Tesla has announced a significant drop in vehicle deliveries for the second quarter of 2025. The company delivered 384,122 vehicles globally, a 13.5% drop from the 443,956 units delivered during the same period in 2024. This marks the second straight quarter of falling year-over-year sales.
A major reason behind this decline is the backlash surrounding Elon Musk’s political involvement. His role in the Trump administration’s Department of Government Efficiency (DOGE) angered many of Tesla’s loyal customers. As a result, the #TeslaTakedown movement gained momentum, with some customers damaging Tesla vehicles and chargers, or pledging to sell their cars.
Tesla is also facing increasing pressure from global EV competitors. Brands like BYD, Volkswagen, BMW, and GM are offering more affordable and feature-rich electric vehicles. In key markets like China and Europe, Tesla’s market share is being chipped away by these rivals.
Another concern is the possible removal of the U.S. $7,500 EV tax credit. If eliminated, analysts believe Tesla could lose up to 10–12% of its sales in the U.S., as affordability would take a major hit. This policy change could make Tesla vehicles too expensive for many buyers.
Tesla has tried to fight back by launching a refreshed Model Y and a lower-priced Cybertruck. But despite these efforts, the delivery numbers continue to fall. Interestingly, Tesla’s stock rose 3–5% after the Q2 report. Investors were relieved the results weren’t worse, and some were excited about new technology.
A bright spot for the company is China. Tesla’s Shanghai plant is showing signs of a rebound, with demand for the refreshed Model Y beginning to gain momentum. However, this growth may not be enough to balance the global decline in overall sales.
Tesla’s finances are also under pressure. In Q1 2025, the company reported a massive 71% drop in profits. This suggests the delivery decline is deeply affecting Tesla’s earnings and could lead to more cost-cutting ahead.
Looking ahead, Tesla is implementing strategies to regain momentum, including the planned launch of a more affordable Model Y variant by mid-2025. It also recently launched a robotaxi service in Austin, which could open up a new source of income.
Tesla’s recovery will likely depend on three things: the success of its new low-cost models, the robotaxi rollout, and its ability to win back customer trust. Rebuilding its image after political controversy may be the biggest challenge of all.
The company is set to release its full Q2 earnings report on July 23. That report will provide deeper insight into whether Tesla is turning a corner or heading further into trouble.
