• Tesla sold 384,122 vehicles in Q2 2025, marking a 13% decrease from the previous year.
• The decline is attributed to backlash against CEO Elon Musk's political views and increasing competition.
• Tesla’s entry into robotaxi services is seen as a potential future growth area.

Tesla reported a significant drop in quarterly deliveries, with 384,122 vehicles sold in the second quarter of 2025, reflecting a 13% decrease from 443,956 units sold during the same period last year. Analysts had forecasted deliveries between 360,080 and 394,378 units, highlighting that this reduction is partially due to the backlash against CEO Elon Musk's political affiliations, particularly with far-right figures and the Trump administration, which has negatively impacted consumer perceptions and demand, according to Reuters and CBS News.

Despite a challenging market environment, where Tesla's vehicles face increased competition from other manufacturers, the sales of its more affordable Models 3 and Y reached 373,728 units, beating Wall Street expectations of approximately 356,000. This slight positive has offered some support to Tesla's stock price, which rose around 3% in early trading as market fears proved less severe than anticipated, according to SCMP, India Times, and Channel News Asia.

Market analysts express concern over the long-term effects of Musk's political activities on Tesla's brand, suggesting that the reputation damage could lead to permanent loss of some customers, especially as they associate the brand with his controversial views. Reports indicate that Tesla's sales in Europe plummeted by nearly 50% in April, even as the overall EV market continues to grow, demonstrating the challenges the company faces, as stated by LA Times and Reuters.

Tesla continues to bet heavily on innovation and plans to launch a cheaper vehicle, anticipated to be a stripped-down Model Y, although production delays mean it will not be available until later in the year. The company is also actively pursuing advancements in autonomous vehicle technology, recently starting limited testing on a robotaxi service in Austin, Texas. However, expectations remain cautious, as analysts predict another annual sales decline, indicating the company would need to deliver over a million units in the second half of the year to regain growth, according to CBS News and LA Times.