Tesla sales fall again as more automakers crowd electric vehicle market | CNN Business (2024)

Tesla sales fall again as more automakers crowd electric vehicle market | CNN Business (1)

Tesla Model Y vehicles sit on the lot for sale at a Tesla store in Austin, Texas.

New York CNN

Tesla sales fell for the second straight quarter. It marks the the first time in the company’s history that sales declined from the previous year for two quarters in a row.

Tesla’s sales for the quarter came in at nearly 444,000 cars, down about 5% from a year ago. That’s less than the 8.5% drop the company saw in the first quarter. But Tesla, and its share price that has made CEO Elon Musk one of the wealthiest people in the world, has been built on a history of growing auto sales.

The drop in sales demonstrates the increased competition within the market for electric vehicles. While overall sales of EVs continue to grow, the pace of industrywide growth has proved to be less than expected, resulting in investors clamoring for each car sold to be more profitable than before.

Before this year there was only one quarter in Tesla’s history — at the peak of the pandemic when factories were closed by stay-at-home orders — that the company had reported a year-over-year decline in sales.

There was some good news in the sales numbers though. Sales were stronger than the 436,000 forecast from some analysts. And it was enough to beat out Chinese automaker BYD to retain the lead position in global sales of purely electric vehicles.

On Monday, BYD reported EV sales of 426,000. That is 21% more than a year ago, as BYD continues to close the gap on Tesla. In the fourth quarter BYD briefly passed Tesla in global EV sales.

BYD electric cars waiting to be loaded onto a ship. STR/AFP/AFP/Getty Images Related article Elon Musk once mocked China’s BYD. Now it’s running circles around Tesla

But the better-than-expected Tesla sales were enough to lift shares of Tesla (TSLA) by more than 9% in midday trading. Shares are still down about 8% year-to-date, however, even with Tuesday’s jump.

Tesla has been steadily cutting prices for more than a year now in the face of growing competition from established automakers, which are shifting from petroleum-powered automobiles to EVs, such as BYD in China, as well as Volkswagen, General Motors and Ford in Europe and North America. Those price cuts have helped to support sales but have squeezed profit margins. Tesla announced Tuesday that it will report its second quarter financial results on July 23.

GM did not report global sales, but it did report US sales figures Tuesday, and its US EV sales jumped 40% compared to a year ago, and 34% from its first quarter total to about 22,000, a record for the automaker. Its overall sales were essentially flat, rising 0.6%, partly hit by the problem with the hack of the CDK platform used by many of its dealers. The strong EV sales were balanced by a slight drop - about 0.3% - in sales of traditional gasoline powered cars.

This occurred even as it discontinued what had been its best-selling American EV, the Bolt, which had sales fall 90% from the 14,000 it sold a year ago. But jumps in sales for its Blazer EV and Cadillac Lyriq more than made up for the lost Bolt sales. It continues to offer new EV versions and will have 10 in the US dealerships by the end of the year.

Toyota’s US EV sales soared even more, rising 301% to 11,600. But even though they are both grabbing more EV market share, they account for only a fraction of Tesla’s sales.

While Tesla does not break out its sales by country in its quarterly sales statement, its filings suggest that somewhere between 43% to 49% of its automotive sales revenue comes from US sales, suggesting about 190,000 of the cars it delivered in the quarter went to US customers. GM and Toyota together have only about one-sixth of that total.

But the declining sales show that the increased competition is having an impact on its sales. It has a very old lineup of vehicles for the most part. The Model S, its flagship sedan, has not had a clean-sheet re-design since its launch in 2012. The Model Y, its bestselling model has been little changed since its unveiling in 2019. And the Model Y is one of its newer models.

Late last year it started production of its Cybertruck pickup, and the vehicle has seen severe questions about its build quality.

Last week Tesla announced the third and fourth recalls of the Cybertruck due to problems with its huge single windshield wiper and a piece of plastic trim along the edge of the truck bed that can detach from the truck while being driven. Virtually all of the 12,000 Cybertrucks that have been sold to customers are included in the recall. In April there was another recall due to an accelerator pedal that could stick down.

CNN’s Laura He and Peter Valdes-Dapena contributed to this report.

This story has been updated with additional reporting and context.

Tesla sales fall again as more automakers crowd electric vehicle market | CNN Business (2024)
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