Tesla has reported a significant plunge in its second-quarter vehicle deliveries, delivering 384,122 units. This represents a 13.5% decrease from the 443,956 units delivered in the second quarter of the previous year, placing Tesla on track for its second straight annual sales decline, and suggesting analysts may have underestimated the impact of CEO Elon Musk’s actions.
The primary driver of this decline is seen as the backlash surrounding CEO Elon Musk’s political stances, which is negatively impacting consumer demand. This, coupled with an aging vehicle lineup, is creating a challenging environment for Tesla, even as the broader EV market expands.
The financial repercussions are evident, with Tesla’s stock losing 25% of its value this year. Concerns about brand damage are particularly acute in Europe and the US, where sales have slumped most sharply. The public disagreements between Musk and President Donald Trump, at one point leading to a massive $150 billion loss in market value, highlight the direct link between Musk’s public actions and Tesla’s financial performance.
Despite efforts to refresh the best-selling Model Y to boost demand, the redesign inadvertently caused production interruptions and prompted some buyers to delay purchases. With most of Tesla’s revenue tied to its core EV business and its ambitious robotaxi plans, the company faces an uphill battle. Analysts are largely predicting a second consecutive annual sales decline, making Musk’s ambitious target of over a million deliveries in the second half of the year seem increasingly out of reach.