Tesla reported a decline in sales for the second consecutive quarter, marking the first time in the company's history that such a trend has occurred. Sales for the quarter totaled nearly 444,000 cars, reflecting a 5% decrease from the previous year. This follows an 8.5% drop in the first quarter. The dip in sales highlights the intensifying competition in the electric vehicle market, where overall sales are growing but at a slower pace than anticipated.
Despite the decline, Tesla's sales surpassed analysts' expectations of 436,000 cars and allowed the company to maintain its lead in global sales of purely electric vehicles, edging out Chinese automaker BYD. BYD, however, reported a 21% increase in EV sales compared to the previous year, narrowing the gap with Tesla. The better-than-expected sales results boosted Tesla's shares by over 9% in midday trading.
Tesla has been facing pricing pressures from established automakers transitioning to EVs, such as BYD, Volkswagen, General Motors, and Ford. To support sales, Tesla has been reducing prices for over a year, although this strategy has squeezed profit margins. The company is set to announce its second-quarter financial results on July 23.
General Motors reported a 40% surge in US EV sales compared to a year ago, reaching approximately 22,000 units, a record for the automaker. Despite discontinuing its top-selling American EV, the Bolt, GM saw strong sales for its Blazer EV and Cadillac Lyriq models. Toyota also experienced a significant increase in US EV sales, rising by 301% to 11,600 units.
While Tesla's sales figures do not specify sales by country, it is estimated that a significant portion of its revenue comes from US sales. The company's aging vehicle lineup, with models like the Model S and Model Y having limited redesigns since their launch, may be contributing to the sales decline amidst growing competition.
Furthermore, Tesla's Cybertruck production has faced challenges, with multiple recalls issued due to issues with the vehicle's windshield wiper, plastic trim, and accelerator pedal. These recalls have impacted a substantial portion of the Cybertrucks sold to customers.
