Tesla has warned customers about its incentive strategy for qualifying electric vehicles, as the days of both the $7,500 EV tax credit for new EVs and the $4,000 credit for used EVs are coming to a close.
Both tax credits, which impact some of the vehicles in the Tesla lineup, are set to be eliminated at the end of Q3. The phase out of these consumer credits was always in the plans of the Trump Administration, but now we’re in the final quarter of their existence.
As a result, EV companies are scrambling to see how they can reduce costs or make their vehicles more affordable for customers. The $7,500 will price many consumers out of many EVs on the market, and Tesla is not immune to that.
However, Tesla has made a significant push into Q3 deliveries, rolling out numerous incentives to customers, including 0% APR on select purchases, lease deals, free upgrades on certain inventory units, and more.
The extensive list of incentives on Tesla vehicles in the quarter will not get any longer, either. During last night’s Tesla Earnings Call for the second quarter of 2025, company executives stated that their intention for these incentives was to encourage customers to place orders early in the quarter.
Tesla will only be able to apply the $7,500 credit with deliveries that occur before the end of September. Even if an order is placed before then, delivery must be completed by September 31 to receive the tax credit.
CFO Vaibhav Taneja confirmed that the incentives for the quarter are already out and encouraged customers to place an order sooner rather than later:
“Given the abrupt change, we have a limited supply of vehicles in the US this quarter. As we are already within lead times to order parts for cars, we have rolled out all our planned incentives already and will start pairing them back as we start to sell. If you are in the US and looking to buy a car, let’s roll now as we may not be able to guarantee delivery for orders placed in the later part of August and beyond.”
🚨 Tesla has rolled out all of the incentives it plans to utilize in Q3
These incentives will slowly be removed as supply becomes limited.
In short: put your Tesla order in NOW pic.twitter.com/UaqPfWtiJP
— TESLARATI (@Teslarati) July 23, 2025
The loss of the incentives will impact every EV maker in the United States. Tesla has a plan moving forward, and it said last night that its affordable models would be rolled out in Q4, as introducing these cars any earlier could have detrimental effects on Model 3 and Model Y sales.