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We’ve been covering Tesla’s sales drops for a while now, and I think the quarterly focus has actually come to obscure how much the EV giant has slid.
No one is talking about Tesla’s targeted 50% growth a year any longer. However, Tesla bulls and fans are generally optimistic about a return to positive trends — there seems to be a constant hope that things are about to turn around. For one reason or another, time after time, the poor results of the past quarter are considered to be unique and short term, with Tesla having a solution up its sleeve that is going to bring back growth in the near future.
This quarter, that may actually be the case, since the expiring $7,500 US tax credit for EVs is leading to many rushed purchases and the company also just launched a new version of the Model Y in China that suits that market well (the Model Y L). However, can those things fully counteract other trends, and can Tesla get back to previous volumes beyond this quarter?
Well, Tesla is actually facing very different challenges and has different benefits in different markets. The USA is much different from Europe which is much different from China. Focusing on the US market for the time being, how far have the brand’s sales actually dropped? That’s what I was wondering, so I went into the numbers to see.
Looking at total vehicle sales numbers for the first half of the year, Tesla’s results are down a whopping 19.4% compared to the first half of 2023 — from about 337,000 to about 272,000. (That’s also with lower average selling prices and lower profit margins due to price cuts and bigger consumer incentives.) They are down 10.8% compared to the first half of last year. The fact is that short-term sales drops have turned into medium-term sales drops — Tesla sales have been dropping quite consistently for the past two and a half years if you look at year-over-year trends.
Overall, I don’t think it’s extreme or unfair to note that a nearly 20% drop in sales is a big deal and a truly concerning problem for the company. And if the trend continues, sales could be down another 10% in 2026…. True robotaxi capability and Cybercabs are supposed to turn that around. However, as anyone following the company for the past decade knows, this has been a “boy cries wolf” story (or “boy cries Full Self Driving” story) during most of that time, with expectations and adamant predictions coming and going like the seasons. Could this be the year that the market explodes from robotaxi capability? Who knows? If that almost magical solution doesn’t save the day, though, can we really expect Tesla’s sales trends will rebound? Or will they at least stabilize? Or will they drop yet again?…
And here’s where we get to a critical question: how much more of a sales loss can Tesla sustain financially before it’s losing money quarter after quarter?
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