The electric vehicle market is witnessing a significant shift, and Tesla, a key player in this industry, is facing challenges that have led to a decline in sales. In the second quarter of this year, the company reported delivering 384,122 vehicles, marking another disappointing performance as it struggles to regain momentum in sales comparable to the levels seen in 2023.
This figure reflects a 13.5% decrease compared to the same quarter in 2022, raising concerns about Tesla’s ability to meet its sales targets for the year. If this trend continues, it could result in a consecutive year of declining sales, a stark contrast to the company’s previous claims of achieving a 50% annual growth rate in deliveries.
The sales figures for this quarter were only marginally better than those from the first quarter, which was the company’s worst performance in over two years. This period also marked the first full quarter of operations since the CEO became involved in the administration, which sparked nationwide protests against the company.
The CEO attributed the lackluster sales in the first quarter to the temporary shutdown of production lines across all factories to prepare for the launch of the upgraded Model Y. While there were no major production changes planned for the second quarter, reports indicated that some employees on the Model Y and Cybertruck lines were instructed to take a few days off in late May.
The financial repercussions of this challenging quarter will be disclosed on July 23, when the company releases its official earnings report.
Recently, the CEO made headlines by terminating the employment of a long-time associate who managed both manufacturing and sales in the U.S. and Europe. With the CEO now able to devote more time to the company, Tesla has introduced a limited version of its long-anticipated Robotaxi service in Austin, Texas. Furthermore, the CEO is set to take over the sales responsibilities previously held by the terminated executive.
Other manufacturers in the electric vehicle sector are also facing difficulties, with one major automaker reporting a 31% decline in electric vehicle sales year-over-year in the U.S. Tesla’s figures, however, encompass global sales. Even brands like Hyundai and Kia, which initially thrived in the EV market, experienced sales drops in the second quarter. In contrast, General Motors has bucked this trend, achieving growth in U.S. EV sales thanks to a range of new and enhanced models.
Tesla has employed various strategies to boost sales over the past two years, including significant price reductions both domestically and internationally. The company has also initiated several low-interest rate promotions and made minor enhancements to its vehicle lineup, with the Model Y SUV receiving one of the most noticeable updates.
In recent quarters, Tesla has hinted at developing “more affordable” models, which are expected to be simplified versions of the Model Y and Model 3 sedans. While the company promised that production would commence in the first half of this year, it has not provided updates on the status of these models. The CEO had previously abandoned plans for a $25,000 vehicle based on the next-generation platform that powers Tesla’s dedicated robotaxi, which remains in the prototype stage.