Tesla’s sales, which faced a significant decline earlier this year, are now showing signs of recovery. The electric car manufacturer, led by Elon Musk, delivered nearly 444,000 vehicles in the three months ending June 30, a more than 14% increase from the previous quarter. This figure exceeded most analysts’ expectations, although it was still nearly 5% lower than the same period in 2023.
Tesla has been grappling with a slowdown in demand, influenced by high borrowing costs and increasing competition. In response, the company has repeatedly cut prices and introduced low-cost borrowing plans to attract customers, with limited success. Earlier this year, Tesla announced plans to lay off more than 10% of its workforce as sales declined in the first half of the year. Supply shortages caused by shipping disruptions in the Red Sea and an alleged arson attack at its German factory also contributed to the poor performance.
Analysts suggest that Tesla needs to update its vehicle lineup to fend off competitors. Although the company launched its Cybertruck last year, it remains a minor segment of its business. The mainstream Model 3 sedan, introduced in 2017, is due for a refresh. Despite these challenges, Musk envisions a bright future for Tesla, driven by advancements in self-driving technology and automation.
Globally, the electric vehicle market continues to grow, with over one in five cars sold this year expected to be electric. In China, nearly half of all cars sold will be electric, and in Europe, roughly a quarter, according to the International Energy Agency (IEA).
Wedbush Securities analyst Dan Ives believes the worst is behind Tesla, citing improvements in China, where the government recently announced incentives for trading in older cars. He anticipates Tesla’s upcoming presentation on robotaxis in August will spark new growth. Following the news, Tesla shares rose more than 6% in morning trade on Tuesday.
