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What does the end of the $7,500 federal tax credit mean for Tesla’s finances?

Analyst Troy Teslike estimates what will happen to Tesla’s top and bottom lines in several different scenarios.

8/11/25 12:21PM

When the $7,500 federal EV tax credit ends in September, Tesla will have some tough decisions to make, having to choose between denting sales or its bottom line. Now we have an idea of just how damaging that could be.

An analyst who goes by the name Troy Teslike recently modeled what Tesla’s finances for Q4 — the first quarter without the credit — might look like, depending on whether or how much Tesla lowers its prices.

If Tesla keeps prices as they are without the discount, effectively raising the price for buyers by $7,500 (scenario No. 1), he says Tesla could see its US sales plunge 37%, but the company’s gross margins would fall only to 13% and its earnings per share to $0.16 (down from 15% and $0.33 in Q2 2025, respectively).

The other end of the spectrum (scenario No. 8) would be if Tesla ate the $7,500 credit, keeping prices the same for consumers. In that case, Teslike estimates that deliveries wouldn’t drop, but the company’s margins and earnings would decline substantially to 8.1% and $0.03, respectively — barely a profit at all.

Teslike suspects the EV company will probably pick somewhere in the middle and cut the price for consumers by about $2,500.

Here’s what each of those scenarios would look like:

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.