Tesla Inc.’s global sales fell for a second consecutive quarter, pushing the carmaker deeper into a deep slump to avoid a consecutive annual decline.
The company delivered 384,122 vehicles during the past three months, down 13% from a year earlier.
Tesla now has to overcome a roughly 110,000-car shortfall in the second half to return to growth this year.
Sales managed to surpass the most pessimistic analysts’ estimates, with the most bearish analysts predicting a more than 20% drop. Tesla shares surged after the report, rising as much as 4% at the open of regular trading on Wednesday.
The figures stand in contrast to Elon Musk’s claim in mid-May that Tesla’s car business had recovered from an early-year slump thanks to his work in the Trump administration. Sales could be further challenged later this year if Congress passes the president’s multitrillion-dollar spending bill, which would eliminate tax credits for EV purchases.
Tesla had hoped to get a boost this quarter from the release of its redesigned Model Y sport utility vehicle, its most important product yet. But the company’s otherwise stale lineup is losing luster relative to offerings from BYD Co. and Xiaomi Corp. in China, while General Motors Co. is gaining ground in the U.S. electric-car market.
Tesla told investors in April that new vehicles, including more affordable models, were on track to go into production during the first half of the year. Affordable new cars didn’t materialize, leading many analysts to speculate they could be delayed.
Most analysts now expect Tesla to report its second consecutive annual decline in vehicle sales. The average estimate of analysts surveyed by Bloomberg is that the company will deliver about 1.65 million vehicles in 2025, down about 8% from 1.79 million last year.
Tesla management in January backed away from its forecast that vehicle business would grow this year, after executives warned in April that they would revisit their outlook when reporting earnings this month.
Musk then told Bloomberg News on May 20 that Tesla’s deliveries had improved, and that the company did not anticipate any significant shortfalls going forward.
“Sales figures are strong at the moment and we don’t see any problems with demand,” the CEO said in an interview at the Qatar Economic Forum.
Musk also shifted investors’ attention away from vehicle sales at the end of the quarter by launching a long-promised driverless taxi service. While Tesla offered rides to only a small group of fans in a restricted area of Austin — and footage of several drives drew scrutiny from federal safety regulators — Tesla shares rose 23% during the three-month period. The CEO is now overseeing more of the company’s car business, as his close confidant Omid Afshar, who was responsible for Tesla’s sales and manufacturing operations in North America and Europe, has left the company.
Tesla’s sales operations in the U.S. and Europe will now report to Musk, while senior vice president Tom Zhu will continue to oversee sales in Asia and handle manufacturing operations globally, Bloomberg reported on Tuesday, citing people familiar with the matter.
