Tesla Stock Rockets Higher. Its Cars Just Got More Expensive.

Coming into Wednesday trading, Tesla stock was up about 10% this year and about 72% over the past 12 months. (Brandon Bell/Getty Images)

Key Points

• Tesla increased monthly lease prices for its Model Y to a range of $529 to $599, up from $479 to $529, after the $7,500 federal EV tax credit was eliminated.
• The elimination of the $7,500 federal EV tax credit, effective October 1, 2025, is expected to impact electric vehicle pricing and sales.
• Tesla’s stock rose 3.3%, despite the loss of the tax credit, with investors seemingly focused on artificial intelligence opportunities.

Tesla stock rose on Wednesday to start October, the first month that buyers won’t have access to the $7,500 federal EV purchase tax credit after it was eliminated in President Donald Trump’s tax and spending bill.

The loss has already affected pricing for Tesla vehicles.

Shares of the electric-vehicle maker rose 3.3% to $459.46, while the S&P 500 and Dow Jones Industrial Average were up 0.3% and 0.1%, respectively. It was the highest close for the stock since Dec. 24 when shares closed at $462.28.

The move followed Tesla’s price increase for vehicle leases. Tesla displays monthly lease pricing on its website, and the monthly cost for a leased Model Y now ranges between $529 and $599, up from a prior range of $479 to $529, Reuters reported on Wednesday.

Sticker prices for Tesla’s cars were unchanged. The prior lease prices reflected a $7,500 reduction in the sticker price of the vehicle. With leases, the $7,500 tax credit benefit flowed to the leasing company that effectively owned the cars. That’s usually the credit arm of auto makers.

Ford Motor and General Motors recently announced a program with dealers to extend the $7,500 benefit for leased vehicles effectively. The company’s finance divisions essentially bought the cars before the Sept. 30 credit removal. It’s a temporary fix, though. When dealers’ existing EV inventory is gone, the new vehicles will not get a federal credit, whether they are leased or purchased with cash.

Losing the credit is essentially a price increase for EVs. The average EV transaction price in the U.S., before applying the credit, is about $57,000, roughly $8,000 more than an average gasoline-powered car. The tax credit helped close that gap. How the industry will adjust is hard to say. Either prices will come down or auto makers will sell fewer EVs.

Tesla is due to report third-quarter delivery results on Thursday morning. Wall Street expects about 457,000 vehicles delivered, according to FactSet, up from 384,000 in the second quarter. People have been buying more EVs ahead of the credit expiration.

Tesla CEO Elon Musk has warned of some “rough quarters” ahead, following the loss of the credit. Investors, however, don’t seem to mind. Tesla stock rose 40% in the third quarter. These days, investors are more focused on artificial intelligence opportunities.

Tesla launched an AI-trained robo-taxi service in Austin, Texas, in June. It is also using AI to train humanoid robots. Tesla hopes to start selling significant quantities of those in 2026.

Write to Al Root at allen.root@dowjones.com