Tesla’s horror year in numbers
Investors fear Tesla may be ‘at bottom’ as new car sales plummet and profits may fall by up to 20 per cent
Elon Musk’s Tesla woes have continued to pick up speed as their worldwide vehicle sales fell 13.5 per cent.
The EV car company delivered 384,122 vehicles globally in the last three months, down from 443,956 units a year ago.
The figures contradict Elon Musk’s own claim that Tesla’s car business had recovered.
“We’re at the bottom here,” Gene Munster, managing partner of Deepwater Asset Management, told Bloomberg.
Tesla told investors earlier this year that new vehicles, including more affordable models, were due to go into production during the first half of the year.
It released a refreshed version of their popular Model Y SUV in March and a cheaper, pared-down version of the Cybertruck in April.
Other, more expensive models have received updates, but customers are still waiting for the long-promised low-priced, entry-level Model Q electric vehicle.
The decline comes as Tesla faces an onslaught of competition, especially from Chinese EV makers that sell newer and more affordable models.
The car maker also continues to deal with a political backlash against chief executive Musk.
Tesla’s problems have been compounded by an overall decline in EV sales in the US, their main market.
Profits tumble
Total US electric vehicle sales fell almost 7 per cent in the second quarter. Rivals, including Ford and Hyundai, all reported steep drops in EV sales, though GM sales jumped after it released two new models.
The fall has been attributed to wider economic uncertainty as well as threats to phase out key EV incentives under the Trump administration’s sweeping tax bill, including the $7,500 credit (£5,492) on new sales and leases.
Tesla’s profit fell 71 per cent in the first three months of the year. It reported a $409m (£299m) profit primarily because it sold $595m (£435m) in carbon credits to rival car makers.
Analysts have forecast a further sales drop of 10 per cent and a fall in profits of up to 20 per cent when it presents their latest update later this month.
Politics?
Despite quitting his controversial role in charge of cost-cutting efforts at the Department of Government Efficiency at the end of May, investors fear Musk has still not been able to free himself from politics and devote his attention fully to Tesla.
He continues to publicly feud with Donald Trump on social media. In the most recent sparring match this week, he again criticised Trump’s signature “big, beautiful bill”, which looks set to pass into law.
Musk has blasted the bill, calling it fiscally irresponsible and threatening to start a new political party to challenge congressional Republicans who vote for it.
Trump responded with his own threats to use the power of the federal Government to punish his former adviser, telling reporters, “We might have to put DOGE on Elon.”
Reasons to be cheerful?
The outlook is not all bleak. Tesla saw sales rise in China for the first time after eight months of spiralling sales.
Some analysts believe it is evidence that their refreshed Model Y SUV was attracting consumers despite tough competition from more affordable Chinese rivals such as BYD.
Others suggest Tesla is reaping the rewards from their premium, reliable brand image in China, particularly as Chinese customers grow frustrated with local car companies’ sales practices, which include the resale of lightly used vehicles as new.
Equally, while new-car registrations for Tesla models, a reflection of sales, fell 40.5 per cent to 8,729 vehicles across the European Union last month, sales did rise in Norway and Spain last month as some buyers turned to the newly revamped Model Y.
“If Musk continues to lead and remain in the driver’s seat, we believe Tesla is on a path to an accelerated growth path over the coming years,” US analyst Dan Ives, of Wedbush, said, predicting that deliveries will pick up in the latter half of the year on the new Model Y demand.
Musk will also be hoping that the launch of their robotaxi service in Texas will bring investors comfort, claiming the scheme could one day add $5trn (£3.7trn) – $10trn (£7.3trn) to Tesla’s value.
While it may trail rivals like Waymo, which has hundreds of vehicles on trial across several US cities, Tesla’s more modest 20-vehicle fleet is focused on a part of Austin, Texas, where it offers driverless rides for $4.20 (£3.10).
