Tesla continued to struggle with weak vehicle sales in the second quarter of this year. The downward trend continued as global vehicle sales plunged 13.5% year-over-year. Despite this news, Tesla’s stock surged nearly 5% on the New York Stock Exchange (NYSE).
Sales Decline Persists Due to CEO Risk and Chinese EV
On Wednesday, Tesla reported delivering 384,122 vehicles to customers in the second quarter. This figure fell short of the 387,000 units forecast by analysts polled by FactSet. Last year, Tesla’s vehicle deliveries declined for the first time in a decade, and this downward trend has persisted through the first two quarters of this year.
Dan Ives, a Tesla bull and analyst at Wedbush Securities, commented that the Q2 delivery numbers were “better than feared.”
Despite Tesla’s efforts to reverse the sales slump this year, the company has struggled to regain momentum. The decline in Tesla’s vehicle sales can be attributed to the rising competition from Chinese electric vehicles in the global market. Many industry observers also point out that the CEO’s risk has significantly contributed to Tesla’s sales decline. Tesla CEO Elon Musk has been a lightning rod for criticism, particularly during his tenure as head of the Department of Government Efficiency (DOGE) under the Trump administration. Recently, he has been criticizing U.S. President Donald Trump’s policies via social media.
Morgan Stanley noted that the ongoing friction between Musk and Trump could negatively impact Tesla’s sales. They explained that while the situation remains fluid, the conflict between Trump and Musk is unlikely to boost Tesla’s demand.
To combat the sales decline attributed to Musk’s political activities, Tesla is focusing on launching new vehicle models and offering attractive financing options. In March, the company released Juniper, a refreshed version of its popular Model Y midsize SUV. In April, it also unveiled a more affordable version of the Cybertruck. Last month, Tesla introduced updated versions of its Model S and Model X, featuring improved interior materials and subtle exterior redesigns.
Ives predicts that the Model Y will drive increased deliveries in the second half of the year. He added that if Musk remains at the helm, Tesla is positioned for accelerated growth over the next few years.
Tesla Banks on Robotaxis and Optimus for Future Growth
Tesla has dismissed Wall Street’s concerns about declining sales and shrinking profit margins.
The company has particularly emphasized the growth potential of its Full Self-Driving (FSD) software and the Optimus humanoid robot. On June 22, Tesla launched its long-awaited autonomous robotaxi service in Austin, Texas. Although starting with fewer than 20 vehicles and a 4.20 USD fare, Tesla is confident that this service could be a game-changer, potentially boosting the company’s market cap to between 5 trillion USD and 10 trillion USD in the future.
Tesla’s stock has been on a rollercoaster ride in recent months.
Following Trump’s election, Tesla shares nearly doubled in a matter of weeks, pushing the company’s market cap to 1.5 trillion USD by mid-December. However, the stock retreated to pre-election levels shortly after Trump’s inauguration. Currently, Tesla’s market capitalization stands at approximately 1.017 trillion USD.
