Tesla has experienced a record decline in sales, with a notable drop of 13.5 per cent, equating to almost 60,000 fewer vehicles sold compared to the previous year. In total, Tesla sold 384,122 cars during the quarter, marking the largest year-over-year decrease in the company’s history. However, sales did increase by 14.1 per cent from the first quarter.
Interestingly, despite this significant fall in sales, Tesla’s stock saw a nearly 4 per cent rise after the announcement, as the results were better than some analysts had predicted. The company’s struggles are attributed to various factors, including brand damage related to CEO Elon Musk’s political involvement and intensified competition within the electric vehicle (EV) market.
Musk’s controversial political activities, particularly his ties to the Trump administration, have incited protests at Tesla locations in the US and Europe, including instances of vandalism towards its vehicles. While Tesla does not provide sales figures by region, registration data indicates a sharp decline in sales within both the US and European markets.
Additionally, the company faces increased competition not only from established Western automakers but notably from Chinese manufacturers, which has adversely affected Tesla’s market share in China—an essential territory for both EVs and overall automotive sales. China has historically been the second-largest market for Tesla, following the US, but if trends continue, Tesla risks losing its position as the world’s leading EV manufacturer to Chinese automaker BYD. While BYD has not yet entered the US market, it has managed to significantly boost its sales, recently reporting over one million pure EVs sold in the first half of the year, far surpassing Tesla’s approximately 721,000 sales thus far in 2023.
This competition, particularly from BYD, poses a significant challenge to Tesla, which has dominated annual EV sales in previous years but is on track to be overtaken this year. The coming months will be crucial for Tesla as it navigates these challenges in a rapidly evolving automotive landscape.