Tesla reported a 13.5% decline in vehicle deliveries for the second quarter compared to the same period last year, marking the largest year-over-year drop in the company’s history.
Why it matters: The sales slump is attributed to brand damage from CEO Elon Musk’s political activities and increased competition, particularly from Chinese automakers.
The details:
- Tesla sold 384,122 cars in the latest quarter, down nearly 60,000 cars from a year ago.
- This is the second consecutive quarter of declines for the company, with sales dropping at least 13%.
- Tesla is set to lose its title as the world’s largest EV maker to Chinese automaker BYD, which sold 1 million electric vehicles in the first half of this year.
- Protests at Tesla showrooms across the United States and Europe, as well as instances of vandalism against its vehicles and facilities, have impacted sales.
Despite the sales drop, Tesla shares opened up nearly 4% on Wednesday following the report, as it exceeded some analyst forecasts for a more significant decline.
The background: Historically, Tesla has experienced strong gains in year-over-year sales, making it the world’s most valuable automaker despite having a fraction of the overall sales of legacy car manufacturers. However, the company logged its first annual sales decline last year.
What they’re saying:
- Liz Lee, associate director at Counterpoint Research, cited “persistent headwinds in key markets” as another contributing factor.
- “In parts of Europe, the political backlash associated with Elon Musk has further dampened demand, prompting localized boycotts,” Lee told reporters.
The stock impact: Tesla shares have seen significant fluctuations over the past half a year, nearly doubling from election day to reach record levels in mid-December due to investor expectations that the company would benefit from Musk’s ties to President Donald Trump. However, the shares soon lost all those gains and more, falling over 50% by mid-April.
What’s next: Tesla continues to face stiff competition and growing concerns over its brand reputation, especially in key markets like China and Europe. The ongoing challenge underlines the impact of Musk’s political entanglements on the company’s commercial success.
Recent from X
https://x.com/ErnestScheyder/status/1940438350009422026
https://x.com/norionakatsuji/status/1940651333755003345
https://x.com/Kanthan2030/status/1940443132409348267
https://x.com/Teslarati/status/1940555266782908584