Tesla deliveries top estimates, but could the expiration of the EV tax credit kill the momentum?

Tesla's Delivery and Market Position - Tesla reported record third-quarter deliveries of just over 497,000 cars [1] - Tesla's stock experienced a 30% rally in September, recovering its 2025 losses [1] - The company demonstrated its ability to grow again after previous year-over-year declines in revenue and deliveries [3][4] - Traditional OEMs' concerns about EV demand in 2026 create an opportunity for Tesla to increase sales [6] - Tesla's history shows that lowering prices leads to increased orders, a trend applicable to the overall industry [17] Impact of EV Incentives - The expiration of EV incentives at the end of Q3 likely pulled forward demand [4][5] - Analysts expect a sequential decline in Q4 car sales, contrasting with the typical increase, due to the incentive expiration [5] - The removal of taxpayer-funded incentives necessitates that EVs are purchased based on their own merit [16] - Q3 sales results indicate that EV products may be priced too high, suggesting a need for automakers to adjust pricing [18][19] - A potential steady decline in EV car prices could diminish the importance of government subsidies [20] Future Outlook and Valuation - New vehicle introductions are expected to sustain momentum from Q3 into Q4 and 2026 [4][5] - Analysts are focusing on Tesla's earnings power relative to the MAG 7, looking at earnings up to 2028 [11][12] - Used electric cars are depreciating rapidly, making them a potentially good bargain for consumers [26] - Tariffs and the expiration of incentives could make 2026 cars more expensive [29] - Q4 auto sales are expected to dip, potentially by as much as 50%, due to demand being pulled forward [23]