CNN
—
Tesla reported another record sales plunge Wednesday, as brand damage from CEO Elon Musk’s political activities and increased competition continued to batter the once fast-growing electric car maker.
Tesla reported it sold 384,122 cars in the quarter, down nearly 60,000 cars, or 13.5% from the sales total a year ago. That marks the largest year-over-year drop in sales in the company’s history. However, that number is up 14.1% from its first quarter total.
Despite the sales drop, shares of Tesla (TSLA) opened up nearly 4% in Wednesday trading following the report. That’s because it exceeded some analyst forecasts for a much larger plummet.
Musk’s political activities, especially his role in the Trump administration, have prompted widespread protests at Tesla showrooms across the United States and Europe, along with some instances of vandalism against its vehicles and facilities. The company does not break down its sales by region, but registration data has suggested that both US and European sales have fallen sharply. That came despite sales of electric vehicles (EVs) increasing overall in both markets.
The company also faces increased competition, not just from legacy Western automakers, but also from Chinese automakers. The latter has hurt Tesla’s sales in China, the largest market for both EV and auto sales and Tesla’s second largest market.
Notably, Tesla is poised to lose its title for the world’s largest EV maker, based on annual sales, to Chinese automaker BYD, even though BYD has not entered the US market. Earlier on Wednesday, BYD reported it had sold 1 million electric vehicles in the first half of this year, putting it far ahead of Tesla’s year-to-date total of sales of about 721,000.
For most of its history, Tesla has experienced strong gains in year-over-year sales, which has helped lift shares. That has made Tesla the world’s most valuable automaker, despite having a fraction of the overall sales of legacy automakers.
But Wednesday’s report marks the second straight quarter of declines for the company, with sales dropping at least 13%. This follows its first annual decline last year. Before 2024, the company had logged only one quarterly drop – in 2020, when the pandemic shutdown factories and disrupted sales.
Tesla shares have seen big swings over the past half a year. They nearly doubled from election day to hit record levels in mid-December due to investor expectations the company would benefit from Musk’s ties to President Donald Trump. But it soon lost all of those gains and more, falling more than 50% by mid-April.
Since then, shares have started to recover. First shares rose after Musk announced in April that he would be leaving the Trump administration to focus to Tesla, and then on news of its long-promised rollout of a robotaxi service. That helped to lift Tesla shares 35% from its low in April through Tuesday’s close.
This story has been updated with additional reporting and context.
