Tesla’s Q3 Sales Jump Hints at an EV Market Recovery

Tesla said its Q3 2024 deliveries climbed nearly 28,000 year-over-year, suggesting that the company — and the EV market as a whole — might be recovering.

The automaker reported 462,890 deliveries last quarter compared to 435,059 a year earlier. The figures also represented sharp improvements over the first half of the year, when Tesla had two quarters of declining delivery numbers.

While the greater production volume (469,796) still added nearly 7,000 cars to Tesla’s unsold inventory, the performance largely matched analyst expectations. TSLA shares were down over 5% as of this writing, although that follows weeks of increases.

Tesla didn’t explain the increase in its release. It might provide more details with its Q3 2024 financial results, which are due on October 23rd. The company has continued to lean on lower prices and other incentives to sustain its sales, but they didn’t have as much of an effect earlier in the year.

The last quarter of the year could be pivotal. Tesla is on the cusp of holding its October 10th robotaxi event, which might spur sales even though it’s unlikely to include updates to existing car models.

At the same time, Tesla has stopped selling the standard rear-wheel drive Model 3 in the US, possibly to avoid tariffs on the Chinese-made lithium iron phosphate (LFP) battery pack. While this won’t necessarily have a major impact on sales, it raises the base price of a Tesla to $42,490 before tax credits.

Possible Signs of an EV Market Recovery

The improved Tesla deliveries might be welcome to other EV brands. EV sales growth has been soft throughout 2024, and companies like Ford and GM have said they’ll shift some of their focus to hybrids in the next few years. During the summer, worldwide improvements in EV demand mostly came from a highly competitive Chinese market.

If Tesla’s performance is indicative of a broader trend, it could be reassuring to Hyundai and other companies that remain firmly committed to EVs, including electric-only makes. Polestar’s CEO stepped down in August as a response to difficult market conditions, while Rivian and other marques have dealt with layoffs or relied on external funding.

However, this only represents one quarter of data. Clear evidence of a recovery won’t exist until there have been two or more consecutive quarters of growth, and for better deliveries across the industry, not just at Tesla.