In recent news, Tesla sales have fallen for the second straight quarter, marking the first time in the company’s history that sales have declined from the previous year for two quarters in a row. The sales for the quarter came in at nearly 444,000, down about 5% from a year ago, which is less than the 8.5% drop seen in the first quarter. This decline in sales highlights the increased competition within the market for electric vehicles, as the pace of industrywide growth has been lower than expected.
Interestingly, Tesla’s sales numbers were stronger than the forecast of 436,000 from some analysts, allowing the company to beat out Chinese automaker BYD to retain the lead position in global sales of purely electric vehicles. BYD reported EV sales of 426,000, which is 21% more than a year ago and shows the company closing the gap on Tesla. In the fourth quarter, BYD briefly passed Tesla in global EV sales.
Despite the decline in sales, Tesla’s better-than-expected numbers were enough to lift shares of the company by more than 4% in early trading. However, shares are still down more than 10% year-to-date. Tesla has been facing increased competition from established automakers, such as BYD in China, Volkswagen, GM, and Ford in Europe and North America, leading to price cuts to support sales but squeezing profit margins.
The declining sales also highlight the impact of competition on Tesla’s sales, as the company’s lineup of vehicles is relatively old. The Cybertruck pickup, which started production late last year, has faced questions about its build quality, resulting in three recalls due to various problems. As Tesla prepares to report its second-quarter financial results, investors and analysts will be closely watching to see how the company navigates these challenges.
