Tesla just made history with its latest quarterly delivery numbers—and not in a good way. The electric vehicle maker announced today (July 2) that it delivered 384,122 vehicles globally between April and June, marking a record 13.5 percent year-over-year decline. It’s the second consecutive quarter of annual delivery drops for the Elon Musk-led company, which continues to grapple with rising competition, weakening demand and mounting political backlash.
Although the delivery numbers fell short of Wall Street’s expectations, the results weren’t as bleak as some analysts had feared. Tesla shares rose 5 percent in trading today.
Of the vehicles delivered last quarter, 373,728 were Model 3 and Model Y cars, while 10,394 were other models. In the previous quarter, Tesla delivered 386,810 vehicles, down 13 percent year-over-year. The company blamed a redesign of the Model Y that prompted temporary factory shutdowns and production delays.
Tesla’s refreshed Model Y, which began deliveries in March, has yet to boost the company’s performance in key markets like Europe. In May, Tesla’s sales in the region declined for the fifth straight month, dropping 28 percent year-over-year. Meanwhile, Chinese rivals such as BYD have continued to gain ground, thanks to a mix of aggressive pricing and rapid technological innovation.
Political challenges loom in the background
Compounding Tesla’s business challenges are Musk’s political entanglements. His involvement with the Trump administration’s Department of Government Efficiency (DOGE), along with vocal support for far-right parties across Europe, has triggered widespread backlash, prompting Tesla investors to pressure Musk to choose between politics and the company. In April, he appeared to side with Tesla, announcing plans to step back from political engagement and refocus on the automaker.
But tensions have resurfaced. Musk’s recent criticism of Trump’s newly passed tax-cut bill led the President to threaten the removal of federal subsidies for Musk’s companies. The announcement rattled investors, sending Tesla shares down 5 percent yesterday.
Despite the headwinds facing Tesla, many analysts remain focused on the company’s long-term potential, which they believe lies not in its current vehicle sales but in its ambitious push into self-driving technology and robotics. Last month, Tesla held a relatively smooth robotaxi launch event in Austin, which impressed Wall Street and helped propel its stock upward.
According to Dan Ives, an analyst at Wedbush Securities, as much as 90 percent of Tesla’s future valuation will be tied to autonomous vehicles and robotics. “Tesla’s future is in many ways the brightest it’s ever been, in our view, given autonomous [driving], full self-driving, robotics and other technology innovations now on the horizon,” Ives wrote in a client note today. But he cautioned that for Tesla to realize that potential, “Musk needs to focus on driving Tesla—not on putting his political views first.”