Tesla is headed for a second straight year of slumping sales after a poor second quarter.
What’s happening?
Reuters reported the company was “dragged down by CEO Elon Musk‘s right-wing political stances and an aging vehicle lineup that has turned off some buyers.”
The news agency said that because tariffs, economic uncertainty, and the coming loss of the federal EV subsidy with the Trump administration’s One Big Beautiful Bill Act, it would be tough for Tesla to deliver the 1 million electric vehicles in the second half of the year needed for the company to overcome the deficit.
Musk said in April that a dire start to the year was in the rearview mirror, but Tesla reported a 13.5% decline in Q2, which was below analyst expectations, per Reuters. The new Model Y and improving sales in China prevented a worse outlook.
Why is this important?
While Tesla’s fall is a huge talking point because of its longstanding position atop the EV heap, other companies — and the EV market in general — are rising.
Over 1 in 4 cars sold this year will be EVs, and more makes and models are giving consumers better options, including on the resale market.
Switching to an electric vehicle from a gas-powered one can save you $1,500 a year on gas and maintenance, and EVs have just about reached price parity with their counterparts. The Inflation Reduction Act tax credit of up to $7,500 will end Sept. 30, but state and dealer incentives may remain.
What’s being done about Tesla’s decline?
Reuters reported that Tesla is also being undone by its lack of long-promised cheap models, though it is offering financing deals and steep discounts. The Cybertruck has been another problem for the company, whose driver assistance technologies are under federal investigation and which has been panned for its shabby rollout of robotaxis.
BYD is one of the Chinese EV makers carving inroads in the space, and a handful of U.S. manufacturers are looking to dethrone Tesla domestically.
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