I just had to inform you of the news about Tesla, and it is not good. The company just announced a huge drop in sales, and there are a couple of very significant reasons why it happened. I’ll be explaining, so it will make sense.
Tesla’s sales just plummeted through the floor
Tesla has a trend of rapid growth, but this time it plummeted:
- Tesla sold 384,122 vehicles in the last quarter.
- That’s about 60,000 fewer vehicles it sold during the same time last year—a 13.5% fall-off.
- It’s Tesla’s largest year-over-year drop ever.
But compared to the first quarter of 2025, sales were 14.1% higher, which is at least one small silver cloud.
Silver lining amid the downturn
You would be amazed at this, but the shares of Tesla rose by almost 4% after the publication of the sales figures.
Why?
Because the figures weren’t as bad as some of the forecasters had been anticipating, shareholders had braced themselves for a more severe fall, and therefore, the smaller fall than expected was perceived as a “triumph.”
Elon Musk’s politics are damaging the brand
One huge reason Tesla is flailing is public outcry against Elon Musk’s politics:
- His support of the Trump administration has led to protests and boycotts.
- Dealerships have been picketed, and even Tesla property vandalized.
- Both in the U.S. and Europe, indications are clear that Musk’s politics are pushing customers away from the brand.
While total electric vehicle (EV) sales are up, there are declining Tesla sales for the firm in major markets.
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More competition is only making matters worse
Tesla is also facing increasing competition:
- Traditional automakers like Ford, GM, and Volkswagen are switching to more electric vehicles.
- Chinese EV manufacturers, especially BYD, are shaking up the market.
- In fact, BYD recently sold 1 million EVs during the first half of this year alone, while Tesla sold only 721,000.
Tesla will lose its status as the world’s largest EV maker, and that’s without BYD selling even a single vehicle in the U.S. at all.
A thousand-year streak for Tesla: Sales are backtracking
For almost all of recent history, sales at Tesla were virtually always rising, quarter to quarter. That’s now turned around:
- It’s the second straight quarter where sales fell by at least 13%.
- In 2023, Tesla experienced its first-ever year-over-year decline in sales.
- Before that, the only year Tesla declined was in 2020, when there were COVID-19 factory shutdowns.
Stock volatility: The rollercoaster ride
Tesla’s stock has enjoyed a rollercoaster ride recently:
- Shares nearly doubled after the election, purely on speculation that Musk was politically savvy.
- But shares dropped over 50% by mid-April.
And then things picked up:
- Musk said he would avoid the Trump administration to focus on Tesla.
- Robotaxi service announcements in the future also helped drive the stock.
Stocks have increased 35% since then from their April low.
Conclusion
So, sure, Tesla is still a giant in the EV world, but it is battling real issues—both from external sources like competition and internal sources like brand reputation and leadership choices.
If you’re along for the ride with the market or think you might want to invest in a Tesla, it’s enjoyable to see the company weather this trough. Feel free to let me know if you’d like a brief rundown of what it’s all about to investors—I’m here to help.
