Tesla's sales are sluggish as electric car manufacturers face sales drops in the second year
Tesla Automobile sales have dropped sharply in the past three months, down 13% in the second quarter a year ago.
Now, the electric car maker needs to deliver more than a million vehicles in the usually strong second half to avoid annual sales drops. Analysts say it is a daunting task given the Trump administration’s comprehensive tax bill, including key-driven economic uncertainty and threats to phase out key EV incentives, which include $7,500 in U.S. credit for new sales and leases.
Tesla's sales fell to 384,122 from April to June, down from 443,956 in the same three months last year. In recent times, Musk officially left the Trump administration in the form of a cost-cutting tsar and hoped that sales would resume.
Global protests against Musk’s pivotality in American politics also began in March, with some continuing to appear in the following months.
Musk recently said Tesla is in a state of a “major rebound” in sales.
Analysts say that, some parts of the report are encouraging. Model 3 and Y sales totaled 373,728, up from Wall Street analysts’ 356,000 estimates. Tesla shares rose 4.6% in afternoon trading.
“These numbers aren't as bad as all the cuts we've seen in the past week predicted by analysts,” said Seth Goldstein of Morningstar. “The current lineup is in market saturation and Tesla will need new affordable vehicles to develop delivery.”
Possible growth on February 2, 2025
Sandeep Rao, a senior researcher in Leveraged Stocks, is also cautiously optimistic.
“Although overall delivery volumes remained year-on-year, the decline slowed significantly, which suggests a possible decrease, and may even be the growth potential in the second half of the year,” Rao said.
While Tesla has relied on low-cost financing to boost demand, in a market that hasn't launched long-promoted cheap models, where stylish and feature-rich electric vehicles from Chinese competitors have been winning buyers.
Two of the most powerful people on Earth – How did Donald Trump and Elon Musk go from being involved in a public collapse to enemies? Andrew Chang explains what motivates the wedge between them and why it might be in their best interest to reconcile early rather than later and reconcile. Getty Images provided by images, Canadian Media and Reuters. (Additional credits: 4:35 -MSNBC/YouTube; 4:37 -CNN/YouTube; 4:29 -CBS News/YouTube)
Tesla has said it will start producing a cheaper vehicle (expected to be the demolished model Y) by the end of June, but Reuters reported in April that it was delayed for at least a few months.
The journey between Musk and Trump is not over yet – it is unclear how this may affect Tesla's financial situation. The president threatened to use his office to hurt his company, including Tesla, on Tuesday, pushing its stock to more than 5%.
As Tesla's focus is reduced, it focuses more on robots, autonomous driving technology and robots. Tesla is in a robot test in Austin, Texas, and the case has unfortunately reviewed federal auto safety regulators, including one in which a videotape shows a videotape in an opposing lane.
Competition among rival electric car manufacturers is particularly fierce in Europe, with China's Bit leading the way in its market share. Tesla's sales fell 28% in 30 European countries, even though the overall market for electric vehicles expanded dramatically, according to the European Automobile Manufacturers Association.
Musk acknowledged that his work as head of the Ministry of Government Efficiency (DOGE) has hurt the company by his embrace of European far-right candidates. But he attributes most of the sales to customers who postponed while awaiting a new version of Tesla's best-selling model Y.
Tesla will report second-quarter financial results on July 23. Net income fell 71% in the first quarter.
