The automaker delivered 463,000 vehicles from July through September, up from 435,000 a year earlier, offering hope to investors that the company's sales have stabilized after falling in the first half of the year.
The sales data were just below the expectations of Wall Street analysts, and Tesla's share price fell 3.5% Wednesday.
Tesla boosted sales in part by offering 2.5% financing to qualified buyers in the United States, well below the market interest rate. It will be easier for the company, which is led by Elon Musk, to offer cheaper financing after the Federal Reserve cut interest rates by half a percentage point in September, the first of what is expected to be a series of cuts. Central banks in Europe, China and elsewhere have also been lowering rates.
Interest rates determine the size of monthly car payments and are often more important to buyers than sticker prices. That's why many analysts think car sales in the United States in particular could rise as the Fed cuts rates more.
"There is a contingent of folks who are going to say, 'Now is not the right time to commit $50,000 to a new vehicle,'" said Charles Chesbrough, a senior economist at Cox Automotive, a research firm. "They may just decide to wait a few months until after the election, until after the Middle East calms down, until they see if the Fed cuts rates further."
Tesla's share of electric car sales has fallen as rivals like General Motors, Hyundai, Ford Motor Co. and BMW have offered more battery-powered models. But Tesla still accounts for almost half of electric car sales in the United States and sets the tone for the market here and in other countries.
Sales of electric cars, while still growing, have fallen short of expectations and prompted GM, Ford, Volvo and others to scale back or slow down investment in electric vehicle production. A rebound in Tesla's sales could signal faster growth of electric models, a pillar of efforts by the Biden administration to fight climate change.
On Tuesday, GM said sales of its electric models in the United States in the third quarter jumped 60% from a year earlier, to more than 32,000. The company's U.S. sales of all vehicles fell about 2% in the quarter.
On Wednesday Ford reported a 12% increase in U.S. electric vehicle sales in the third quarter, to about 23,500, and a 0.7% gain in overall car and truck sales.
Tesla still faces significant challenges and questions about its strategy. The company's sales have recovered in China, the largest car market in the world. But the Chinese auto market is very competitive, and many automakers are losing money or earning meager profits there.
In Europe, electric vehicle sales are slumping after Germany slashed subsidies for buyers. Tesla remains reliant on just two cars -- the Model Y sport utility vehicle and the Model 3 sedan -- for most of its sales, while rivals like GM and Hyundai-Kia offer more choices, newer designs and often lower prices.
GM's bestselling battery-powered model is a new electric version of the Chevrolet Equinox SUV. GM sold more than 9,700 in the third quarter, and this week started selling an entry-level model of that car that starts at $35,000 before federal and state breaks. The cheapest Tesla Model Y sells for about $45,000 before tax incentives.
In addition to selling cars that are more expensive, Tesla appears to be struggling because Musk has alienated many potential buyers with his provocative statements on X, the social media site he owns, and his vocal support of former President Donald Trump and conservative causes. Centrist and left-leaning consumers are much more likely than conservatives to buy electric cars.
Musk has staked the future of Tesla on autonomous driving, while saying little about plans for new models. On Oct. 10, the company plans to unveil a self-driving taxi, but analysts are skeptical that Tesla is as close as Musk says to developing a vehicle that can navigate without human intervention.
There is speculation that Tesla will also unveil a cheaper passenger car on the same day, expanding the number of people who can afford a Tesla. The company has said it is working on a such a product, but it has not confirmed that it will show the vehicle this month or when it might go on sale.
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