While Tesla set a sales record during the third quarter, the electric vehicle company has steep competition abroad as other automakers gain momentum in the European market.
What's happening?
Tesla delivered a record-breaking 497,099 electric vehicles between July and September, according to City AM. That's up 29% from the previous quarter. The publication attributed much of the boost in sales to the federal tax credit that expired Sept. 30.
Analysts told City AM that they aren't sure the momentum in sales will last, citing factors like a limited lineup and backlash against Tesla CEO Elon Musk. Despite a good quarter, Tesla's sales for January to August declined by 43% year on year.
"Tesla may still be a big fish, but the pond is now full of serious competitors," Andy Palmer, chair of Electric Vehicles UK, said. "Unless it refreshes its range, it will keep losing market share."
For now, Tesla remains ahead of its competitors in Europe. However, Chinese automaker BYD did outsell Tesla for a second period in 2025 so far, per City AM.
Why are Tesla's sales important?
According to Reuters, Tesla has offered low-cost financing on some of its vehicles, but the company previously promised to introduce cheaper models, too. Steep prices can make EV ownership less accessible and slow the adoption of environmentally friendly cars.
Meanwhile, Tesla's competitors have already introduced new EVs with impressive price tags. China, the home of BYD, continues to lead the EV market with more than 11 million cars sold, per the International Energy Agency.
Unlike gas-powered cars, EVs have zero tailpipe pollution. Although charging an EV does require energy, the planet-friendly cars are more efficient than their counterparts, per the U.S. Environmental Protection Agency. Going electric can save drivers hundreds of dollars a year on gas and maintenance.
What's being done about EV sales?
Data showed that EV sales exceeded 1 million units in the United States during the first nine months of the year. While Tesla sales have declined, the automaker is still on top in the U.S. with a 43.1% market share through September, per CNBC.
Tesla confirmed that it will launch a new vehicle this month, according to Electrek. The model will reportedly be "more affordable" for customers as the company aims to boost sales.
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In the meantime, many drivers have opted for preowned EVs instead. The New York Times reported that used EV sales spiked in July, rising 40% from a year earlier.
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