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This article is an update on the article I wrote two months ago that discussed how the “One Big Beautiful Bill” would impact electric car sales in the future.
3rd Quarter Sales
As I said in this article, after shopping around a bit in Colorado, sales in the US for Tesla, Chevrolet and Hyundai look very strong. Ford is not seeing a rush in sales, since they aren’t getting the tax credit, so buyers don’t lose anything on October 1st.
In Europe, there are lower sales in some countries because of brand damage (people upset about comments Elon Musk has made) and increased competition from China. On the other hand, there is now excellent availability of the new Model Y (which has received great reviews) and some availability of the new Model Y Performance. On balance, I expect sales to decline, but the decline in Europe won’t be as large as the increase in sales in the United States.
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In China, sales of the refreshed Model Y and Model 3 have been surprisingly strong (considering the incredible competition), but the technology and self-driving tech are recognized as top notch in the market. The introduction of the new YL has been a real hit and would allow China to hit all time record sales if Tesla could fill all the orders. The release of FSD in China also helped a bit to boost sales and cement Tesla’s reputation for leading-edge technology.
Sales in the rest of the world are still growing as Tesla expands into new markets, but this growth is tempered by strong competition from many Chinese brands that offer more affordable cars than Tesla.
Screenshot from Kalsi.com
So, overall, the sales for all regions should be an all time record. Predicted by the real money market Kalsi to be 508,000, this would beat the all time record from the fourth quarter of 2024 (495,507) by 13,000. The highest ever for a third quarter was 462,890 sales in the third quarter of 2024. This would be a 45,000, or 10%, increase over last year.
4th Quarter Sales
This quarter could be a real success or a real rough patch for Tesla. Let’s break it down into two sections — vehicles and Full Self Driving.
New and Enhanced Vehicles
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The new 6 seat (and possible 7 seat) YL could be a real hit. As I wrote here a couple of months ago, it offers the extra room so many people want at a price a lot lower than the Model X. There aren’t many cars (even in China) that offer this much room for this price. Unconfirmed reports are that Tesla is receiving 10,000 orders a day. That won’t last because that would be over 3 million sales a year, just in China, but I think there is some chance it could outsell the regular Model Y. I don’t think that many of these sales will take away from the regular Model Y, but instead will eat into larger SUV sales.
@JStabentheiner thought of an interesting loophole. @elonmusk didn’t say anything about not selling the Model YL in the U.S., he just said they wouldn’t make them in the U.S. for a while!
Making it in Germany and exporting to the U.S. might make sense.… https://t.co/jna2z1HVX5
— Paul Fosse (@atj721) August 24, 2025
Although Elon said that the Model YL wouldn’t start production in the US until the end of 2026, he didn’t say anything about not importing it from Germany.
@DMC_Ryan reported on his RideTheLightning podcast that he heard from a proven reliable source that orders for the YL would open in the U.S. soon and deliveries would be in 4q2025.
““However, the day before this post, a reliable Tesla source that I trust that has delivered in…
— Paul Fosse (@atj721) August 24, 2025
Ryan McCaffrey heard from a previously reliable source that the Model YL would open for orders in the fourth quarter of 2025 in the US.
The Model Y Performance and 3+ will be released in more markets, but I don’t expect either to be large sellers.
The Affordable Y could be a hit or a miss. I’ve written here that Tesla could price the affordable (assume it is the same size) Y under $30,000 without the tax credit. This model could sell for as little as $20,000 in China (down from $36,420 today). In this article about the new Nissan Leaf, I’ve written about how much the cheapest car you can buy has gone up over 15 years. It was shocking to me that affordable gas cars have doubled in price (with few enhancements) while electric cars have dropped in price while greatly improving their range and other features. I think this car could sell over a million units a year if it ends up being able to deliver the Tesla experience to a whole new audience, but a valid question is how many of those sales would be cannibalized from the regular Model Y.
The Y that is actually smaller is very much needed for places like Europe, Japan, and emerging markets that really prefer smaller sized vehicles. There have been rumors this will come out in 2026, but of course this might also have been cancelled or the affordable Model Y above might be a bit smaller. I think Tesla was going to build something much smaller than the Model Y, but I think Elon has killed the car as unnecessary due to the Robotaxi program. I think that is a mistake (due to delays in both that program and getting governments to approve the Robotaxi program in many parts of the world). It is also important to mention that in places where drivers are available at low wages, Robotaxis won’t be much if any cheaper than Uber vehicles. If this car is released, it could sell in the millions after years of ramping.
Full Self Driving (FSD) And The Robotaxi Program
FSD V14 with 10 times as many parameters has been hyped by Elon as the next big improvement and is scheduled to be released in September. Of course, it will probably be delayed. Tesla has hinted that this version is so good that it requires less driver monitoring. I don’t think it will do much for Tesla sales no matter how good it is if Tesla doesn’t take liability for the car’s driving. Why? But I can’t really relax or do other things if I’m responsible for anything that goes wrong. Many Tesla bulls just think people need to try FSD and they will fall in love with it. That works for 5% of the people called early adopters, but most of those people already own or rent FSD. So I expect this release to be amazing (just like V12 and V13), but not to make much difference.
Tesla has recently allowed anyone in the US with an iPhone to download the Robotaxi app and sign up for the waitlist to use the service. This is a good sign, but no guarantee it will be rolled out to the public soon. Both Tesla and Waymo are working to expand as quickly as possible, without causing a crash that will cause a big setback to all players. If Tesla continues to delay the expansion of the Robotaxi program as Waymo expands to more cities and expands to use less expensive LiDAR and less expensive vehicles, Tesla will find itself behind. Tesla has until the end of 2026 to make its technology work. If it can’t do that by the end of next year, I think investors will lose faith. On the other hand, if Tesla starts meeting its projections, I think Waymo will be unable to keep up with Tesla’s expansion, since it requires less mapping and uses less expensive vehicles.
Conclusion
I think the multitude of new and enhanced models will keep Tesla in the game into 2026, but its Full Self Driving technology needs to get good enough that Tesla is willing to take responsibility for its cars’ driving by the end of 2026 (at least in the US) or the company will lose momentum and investors will lose patience.
If you want to take advantage of my Tesla referral link to get up to $1000 off a new Tesla vehicle, here’s the link: https://ts.la/paul92237 — but as I have said before, if another owner helped you more, please use their link instead of mine.
Disclosure: I am a shareholder in Tesla [TSLA], BYD [BYDDY], XPeng [XPEV], and several ARK ETFs. But I offer no investment advice of any sort here.
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