22 Comments Tesla is about to tumble off a familiar policy cliff. The $7,500 federal tax credit that juiced demand for electric vehicles in the US, Tesla’s last large, healthy market, ends after September 30, 2025. Tesla has been here before, but the ground underneath the company looks very different today. Let’s dig into what happened last time, what’s changing now, and why Elon Musk is already warning shareholders of “tough quarters ahead.” We have been here before. Tesla lost access to parts of the federal tax credit for electric vehicles in 2019 and lost it fully by 2020. Flashback: the 2019 credit phase‑out was painful—but survivable Trigger: Tesla crossed 200,000 cumulative US deliveries in July 2018, starting a timer that halved the credit to $3,750 on Jan 1 , 2019, and again to $1,875 on Jul 1, 2019, before it went to zero on Jan 1, 2020. Tesla’s playbook: On Jan 2, 2019 the company shaved $2,000 off the sticker of every Model S, X, and 3 to “partially absorb” the lost incentive. Demand whiplash: The price cut wasn’t enough to avoid a huge pull‑forward. Deliveries spiked in Q4 2018, then fell 31 % QoQ in Q1 2019. Fast recovery: Thanks to Model Y’s arrival and virtually zero credible EV competitors, Tesla ended 2019 with 367,500 global deliveries (‑US dip only 1 %) and roared back to 499,550 in 2020. Last time, the phase-out was gradual, enabling Tesla to fill the hole with price cuts. Advertisement - scroll for more content Most importantly, the phase-out period coincided with the launch of Model Y, which never had full access to the federal tax credit, allowing Tesla to grow in the US without it. The 2025 sunset hits everyone, but it hurts Tesla most The situation in 2025 is vastly different. Firstly, the EV market has undergone significant changes in the US. Tesla is still the biggest brand, but it’s nowhere near where it was 5 years ago: 2020 cliff