Tesla reports lower car sales and extends its slump

Tesla reported a significant drop in car sales on Wednesday, extending the difficult period amid escalating CEO Elon Musk’s political activity and escalating backlash.

The EV maker reported 384,122 deliveries in the second quarter, down 13.5% from the same period last year. The shares recovered after disclosure. This was better than some of the major predictions these days.

Global sales reflect the more contested nature of the EV market once dominated by Tesla, but now features BYD and other low-cost Chinese companies as well as legacy western automakers such as General Motors, Toyota and Volkswagen.

But Musk’s political activism on behalf of the right-wing figure targeted the company for boycotts and demonstrations, weighing sales.

Recently, Musk revived a feud with US President Donald Trump, pulling down Tesla stocks on Tuesday.

According to S&P Capital IQ, the figures will bring about another poor revenue when Tesla reported its results on July 23rd.

Tesla is facing questions about a shortage of new retail automotive products to surprise consumers after it turns out that mask futuristic cybertruck has become polarized.

Analysts are looking for updates on the condition of the new product after Tesla said in April it was planning a “more affordable model” for the first half of 2025.

According to a news report, the company has begun distribution of improved Model Y in some markets.

Tesla launched the long-debated Robotaxi venture in Austin, the capital of Texas, lending momentum to Musk’s company branding as the forefront of autonomous and artificial intelligence technology.

However, reports say the reckless movement of self-driving cars prompted surveillance from US regulators.

Heading towards Wednesday’s data release, notes from JPMorgan Chase and Deutsche Bank predicted a significant drop in second quarter delivery, particularly citing poor figures in Europe.

JP Morgan Note is particularly bearish, with its December stock price target of $115, down more than 60% from current levels, citing the expected resistance from the elimination of U.S. tax credits on EVs under Trump’s Signature Domestic Policy Act passing Congress.

Following the results, Morningstar said in a memo that Tesla would not see “meaning delivery growth without new, low-cost vehicles targeting the affordable market.”

In the second quarter in a row, Tesla “produced more vehicles than raised concerns about demand and inventory levels.

But Wedbush’s Dan Ives said Wednesday’s “Better Fear” report set a stage of growth.

“We believe that Tesla is on the path to an accelerated path of growth over the coming years, with masks continuing to lead driver seats and Tesla expects to deliver later in 2025 following the Model Y Refresh Cycle,” Ives said.

Political wildcards

There are wild cards left. How will Musk’s changing relationship with Trump affect Tesla?

Musk has donated more than $270 million to Trump’s presidential campaign, a major battlefield state bernstorming for Republicans.

After the election, he oversaw the launch of the government’s Ministry of Efficiency. This is a controversial initiative that eliminates thousands of government jobs that Doge is considered part of a pattern of waste, fraud and abuse.

But Musk broke with Trump over the White House flagship tax and spending bill. Musk calls it “totally insane and destructive.”

In response, Trump threatened to target Musk’s business empire, deporting the South African-born billionaire and warning him to plummet Tesla’s shares.

“This famous feud poses political risk,” Briefing.com said in a memo on Tuesday.

“The personal nature of the conflict, amplified by Trump’s comments, implied a reliance on Tesla’s subsidies for survival, sparking fears about wider policy changes targeting the Musk’s business empire.”

Tesla shares rose 4.7% early on Wednesday.

©2025 AFP