Tesla has warned customers about its incentive strategy for qualifying electric vehicles, as the days of both the $7,500 EV tax credit for new EVs and the $4,000 credit for used EVs are coming to a close.

Both tax credits, which impact some of the vehicles in the Tesla lineup, are set to be eliminated at the end of Q3. The phase out of these consumer credits was always in the plans of the Trump Administration, but now we’re in the final quarter of their existence.

As a result, EV companies are scrambling to see how they can reduce costs or make their vehicles more affordable for customers. The $7,500 will price many consumers out of many EVs on the market, and Tesla is not immune to that.

However, Tesla has made a significant push into Q3 deliveries, rolling out numerous incentives to customers, including 0% APR on select purchases, lease deals, free upgrades on certain inventory units, and more.

The extensive list of incentives on Tesla vehicles in the quarter will not get any longer, either. During last night’s Tesla Earnings Call for the second quarter of 2025, company executives stated that their intention for these incentives was to encourage customers to place orders early in the quarter.

Tesla will only be able to apply the $7,500 credit with deliveries that occur before the end of September. Even if an order is placed before then, delivery must be completed by September 31 to receive the tax credit.

CFO Vaibhav Taneja confirmed that the incentives for the quarter are already out and encouraged customers to place an order sooner rather than later:

“Given the abrupt change, we have a limited supply of vehicles in the US this quarter. As we are already within lead times to order parts for cars, we have rolled out all our planned incentives already and will start pairing them back as we start to sell. If you are in the US and looking to buy a car, let’s roll now as we may not be able to guarantee delivery for orders placed in the later part of August and beyond.”

🚨 Tesla has rolled out all of the incentives it plans to utilize in Q3

These incentives will slowly be removed as supply becomes limited.

In short: put your Tesla order in NOW pic.twitter.com/UaqPfWtiJP

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— TESLARATI (@Teslarati) July 23, 2025

The loss of the incentives will impact every EV maker in the United States. Tesla has a plan moving forward, and it said last night that its affordable models would be rolled out in Q4, as introducing these cars any earlier could have detrimental effects on Model 3 and Model Y sales.

The 2025 Tesla Model Y was one of two midsize luxury SUVs to receive the Top Safety Pick+ award from the Insurance Institute for Highway Safety (IIHS).

To qualify for the IIHS’s Top Safety Pick+ or even the lower-tier Top Safety Pick label, vehicles need good ratings in the small overlap front and side crash tests, an acceptable or good rating in the pedestrian front crash prevention evaluation, and acceptable or good ratings for headlights across all trim levels.

The difference between the two labels is that an “Acceptable” rating in the moderate overlap front test will get a car the Top Safety Pick rating, but a “Good” rating in this category will win the elusive Top Safety Pick+ category.

The 2025 Model Y, codenamed “Juniper” internally by Tesla, was released in the United States earlier this year and received the top rating across each of the categories, automatically qualifying it for the Top Safety Pick+ label:

🚨 The 2025 Tesla Model Y has earned the Top Safety Pick+ award and label from the IIHS

It aced each of the collision rating test scenarios in its recent assessment

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The safest cars on Earth! 🌎 pic.twitter.com/XHoOLPa3IJ

— TESLARATI (@Teslarati) July 24, 2025

Other vehicles in Tesla’s lineup have extraordinary marks in crash testing according to other agencies, like the National Highway Traffic Safety Administration (NHTSA), but there are reasons those cars are not on the IIHS lists.

In 2024, we reported that the IIHS had evaluated some Tesla vehicles for the necessary tests to achieve these marks. Joe Young of the agency told us that the Model 3, for example, was not featured on either the Top Safety Pick or Top Safety Pick+ lists because the vehicle had several missing tests.

Here’s why the Tesla Model 3 wasn’t an IIHS Top Safety Pick+, and why it could be soon

This is not to say those other Tesla vehicles would not perform well. The Cybertruck performed better than any pickup has ever in NHTSA crash testing assessments.

The Model Y is Tesla’s most popular vehicle and was the best-selling car in the world over the past two years. Tesla’s intense focus on safety continues to show that this priority goes into every decision the company makes regarding design and engineering. This focus has continued to pay dividends as some real-world crashes save the lives of those inside the cars.

Tesla gave a massive update on its plans to launch a potential lineup of affordable models, something that it has been developing for the past couple of years.

During its Q2 2025 Earnings Call yesterday, Tesla revealed some new details regarding the production plans of the affordable vehicles, and while the company did not shed any light on the potential price, we now have some information on the plans and timing of the cars.

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In the Shareholder Deck released at the time the market closed, Tesla said it successfully completed initial production of the affordable models in the first half of the year, more specifically in June. The company said these vehicles would begin volume production in the second half of this year:

“We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025.”

During the call itself, CEO Elon Musk confirmed these cars would be available starting in Q4. This makes sense as the EV tax credit will not expire until the end of Q3. Launching the affordable models before the tax credit is gone would likely cannibalize sales of Tesla’s current mass market vehicles, meaning the Model 3 and Model Y.

Musk said:

“As we said, we started production in June, and we’re ramping. We probably built some things throughout the quarter, and given that we started in North America and that our goal is to maximize production with higher rates by the end of Q3, we’re going to keep pushing hard on our current models to avoid complexity. Then, fortunately, that rolls away. We’ll be running with the more affordable models available for everyone in Q4.”

The pricing of the affordable models still remains a mystery, and because the term “affordable” is subjective, we truly do not know what to expect. In the past, Musk has stated that the affordable models will cost under $30,000, including the tax credit.

With that being phased out, we are hoping to see a price around the $35,000 mark, especially since the least expensive Tesla, the Model 3 Long Range Rear-Wheel-Drive, is $42,490 before the tax credit.

The affordable models could be Tesla’s key to returning to annual growth, as in the past two years, it has delivered 1.8 million vehicles. The number of vehicle deliveries might not be as important as the company’s focus truly turns to autonomy and Robotaxi, but many investors will still look at this annual delivery figure as a sign of EV adoption and its potential trends moving forward.