicles in 2022 through the Act on Dressing Inflation (IRA).

In 2024, however, became even more attractive when the government made it a “incentive” that was used directly for the price of the vehicle, not as a discount on taxes.

The transition from this to Nething is spared to have a big impact on AMSE for electric vehicles in the US.

What can he do this time?

Tesla is expected to reduce prices to compensate for the expiration of the tax credit.

But Tesla has a slimmer rough margin than before, and it is not expected that CAP prices will be enough to compensate for a different price of $ 7,500.

In advertisingTesla is expected to reduce prices that would reduce prices with February functions, which should sign the basis of its most popular model.

It should help with the requirement and avoid lowering the greed in the Tesla production line in Fremont and Austin, but with less value than the current version of the Y model, it is expected to cannibalize mostly existing versions of the best -selling vehicle.

Key Take -away	Phase phase 2018-20	September 30, 2025 sunset (forward – search)
Trigger	Tesla intervened in July 2018 200 000 cumulative supplies of US EV; Credit reached 0 $ 1. January 2020.	STATETEORY CLEAN – Credit of Vehicles (up to $ 7,500 new / $ 4,000) all Manufacturers on 30 September 2025 as part of the IRA Sunset clause.
IMMADE requires a reaction	Pull out – overvoltage before each step – down (Q4 2018, Q2 2019) followed by soft Q1 2019 vans ( – 31 % QoQ).	Traders are already advertising “buying before it is away” and expecting analysis and Q3 2025 Bump.
Impact of volume in the first No. – credit year	Sales of Tesla USA in 2019 caused only 1 % and In 2020 RE -UCCELED +50 % Despite credit $ 0, helped launch the Y model and limited competition.	The competing landscape is radically different – the tests of the American share of EVA slipped from 62 % in 2022 to 46 % in Q1 2025. Ask more price – sensitive.
LEVERSE used	Reduction of $ 2,000-3,000, Funtureling and Offset Lost Credit.	Tesla would need to replicate previous success Deeper prices or interest financingThe gross margin printing is already decreasing ~ 650 bps between Q1 2025.
Strategic pillow	First – advantage of Mover; Several high -level opponents.	60+ eligible models from 17 brands of Compette in below – 60 to holder; The growing market used; Interest – rated still increased.

Electrek’s take

The shareholders should run the worst here. I know that many of them followed the fact that Tesla after the last tax credit was last for the last time, but as explained above, this time is entitled to differ.

The US was only a somewhat healthy Tesla market among the big car markets (USA, Europe and China). This is because it is an incompetitive market in terms of electric vehicles.

Foreign EVs are not eligible for tax credit and Chinese EV is subject to 100% tariff.

As a result, Tesla was able to maintain a market share of 45% (but a decline) on the US market, compared to only 9% in Europe and 4% in China.

Now the demand for electric vehicles in the US is expected to attack.

Tesla’s CEO Elon Musk knows that he warned that the automaker could face some “hard quarters” in “Q4 2025 and Q1 and Q2 2026.” He then tests Tesla to keep doing well thanks to autonomous driving, but he is constantly wrong about it.

I think the demand accident will be emphasized in the fourth quarter due to a request to pull forward in the quarter, which will probably be Tesla Laast Good Quarter for a long time.

In the US, we are going to see a decline in Tesla’s sales, most likely, while they have already crashed in Europe and experienced a decline in China for intensive competition.