The German luxury carmaker has been hit by US import duties and growing competition in China
Elon Musk’s Tesla overtook Mercedes-Benz in sales in the third quarter of 2025, according to the two companies’ quarterly sales reports. Musk drew attention to the milestone by sharing a post on X on Tuesday highlighting that his company had beaten the German luxury carmaker for the first time ever.
Tesla sold a record 497,099 vehicles globally between July and September, slightly surpassing the previous record set in the final quarter of 2024, according to their quarterly report. The figure represents a 29% jump from the 384,122 units sold in the second quarter and a 7% increase compared to the same period last year. It also marked the first quarter this year that Tesla posted year-over-year growth.
Musk reposted a summary noting that Tesla sold 55,599, or 12.6% more vehicles than Mercedes in the third quarter. The post noted that Mercedes built its first car back in 1901, while Tesla debuted just 21 years ago, in 2004.
Mercedes, one of the world’s most valuable luxury car brands, reported on Tuesday that it sold 441,500 vehicles, a 12% decline from the same period last year. Sales in the US and China, its largest markets, dropped 17% and 27%, respectively.
The company blamed US President Donald Trump’s import duties and rising competition in China, where domestic automakers such as BYD and Xiaomi are gaining market share with feature-packed electric cars that undercut traditional brands on price.
Tesla’s Q3 report sparked a rally in its stock last week, briefly boosting Musk’s net worth to $500.8 billion, according to Forbes’ real-time billionaire tracker – making him the first person ever to cross the half-trillion-dollar mark.
Market experts, however, caution that Tesla’s surge may be temporary. They say the jump in sales was likely driven by US buyers rushing to purchase vehicles before the expiration of a $7,500 federal tax credit on September 30. The credit, introduced under former President Joe Biden’s administration in 2022, was scrapped under Trump’s new spending and tax bill. Analysts warn that its removal could slow sales in the coming months. Tesla’s year-to-date sales remain down 6% compared to the same period in 2024.
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