Tesla reported a steep year-over-year sales drop, delivering only 384,122 vehicles in the latest quarter—a 13.5% decrease compared to the same period last year. This marks the largest annual decline in the company’s history. However, there was a 14.1% improvement from the previous quarter, slightly softening the blow. Despite the drop, the sales figures surpassed some analysts’ worst projections, prompting a nearly 4% rise in Tesla’s stock price during Wednesday trading.
Political Backlash and Rising Competition Deepen Tesla’s Struggles Across Global EV Markets
CEO Elon Musk’s political entanglements, especially his involvement with the Trump administration, have sparked backlash against Tesla. Protests erupted at showrooms across the U.S. and Europe, and some facilities experienced vandalism. Although Tesla doesn’t release regional sales data, available registration figures indicate that sales have plunged in both the U.S. and Europe. This decline is particularly striking given that electric vehicle sales continue to rise in those regions overall.
Tesla’s Sales Plunge Signals Growing Trouble as Politics, Rivals, and Market Shifts Erode MomentumTesla is also facing mounting competitive pressure from both established Western automakers and emerging Chinese EV brands. In China—Tesla’s second-largest market—competition has been particularly fierce, contributing to its sales slump. Chinese automaker BYD is on pace to dethrone Tesla as the world’s top EV seller, having reported 1 million EVs sold in the first half of the year, far ahead of Tesla’s 721,000.
Tesla Faces Prolonged Sales Decline Amid Market Volatility and Leadership Challenges
Once synonymous with rapid growth, Tesla is now experiencing a prolonged sales downturn. The latest report marks the second consecutive quarter of double-digit sales declines and follows the company’s first annual decline reported last year. Before this, Tesla had only posted one quarterly drop in sales back in 2020 due to pandemic-related disruptions.
Tesla’s stock has been highly volatile in recent months. It surged after the 2024 election, fueled by investor optimism about Musk’s influence in the Trump administration, only to lose more than 50% by April 2025. However, the stock began rebounding following Musk’s exit from politics and news of an upcoming robotaxi launch. This combination of leadership redirection and product innovation has helped Tesla shares gain 35% since April, offering a glimmer of optimism amid ongoing challenges.
