Tesla reported a profitable third quarter today — its first this year — as shoppers scrambled to snatch up the company’s EVs in record numbers before the federal EV tax credit expired.

Tesla said it earned $1.4 billion in net income on $28.1 billion in revenue in the quarter that ended in September. That’s 12 percent increase in revenue but a 37 percent decrease in profits over the third quarter of 2024, when the company earned $2.2 billion in net income on $25.2 billion in revenue. Tesla’s revenue came in above Wall Street expectations of $26.24 billion, according to data compiled by LSEG.

Tesla was widely expected to have a relatively good quarter as a result of the expiration of the $7,500 federal EV tax credit on September 30th. The company sold a record number of EVs in the third quarter, delivering a total of 497,099 vehicles, a 7.4 percent increase compared to the third quarter of 2024. Tesla also sold around 50,000 more vehicles than it produced, helping reduce the extra inventory that’s been building up for the first half of the year.

But this is likely to be a rare positive quarter in an otherwise dour year for Tesla. The company reported its first year-over-year sales drop in 2024 and is expected to do the same at the end of this year, with analysts predicting an 8.5 percent decline. In addition to an aging lineup of vehicles, Tesla is also facing stiffer competition in all major markets than it ever has before. And Elon Musk’s far-right political rhetoric, and his donations and work for the Trump administration, have repelled many of the company’s liberal customers.

As the top EV seller in the country, Tesla is an obvious bellwether for the health of the market. Experts predict that sales will drop dramatically in the US after the tax credit vanishes. Musk himself has said that the company is in for “a few rough quarters” thanks to the expiring incentive and other macroeconomic factors. But he believes that Tesla will rebound as its AI plans come to fruition, including robotaxis and humanoid robots. Musk has said that 50 percent of the US population will have access to Tesla’s robotaxis by the end of 2025. So far, the vehicles are only available in Austin and San Francisco.

The sales report comes on the heels of a proposed new pay package for Musk, which if approved could make him the world’s first trillionaire. Musk would need to meet a series of ambitious milestones to receive the compensation, including producing over a million robots and a million robotaxis and creating $7.5 trillion in value for Tesla’s shareholders. Tesla is holding a shareholder meeting on November 6th to vote on the proposal.