DETROIT (AP) — Tesla’s global sales fell for the second straight quarter despite price cuts and low-interest financing offers, another sign of weakening demand for the company’s products and electric vehicles overall.
The Austin, Texas, company said Tuesday that it sold 443,956 vehicles from April through June, down 4.8% from 466,140 sold the same period a year ago. But the sales were better than the 436,000 that analysts had expected.
The better-than-expected deliveries pushed Tesla’s stock up 10% Tuesday. The stock is down about 7% so far this year, but it has nearly erased larger losses from prior months. Tesla shares had been down more than 40% earlier in the year, but are up more than 60% since hitting a 52-week low in April.
Demand for EVs worldwide is slowing, but they’re still growing for most automakers. Tesla, with an aging model lineup and relatively high average selling prices, has struggled more than other manufacturers. Still it retained the title of the world’s top-selling electric vehicle maker.
For the first half of the year, Tesla sold 830,766 electric vehicles worldwide, handily beating China’s BYD, which sold 726,153 EVs.
Tesla also sold over 33,000 more vehicles during the second quarter than it produced, which should reduce the company’s inventory on hand at its stores.
Tesla’s sales decline comes as competition is increasing from legacy and startup automakers, which are trying to nibble away at the company’s market share. Most other automakers will report U.S. sales figures later Tuesday.
Tesla gave no explanation for the sales decline, which is a harbinger of what to expect when it posts second-quarter earnings on July 23.
Nearly all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 21,551 of its more expensive models that include X and S, as well as the new Cybertruck.
The sales decline came despite Tesla knocking $2,000 off the prices of three of its five models in the United States in April. The company cut the prices of the Model Y, Tesla’s most popular model and the top-selling electric vehicle in the U.S., and also of the Models X and S.
The April cuts reduced the starting price for a Model Y to $42,990 and to $72,990 for a Model S and $77,990 for a Model X. Last week, Tesla lopped $2,340 off the $38,990 base price of some newly revamped Model 3s that were in the inventory shipped to its stores.
In addition, Tesla in May offered 0.99% financing for up to six years on the Model Y. In June, it offered interest as low as 1.99% for three years on the rear-wheel-drive Model 3. Typical new-vehicle interest rates average just over 7%, according to Edmunds.com.
Also during the quarter, Tesla knocked roughly a third off the price of its “Full Self Driving” system — which can’t drive itself and so drivers must remain alert and be ready to intervene — to $8,000 from $12,000, according to the company website.
Jessica Caldwell, head of insights for Edmunds.com, said Tesla is having trouble in a market where most early adopters already have EVs, and mainstream buyers are more skeptical that electric cars can meet their needs.
Tesla’s “haphazard” price cuts don’t work as well as they once did because consumers now expect them, she said. “We’ve seen the automaker exhaust its bag of tricks by lowering prices and increasing incentives to spur demand without much success in the U.S. market,” Caldwell said.
Also, Tesla’s aging model lineup doesn’t look much different than it did years ago she said. And with price cuts, used Tesla prices tumbled. Anyone wanting a Tesla can get a far better deal buying a used one, Caldwell said.
Caldwell doesn’t see any big catalyst this year that would boost Tesla sales unless gasoline prices spike, and she said Musk’s shift to the right since taking over Twitter has hurt the brand’s image.
Wedbush analyst Dan Ives wrote in a note to investors Tuesday that second-quarter sales were a “huge comeback performance” for Tesla. “In a nutshell, the worst is in the rearview mirror for Tesla,” he wrote. The company, he wrote, cut 10% to 15% of its workforce to reduce costs and preserve profitability. “It appears better days are now ahead as the growth story returns,” Ives wrote.
In its letter to investors in January, Tesla predicted “notably lower” sales growth this year. The letter said Tesla is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the Model 2, a new, smaller and less expensive vehicle with an unknown release date.
Tesla is scheduled to unveil a purpose built robotaxi at an event on Aug. 8.
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This story has been corrected to fix Tesla’s first half global sales number, which was 830,966 not more than 910,000. It also has been corrected to read that Tesla’s second-quarter sales number was 443,956, not from 436,956.
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Rephrased content:
Tesla reported a decline in global sales for the second consecutive quarter despite efforts such as price cuts and low-interest financing offers, reflecting a decrease in demand for the company’s products and overall electric vehicles. The company revealed that it sold 443,956 vehicles from April to June, a 4.8% drop compared to the same period last year. However, this figure exceeded analysts’ expectations of 436,000 units.
The better-than-anticipated deliveries caused Tesla’s stock to rise by 10% on Tuesday. Although the stock is down by approximately 7% year-to-date, it has nearly recovered from significant losses earlier in the year. Tesla shares had previously declined by over 40%, but have now surged by more than 60% since hitting a 52-week low in April.
While demand for electric vehicles (EVs) is slowing globally, most automakers are still experiencing growth. Tesla, facing challenges due to an aging model lineup and higher average prices, has encountered more difficulties compared to other manufacturers but retained its position as the world’s leading electric vehicle seller. In the first half of the year, Tesla sold 830,766 electric vehicles worldwide, surpassing China’s BYD, which sold 726,153 EVs.
Despite the sales decline, Tesla managed to sell over 33,000 more vehicles in the second quarter than it produced, which is expected to reduce the company’s inventory levels. This drop in sales happens as competition in the electric vehicle market intensifies from both traditional and new automakers.
Tesla did not provide a specific reason for the sales dip, which foreshadows what could be revealed in its second-quarter earnings report on July 23. The majority of Tesla’s sales were from the Models 3 and Y, with only 21,551 units sold from its higher-priced models like the X, S, and Cybertruck.
The company had lowered the prices of several models in the United States in April and also offered attractive financing options. Additionally, Tesla reduced the price of its “Full Self Driving” system during the quarter. However, despite these efforts, Tesla’s sales have not significantly increased, with analysts noting challenges in a market where early adopters already own EVs and mainstream buyers remain skeptical about electric cars.
Analysts like Dan Ives from Wedbush expressed optimism, viewing the second-quarter sales performance as a significant improvement for Tesla. Ives indicated that the company had reduced its workforce by 10% to 15% to cut costs and maintain profitability. Moving forward, Tesla is set to introduce a purpose-built robotaxi at an event on August 8 and is awaiting growth from the global expansion of its existing models and an upcoming smaller, more affordable vehicle named the Model 2.
