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Tesla Delivers More Than 486,000 Vehicles In Q3 As U.S. Pressure Persists

Tesla reported another solid quarter of vehicle deliveries, moving more than 486,000 electric vehicles in the third quarter as the company continued to offset weakness in the U.S. market with stronger performance abroad.

The result marks a second consecutive quarter of momentum after a softer start to the year. Tesla said Friday it built 464,391 vehicles and delivered 486,532, a figure that exceeded Wall Street expectations and surpassed even the most optimistic forecasts for the quarter.

A Strong Quarter, But Still Below Last Year

The latest delivery total was roughly 6,000 vehicles higher than in the second quarter, but it remained below the 497,000 vehicles Tesla delivered in the same period last year. That comparison matters: the prior-year quarter represented Tesla’s best on record, helped by a wave of U.S. buyers rushing to take advantage of an expiring federal tax credit.

Before Friday’s release, Cox Automotive estimated Tesla’s U.S. sales were down nearly 20% year over year, underscoring the pressure the company has faced in its largest market.

What Is Weighing On U.S. Demand

Several factors have contributed to the slowdown. Tesla has not launched a major new mass-market model in years, aside from the Cybertruck, which has struggled to gain traction commercially. At the same time, some prospective buyers have distanced themselves from the brand amid Elon Musk’s political alignment with Donald Trump and his leadership role in the Department of Government Efficiency, which has drawn scrutiny for layoffs and cuts to international aid funding.

Tesla has tried to cushion the impact by leaning more heavily on overseas demand, where electric vehicles generally benefit from stronger policy support and broader consumer adoption.

Europe And China Are Helping Fill The Gap

Sales are rising again in Europe, where tighter emissions rules continue to support EV adoption. Tesla is also reportedly expanding capacity at its factory in Germany to meet stronger demand.

In China, the company has continued to post resilient sales despite intense local competition. Some of that growth has also been tied to expansion into newer markets, including Japan, Australia and Lithuania.

For Tesla, these regions have become increasingly important as the company works to balance a weaker domestic backdrop with more favorable conditions abroad.

Musk Is Looking Beyond Car Sales

Even as deliveries rebound, vehicle sales are no longer the center of gravity for Tesla’s chief executive. Musk has increasingly emphasized the company’s next phase of growth, starting with autonomous transportation.

Tesla recently began putting its Cybercab on public roads in Austin, Texas, where the two-seat vehicle has been offering driverless rides despite lacking a steering wheel and pedals.

The company has also launched production of its long-delayed electric Semi, nearly a decade after the truck was first unveiled. Tesla says it eventually aims to produce about 50,000 Semis annually.

Big Ambitions, Long Timelines

Other projects remain in development, but their commercial timelines remain unclear. Tesla’s second-generation Roadster is scheduled to be re-revealed on October 15, though it remains uncertain when it will reach production.

The company is also advancing its Optimus humanoid robot, a project Tesla has repeatedly delayed. Earlier this week, Tesla said it secured up to $30 billion in new credit lines to support those initiatives as it seeks to scale the Cybercab and Optimus programs.

For now, Tesla’s latest quarter shows a company still capable of moving substantial volume even under pressure. The more important question is whether its future growth will continue to come from selling cars — or from building entirely new businesses around autonomy, robotics and transportation infrastructure.

ECB Moves to Ease Rules for Smaller Banks Without Weakening Supervision

The European Central Bank is preparing a significant broadening of proportionality in banking supervision, a move that could bring roughly 150 additional smaller institutions into a lighter regulatory framework, according to ECB Executive Board member Frank Elderson.

In a post on the ECB’s supervision blog, Elderson, who also serves as vice-chair of the Supervisory Board, said the goal is to reduce the regulatory burden on small and non-complex institutions while preserving the safeguards that support financial stability.

A More Flexible Approach To Supervision

Rather than creating a separate rulebook for smaller lenders, the ECB’s proposals would expand the existing framework for small and non-complex institutions, or SNCIs, by broadening eligibility and easing the frequency and intensity of certain supervisory tasks.

Elderson argued that Europe’s varied banking sector is a strategic strength. Smaller, locally focused banks, he said, play a critical role in financing households and small and medium-sized enterprises, which in turn supports innovation, employment and investment across the region.

“These institutions play an important role in financing households and small and medium-sized enterprises, helping innovative ideas become successful products and supporting jobs and investment across the region,” Elderson wrote.

He added that a banking system combining different business models, sizes and areas of expertise is better positioned to meet the financing needs of the European economy and, by extension, support competitiveness.

Why Proportionality Matters

The ECB’s approach rests on a simple principle: regulatory requirements should be calibrated to a bank’s size, complexity and risk profile.

At the same time, Elderson cautioned that smaller banks are not insulated from the pressures facing the wider financial system. He pointed to geopolitical risk, cyber resilience in the era of advanced artificial intelligence, digitalisation and climate- and nature-related risks.

“Depositors in smaller banks should be just as confident that their savings are safe and their bank is well managed, resilient and subject to robust risk management standards as those in larger institutions,” he wrote.

The central bank believes a more targeted framework would allow smaller lenders to devote more resources to the risks that matter most, while trimming compliance work that adds cost without materially improving resilience.

A Wider Definition Of Small Banks

The most consequential proposal would broaden the definition of what qualifies as a small bank.

Today, the SNCI framework covers 75% of all less significant institutions under European banking supervision, representing more than 1,400 entities as of December 2025.

Under the ECB’s proposal, national authorities would be able to lift the current €5 billion total-assets threshold for SNCI status to as much as €10 billion, depending on the size and structure of domestic banking sectors.

The ECB also wants the definition of “non-complex” to better reflect how banks operate in practice. Elderson noted that some institutions, especially in smaller member states, fail to qualify as SNCIs because of technical features in their recovery and resolution arrangements, even when they are not complex from a resolution standpoint.

Taken together, the changes could result in as many as 85% of less significant institutions being classified as SNCIs, bringing about 150 additional banks into the lighter framework.

The ECB also wants the SNCI label to be used more consistently in future European banking legislation, with new and amended rules spelling out more clearly how they apply to smaller and non-complex institutions.

Less Frequent Supervisory Reviews

The changes would not stop at classification. The ECB is also proposing a more selective approach to supervision itself.

The Supervisory Review and Evaluation Process, or SREP, could be carried out less frequently for some institutions. Elderson said certain banks might go two to three years without a full SREP if their risk profile justifies that approach.

That flexibility would remain subject to supervisory judgment, meaning banks could still face more frequent scrutiny if their risk warrants it.

“Where risks are low, some supervisory assessments will in practice be carried out even less frequently, reducing the burden on banks without undermining supervisory effectiveness,” Elderson wrote.

The ECB is also seeking to reduce the burden of stress testing. Bottom-up stress tests, in which banks run their own projections and submit them to supervisors, would be used only selectively for SNCIs. Supervisors would rely more heavily on top-down exercises, with projections carried out centrally.

That shift could meaningfully reduce the workload for nearly 1,000 SNCIs that are still subject to bottom-up stress tests.

Reporting Could Be Cut Dramatically

Reporting is another area targeted for simplification.

The ECB said its systems have already been adapted to support a materiality threshold for reporting resubmissions once the relevant legislative changes are in place.

A new SNCI category is also set to be introduced into the ECB’s FINREP regulation from 2027, beginning with a public consultation.

Under the proposed revisions, the volume of financial reporting required from SNCIs could fall from around 13,500 data points to roughly 700.

Updates to the European Banking Authority’s technical standards on supervisory reporting are also expected to remove redundant templates, eliminate overlaps and exempt SNCIs from certain reporting requirements.

More Flexibility On Governance

The ECB is also pushing for a more proportionate approach to governance requirements.

Supervisors would make greater use of existing flexibility to reflect a bank’s risk profile and operational complexity.

That could allow certain committees to be merged, including nomination and remuneration committees, while functions such as risk management and compliance could also be combined where appropriate.

The proposals would also create more room for flexibility around pay rules, including possible exemptions from requirements to defer variable remuneration or pay it in financial instruments.

Periodic independent reviews of remuneration policies could also be outsourced and applied in line with the sophistication of a bank’s internal stress-testing framework.

Why Smaller Markets Stand To Benefit

The proposals may be especially relevant to smaller European banking markets, even though the ECB has not identified which national authorities would choose to raise the €5 billion threshold.

Cyprus, for example, has a relatively small banking market and its domestic institutions fall under the European banking supervision framework. Any decision to apply the higher SNCI threshold would therefore depend on the applicable rules and supervisory assessment.

Elderson was explicit that the changes should not be read as a weakening of core safeguards.

“Proportionality should not be mistaken for reducing prudential standards for smaller banks,” he wrote. “The aim is not to lower standards, but to achieve them in a more efficient and proportionate manner.”

The ECB also said any simpler regime for smaller banks must be matched by a credible, flexible and efficient crisis management framework.

In Elderson’s view, trimming administrative overhead would free up scarce resources for risk management, customer service, investment in competitiveness and operational efficiency.

“By reducing undue complexity and the administrative burden for small and non-complex banks, these measures can support the competitiveness of Europe’s diverse banking sector, without compromising resilience,” he wrote.

What Comes Next

The ECB is preparing to implement the simplification measures within its authority. It will also work with European institutions on changes that require action beyond the central bank, including initiatives under development through the European Banking Authority.

For Elderson, the proposals are part of a broader push to streamline European banking supervision, not just for smaller institutions but across the system as a whole.

“Our goal is clear: to make our supervision more efficient, more effective and more risk-based, while continuing to preserve banks’ resilience,” he wrote.

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