Tesla Experiences Significant Drop in Vehicle Deliveries as Musk Controversy Takes Its Toll

Tesla’s latest quarterly report reveals a substantial decline in vehicle deliveries, marking what could become its second consecutive annual sales decline. The electric vehicle manufacturer delivered 384,122 vehicles in the second quarter, representing a 13.5% decrease from 443,956 units in the previous year.

Market analysts had projected deliveries of approximately 394,378 vehicles, according to estimates from Visible Alpha, though some forecasts dipped as low as 360,080 units. The company’s share value has diminished by 25% this year, primarily attributed to brand damage in European markets and mounting concerns over CEO Elon Musk’s political affiliations.

The decline is particularly noteworthy given Musk’s April statement suggesting sales had rebounded. Despite efforts to stimulate demand through a Model Y crossover refresh, the redesign temporarily halted production and caused potential buyers to delay purchases.

The company’s ambitious robotaxi service, launched in Austin, Texas, has faced scrutiny from regulators. The limited pilot programme, operating with only twelve vehicles and mandatory safety monitors, has drawn investigation from the US National Highway and Transportation Safety Administration.

To achieve Musk’s growth targets for the year, Tesla would need to deliver more than one million units in the second half – a challenging feat even considering typically stronger second-half performance. The anticipated launch of a more affordable vehicle variant, essentially a simplified Model Y, may help boost sales, though Wall Street analysts remain sceptical about averting a second yearly decline.

The ongoing political controversy surrounding Musk, particularly his alignment with the Trump administration’s cost-cutting initiatives, has significantly impacted Tesla’s market position. A public falling out between Trump and Musk in early June resulted in Tesla losing approximately £150 billion in market value, highlighting the delicate balance between corporate leadership and political associations.