Electric vehicle (EV) giant Tesla (TSLA) could see one of its best quarters this year thanks to President Trump’s “Big, Beautiful Bill.” The U.S. House of Representatives officially passed the megabill yesterday, and it is due to be signed by the president today, July 4. The bill ends the $7,500 EV tax credit, effective September 30, 2025. This means that people looking to buy an EV in the U.S. will end up paying $7,500 more starting in October. Although the tax credit was subject to certain conditions, it remained an attractive incentive for EV buyers.
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Notably, customers who intend to buy an EV before the tax credit expires have only the current quarter to complete their purchase. This could significantly boost Tesla’s vehicle sales in the third quarter, which ends on September 30. Tesla CEO Elon Musk and President Trump have engaged in a heated public dispute over the bill’s proposal to eliminate these tax credits.
Tesla Got Off to a Slow Start in 2025
Tesla’s EV deliveries during the first half of 2025 have been significantly lower. Compared to the same quarters in the prior year, Tesla’s auto deliveries fell by 13% in Q1FY25 and 14% in Q2FY25. In the first six months of 2025, Tesla delivered 720,803 autos, suggesting it could deliver a total of around 1.4 million autos this year. However, this would mark a sharp decline from the 1.8 million EVs delivered in both 2024 and 2023.
It is worth noting that Tesla’s deliveries typically grow stronger in the second half of the year. So, there is still potential for a major turnaround, especially in Q3, given the incentive of EV tax credits.
Tesla Is Offering Free Upgrades to Red, White, and Blue Paint
Notably, Tesla is capitalizing on the Independence Day holiday by offering free Ultra Red, Pearl White, and Deep Blue Metallic paint upgrades on certain EV models in the U.S. until July 14. The offer applies to the revamped Model 3 and Model Y, as well as existing inventories of the 2025 Model S and Model X.
Furthermore, Tesla can leverage the situation by offering other incentives, such as interest-free loans (0% Annual Percentage Rate) and special offers on financing or leasing its EVs. These types of promotional incentives can also bolster Tesla’s EV sales in the short term.
Customers keen on buying an EV will have a good chance to claim the tax credits over the coming three months. While this applies to all EV manufacturers, Tesla stands to benefit the most from this incentive, as it is currently the largest EV manufacturer in the U.S.
Is Tesla a Buy or Sell Today?
Analysts are currently taking a cautious stance on Tesla’s stock due to ongoing challenges. On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 12 Holds, and nine Sell ratings. Also, the average Tesla price target of $293.09 implies 7.1% downside potential from current levels. Year-to-date, TSLA stock has lost 21.9%.
